Two sources that are well informed on the metals, and of course a comment from Fartman:

Of course last week was a pretty bloodcurdling week to own anything. The Gartman Letter’s explanation of why it was not evicted from its gold position, as it frequently is in waterfall declines, has a lot of resonance: “We hold what we hold out of fear of the future, not out of love for gold.”

Nevertheless, two types of gold bugs remain remarkably cheerful.

The truly hard-core financial system skeptics actually found last week delicious. They are exemplified by Australia’s The Privateer, which (despite its grim chart) happily noted:

“The Global Financial Crisis has come back, but this time, it is not the risk of banks going under — it is the risk of “sovereign nations” going under. Which sovereign nations? European ones, or more precisely peripheral European ones along the shore of the Mediterranean Sea.

“It was the same old herd reaction. Get out of trades — ANY trades — that were going to strangle the holder of same, most of them financed with U.S. dollars. Grab the proceeds and convert them back to U.S. dollars. Stuff the dollars under the mattress or into Treasuries.”

From The Privateer’s standpoint, gold will inevitably benefit after the short-term panic reaction is succeeded by the long-term despair reaction.

Are you really sure the financial system skeptics are wrong?

The other cheerful group, with arguably a more useful short-term orientation, is the radical gold bugs who muster at Bill Murphy’s Le Metropole Cafe. They argue that the gold price has long been manipulated. Its nose-diving in the face of intensified financial system threat is exactly what they would expect, so they are not alarmed. As Murphy himself said of Friday’s early action:

“Gold managed a modest rally to $1067 when The Gold Cartel’s traders reported for work at 3 a.m. New York time and straight down she went.”

What really cheers up the Metropole Cafe crowd are the reports they are starting to see signs of strong buying of physical gold by the public in India and the Far East. They last reported this in late January and were rewarded with a $40 rally. Now apparently it is being seen again.