Why You Should View Gold as 'Garbage'

December Gold has trapped bulls with fake rallies two days in a row. It dove even more steeply on Friday, the second day, falling from a 1213.80 peak recorded in the dead of night to an end-of-session low at 1197.80. This kind of price action is bound to discourage bulls, and it could only occur if too many of them are too eager to jump on the futures every time they show a spark of life. Price action has been worse than discouraging, actually, it has been viciously punitive. That's why I will continue to remind you that, in the minds of most investors, gold is garbage. That description may sound harsh, but its purpose is to keep you from thinking that mere hopefulness will suffice to turn gold around. Although there are a dozen good reasons why gold could be considered undervalued at current levels, that doesn’t mean quotes couldn't continue to fall to levels that seem absurd. I doubt nonetheless that they are headed below $1000, but that still leaves $200 of downside to torture the faithful.  We can continue to trade impulsive rallies in the meantime, but only by way of the lesser charts, so that entry risk is very tightly controlled. If you don't subscribe to Rick's Picks, just click here for a free two-week trial. It will give you instant access not only to the chat room, but to actionable 'touts', intraday alerts and impromptu ‘requests’ sessions online.