It was such a bad day that Gold officially lost safe-haven status, according the pundits at CNBC. This was also noted by Elliot Wave and The Business Insider, as they all shouted out, “Gold is No safe haven!”

Can we blame them?

In today’s day trading atmosphere, and with most professional’s eyes glued to a computer screen all day, most folks worry only what will happen next hour, they have little interest next next week or next month.

Now, everyone is a trader, not an investor, and in such a scenario the trends of the past quarter or year of very little interest, not even to the producers of CNBC, the theorists at Elliot Wave, and the guys and gals at the Business Insider. Hummm.

The fact is that Gold has been an excellent hedge for 10 yrs, and it was in the 1970s (I remember), it rose in value during both of the Bear markets in stocks. To those with a time horizon beyond a few nanoseconds, this chart is valid in the extreme.

And what do we all hear from the Financial Media Entertainment Bear sector?

This is what we hear from the Bears, take note listerners, ”Gold is a crowded trade, and that folks isbecause there are a few commercials on TV to buy scrap gold, and hence the public is now involved. Get a grip, all such anecdotal evidence is refuted by facts.

Firstly; just 0.7% of all global assets are in Gold and Gold related equities, and exchange traded funds .

So, just what does a Gold bubble look like, a real one?

Well in it was 15% in Y 1934 and 29% in Y 1980, and while more and more civilians are buying Gold, that is what happens in a secular Bull market, participation does rise over time, but Gold is still extremely Under Owned, got it Gold is Under Owned. While corporate, and government bonds are Over Owned.

The published stats are that the majority of the few that own the precious metals complex in their portfolio have a weighting below 10%. While a much money poured into Gold in Yrs 2008 and 2009, more money poured into Bond funds. Now that is the crowded trade from my POV. 

Next, you should know that the public’s view on Gold did not exceed 75% Bulls in Y 2009, as it did in Yrs 2006 and 2008 as Gold broke US$1000 oz, the public’s Bullish appetite increased but slightly.

We are all aware that Gold bears are deflationists. They argue that since all asset classes have trended together and trended against the US$, all fall in a deflationary period.

This is the correct POV when you look at very short periods of time like July to October 2008.

But when we look at the bigger picture Gold performs very well on a relative basis in a deflationary period. It outperforms as other asset classes tumble and most importantly, it is always the first asset to recover.

Many folks forget that the entire precious metals sector performed very well from November 2008 to February 2009, while stocks continued to fall and commodities looked for a bottom.

Further, the US$ does not have to decline for Gold to rise.

Did you know that since the end of Y 2004, the US$ is flat but Gold is up 143%? Of course you did right?

Since July 20, 2007, Gold is up 56% and the US$ is flat. Since early in September 2008, Gold is up 35%, while the dollar is up 1%.

Hence, most deflationists have been Wrong on Gold, and will continue to be Wrong IMO. We should all give kuddos those guys (I read them) who have been right on deflation and Gold,.i.e, Bob Hoye and Mike Shedlock.

Let’s look at the technical side (that’s my area). Here we see traders being taken for real Technicians, and these posers are mostly Bearish on Gold near term.

Example: Joe Terranova on CNBC’s Fast Money said recently (I just happened to see him say it the other day) that the long-term up-trend was broken and that people needed to reduce positions. 

Ok, let’s  be fair, long-term for Fast Money is only a few days.

As I will show you, the reality is that Gold has a Super Bullish overall technical outlook, as it is in the early stages of a parabolic rise.

Back in the 1970′s, Gold began to go parabolic in the middle of 1979, almost 10 yrs into the Bull market. The important breakout occurred in 1978, and then corrected 20% back just below the breakout point.

Now, the important breakout occurred at the end of 2007 and then in 2008 we saw the snapback to the line (support), though the snapback was 34%, that’s a large number. 

Note: in the last Bull market the process of breakout, snapback and parabolic move took a year to develop, and this time it is taking about 2 years. To me that means this parabolic move will last longer.

When you take a good look at the Gold chart and you notice that the parabolic move has begun. The recognition phase likely will take some time to develop as I view it, and while Gold could move to US$1300 oz this Spring, I do not expect to see sustained new highs until later this year.

From the fundamentals support POV support it is my view that the financial crisis is entering the most Bullish phase for Gold.

The sovereign debt crisis, which began in Iceland (remember little Iceland) will plague the EuroZone this year and then spread to the UK and the US in early 2011.

Nations have no other choice but to Monetize their growing obligations while trying to stimulate their economies with deficit spending, and near 0% interest rates.

Friends, this a is a Perfect Storm for Gold as the “Stars” are lining up now for such a Storm to begin in late 2010 and early 2011.

So, having said all of that, I believe, and my work shows me that the Big, and perhaps even Huge winners will be Silver, along with the emerging Gold and Silver Junior producers and explorers.

For those looking to take advantage of these historic times, learn about Gold, and the precious metals sector, as Knowledge is Power, and also please consider following Red’s Weekly Gold Reports here on EH Live Trading News. Stay tuned…Paul A. Ebeling, Jnr. www.livetradingnews.com