Peter Brimelow Says Gold Bugs Confident Despite Spills

In his latest Marketwatch column, Peter Brimelow reports that gold bulls haven't lost their confidence despite the metal's spill two days ago.

[G]old drew in support from more observers than just its hard-core friends. For example, on the initial slide on Monday, The Gartman Letter added to its gold position (hedged into sterling in this case) and on Wednesday it was talking about buying more.

Many of gold’s hard core denigrate Dennis Gartman, who has a history of abrasive remarks about them — but others concede he has a reasonable record as a buyer of the metal....

Edel Tully, the UBS gold analyst, raised her one-month prediction for gold from $1,500 to $1,550, and on Wednesday supplied this valuable comment:

“It is worth noting that the lower prices have encouraged physical buying, particularly from China. That physical buyers emerge at lower gold-price levels is another factor making us confident that dips will be supported.”

This point of view is strongly endorsed over at the Le Metropole Café website, which pays close attention to the Eastern markets. On Wednesday, under the headline “Goldman jawbones: Asia buys,” the site offered news of higher premiums in local gold prices over the world market in India and Vietnam, as well as in China, to support the contention that key physical consumers had indeed activated on the pullback.

Of course, the hardcore goldbugs blamed Goldman Sachs for the spill.