Has Gold’s Rally Come to an End? This CEO says Monday's Correction Is ‘Healthy’

Gold prices ended the U.S. day session about where they started Monday--solidly lower. ‘We have had a spectacular run and it is healthy to have a correction,’ says famed market watcher Frank Holmes, and the CEO of U.S. Global Investors. Profit-taking pressure from recent gains, a higher U.S. dollar index and a generally improving risk sentiment in the world marketplace early this week all worked against the safe-haven metal. April Comex gold was last down $20.30 at $1,210.40 an ounce. March Comex silver was last down $0.288 at $15.085 an ounce. ‘Gold is up two standard deviations…[S]o math is in favor of a correction short term,’ Holmes says in the interview with Kitco News. ‘Historically we get a pop in gold for the Chinese New Year – if we go back just one month ago, gold was down one standard deviation. The markets will correct,’ Holmes stresses. On the topic of Goldman Sachs’ recommendation of shorting gold, Holmes, says the bank is ‘brilliant.’ ‘[T]hey always come out when gold is up two standard deviations and say ‘sell’; it is a very biased position, but they are smart when they come out and say time it’s time sell gold.’