market folly

In light of the fact that hedge fund manager John Paulson recently bought tons of gold and gold miners, we thought it would yet again be prudent to examine what the technicals are saying about the metal this time around. Is it time to pick some up? Check out the video here.

Although Paulson & Co have said they bought the gold as a hedge, we've noticed a confluence of smart minds flocking to large gold positions over the past few quarters. At one point or another, David Einhorn of Greenlight Capital, Eric Mindich of Eton Park Capital, and Dan Loeb of Third Point have all been in gold (among many other funds we're sure). On one hand, Loeb was using it as a 'hideout' and safety net from market irrationality and volatility, and has since sold out, as noted in his investor letter. Einhorn, on the other hand, holds gold due to future inflationary fears.

The guys over at MarketClub have pulled up the charts in their latest free video and are seeing some possible consolidation signs in the metal. Check out some technical analysis on Gold here.