By Jim Sinclair
Where is gold price heading? Is the bullion market overheated? Was the news that China has been amassing gold reserves the main reason for the recent rise in gold prices? Just look at these question-answers below.

Question: Do you expect Gold to take another hit to the downside before the end of the 3rd week in June, or is this it?

Answer: It is important to understand the art of reading a market opinion that combines direction and time. All market moves have what we will call windows in time. The window is open or closed to the move. The window for decline is open until the third week of June ends. That is not as mechanical as your question indicates. It could rise from here and chop up and down into the third week. It might decline into the third week but as we enter the forth week the potential for decline becomes less to nil. After the fourth of July it simply isn’t there.

No one knows in absolute terms what a market will do, except in retrospect, and of course every talking head who starts their presentation, "As I said one year ago" etc…

Question: The last time I asked you if Gold would cross the $1000 mark and you said it would make TWO attempts. I consider the FIRST attempt was made. The second week of June was weak as you wanted. Next week is the third week… and the Armstrong turn date.

Answer: At that time gold had traded over $1000 one time. A few closes above $1000 is a reasonable basis to say "yes, that was above." Very early on in JSMineset we took the position that gold would have to penetrate and close above $1000 THREE TIMES before it did not look back. I suggested you print and pin that up.

We have had two attempts, in my opinion, at $1000. The first was clear, the second somewhat subjective and the next one is coming quite soon.

I cannot say if Mr. Armstrong is looking for three from here or is in agreement that two have happened. I will speculate that Armstrong and I are in agreement but you will have to ask him. He has given all his contact info to his readers so you should have it if you have read him.

Question: Can you explain why it was good for weakness in the 2nd week of June? Was it chart-wise?

Answer: Not really. It was action to confirm the existence of a cycle grouping by influencing the market direction of least resistance. Please recall the constant warnings from the top of the rally recently in the form of the market being vulnerable to the commercials as they were not yet in position to benefit from the move. In my opinion, it is certainly standing right in front of us.

Ok, it was pushed lower by the Commercials in the past few weeks for their own purpose, but it went down easily, did it not? You can reasonably conclude at that time the cycle influence was into the market structure.

Do you understand that concept as it is not thinking of a photo in time, but thinking of it in motion?

Courtesy: JSMineset