INVESTOR ALERT: GOLD IS GOING TO TANK ON WED JAN 16th

The headline says it all.

Two things happened on Tuesday. We found out that more U.S. banks are going to be bailed out with an infusion of overseas cash -- and gold went down after a record skyrocket.

RIYADH/KUWAIT (Reuters) - Saudi Prince Alwaleed bin Talal and Kuwait agreed to invest at least $5 billion in Citigroup Inc and Merrill Lynch & Co as the two U.S. banks scramble for capital after billions in writedowns.

So, how do you think these investors/oil producers pay for the cash infusion into these banks?

Well, before they hit the "send" button on their paypal to Citibank, they have to sell tons of gold to pay for the investment.

If you look at the 24 hour gold chart, you can see when the withdraw from the ATM was made. (The sell of gold to pay for the U.S. bank investment/bail-out.) Monday at 12 noon; and in the 11pm hour, just before midnight.

And a lot of people are hoping this will put enough confidence back into stocks, that the market may rally back a little, instead of sinking further.

IT WILL SINK FURTHER ON WEDNESDAY...AND GOLD WILL CONTINUE TO DROP.

But don't worry...well, go ahead and worry...but keep in mind, as you DO worry...that gold will go back up, cause inflation is out of control, oil will be going back up, the dollar will be dropping and Berntankie will still have to cut the rate, which will drive up gold further.

So the point is...although if you are holding gold (or silver) as a long term investment, you are going to be happy in February and beyond. But if you want to jump on the gold/silver bandwagon...Wed Jan 16th is not the day. In other words, it will be lower by the end of the day.

24 hour gold and silver charts at strategyupdate.com.

Disclosure: AUY, KGC