NOTHING HAS CHANGED...

Why did gold prices fall over 7% in one day?

I haven't read it anywhere yet, but my guess is some very large precious metal producers have resumed hedging their future production. And why not! Prices look better than two or three years ago when they stopped hedging.

The floor traders seeing this, most likely started pushing the short side which in turn kicks in the large momentum sell programs. Oil getting stepped on did not help matters.

This either sets up a great buying opportunity, or a state of massive confusion for brokers and clients. It could be considerable time before the metals make new highs. Thus gold investors must have a firm grasp of the market fundamentals.

I believe nothing has changed that really mattered before; Bad dollar management and policies, bad economics (pro-inflation), War costs, welfare, disaster relief and of course, the debt-hungry U.S. consumer/non-producer.

Oil will most likely remain higher than it was on 9/11 and will tend to move higher given any real opportunity -- that is until Jews, Muslims and Christians finally unite under a single, peace-loving religion (never going to happen)!

Embracing Volatility

No matter WHAT triggered this opportunity, clients and brokers should treat it as a long-term BUYING opportunity -- until something long-term and meaningful enough to fundamentally change world economics and politics occurs.

The future of almost all investments may be riddled with wild price-swings, over a long or relatively short periods of time. No one will know until they're looking back in hindsight.

Sadly, for most investors then it will be too late. Most will stand on the sidelines in cash, or an existing investment and do nothing -- frighten by the very price swings which are in reality their second chance and big opportunity to get on board the bull market!

It appears the end game is a race by all producing-consuming countries of the world to devalue their currency enough to get an import-export edge over each other. The people who ultimately pay the price are those that don't position themselves correctly, somewhere out of cash.

As George Soros told CNBC this week ... "Cash (not in dollars) is King." In other words, "cash" no longer means U.S. dollars, it now means liquid assets which hold value over time (like some foreign currencies). But wait. It sounds to me like he's referring to gold. Yes. I can see it: Gold is the new King of currencies! Long live the King!