"Allen, here's the situation."
After some joking, Phil Smith turned serious: "My broker told me that 200 USD per ounce is a resistance level for gold. Last time, prices peaked around 192 USD before correcting. This time will likely be no different. The closer gold gets to 200, the greater the chance of a pullback."
"This is also Goldman Sachs' view," Wade Thomas added. "Gold has risen from 102 USD per ounce in autumn 1976 to 195 USD today — a 93‑dollar increase, over 90% in just over a year. With such a huge rally, when gold hits resistance, profit‑takers will exit, shorts will press the price down, and even some longs may flip to shorts. Breaking through 200 USD will be very difficult."
This was Goldman's stance. Having already taken short positions, Goldman had no problem letting their view be known. The more longs exited — or even turned short — the easier it would be for Goldman to push prices down and profit.
"I just want to hear your judgment, Allen," Phil Smith said. "You've invested so much capital, you must have your own view. I hope you'll share it." He wanted Lin BaoCheng's perspective before deciding what to do — after all, this was tens of millions of dollars at stake.
"I'm not a professional. My judgment is that gold will rise in the long term. Over one or two years, or longer, it will break 200, even 300 USD per ounce. But short‑term trends? I can't predict them. If you hadn't mentioned it, I wouldn't even be paying attention to short‑term moves."
Lin BaoCheng shook his head. He admitted he should thank them — otherwise he wouldn't have considered short‑term fluctuations. Last time there had already been a spike and pullback. Ignoring it again would be careless.
Phil Smith was surprised: "Allen, you mean you just hold long‑term? Buy and never move, no matter the short‑term?"
Lin BaoCheng nodded, glancing at Wade Thomas: "Mr. Thomas knows best. Since I bought gold futures, I haven't made a single trade. Even during the last correction, I didn't move."
"Allen really has done that," Wade Thomas confirmed. "Investors like him are extremely rare. In stocks, maybe. But in futures, almost no one does this."
Lin BaoCheng said: "It's a pity. Last time, I didn't sell during the correction. Now, since another adjustment may be coming, I need to think carefully."
Phil Smith looked at him: "Allen, when you decide, will you let me know?"
"No problem!" Lin BaoCheng smiled. "But let me say this upfront: if my judgment is wrong and you follow it, don't blame me for any losses."
Phil Smith nodded firmly: "Don't worry. Your view is just a reference, like Goldman's. Profit or loss is my responsibility, not anyone else's."
"That's best. I don't want this to affect our friendship," Lin BaoCheng said, raising his glass.
"Me neither!" Phil Smith replied, clinking glasses. Cooperation with Lin BaoCheng was profitable, and he didn't want to jeopardize it.
Afterward, they chatted about other matters. Phil Smith went off to meet other partners, making sure not to neglect anyone.
By the time Lin BaoCheng and Isabella left, it was past nine in the evening.
In the car, Lin BaoCheng said to Isabella: "Your friend works at Merrill Lynch, right? Ask her if they also see 200 USD as resistance and expect a correction. Also collect reports from Morgan, Citibank, and others if possible. Gold is around 195 USD now. If a correction is coming, it should be soon. This needs to be done immediately."
"Yes, Boss. I'll contact her as soon as I get home. She'll know other institutions' views too," Isabella replied.
"Good. I'll wait for your news," Lin BaoCheng said, then fell silent.
After dropping Isabella off, he returned to his Beverly Hills villa.
There, he contacted Cheng YuFeng in Hong Kong, instructing him to consult Yuan TianFan at HSBC for his view on gold's recent trend, and also gather opinions from HSBC and Standard Chartered. He wanted a full report.
It was about 10 p.m. in Los Angeles, already 1 p.m. the next day in Hong Kong — a 15‑hour difference.
Lin BaoCheng planned to review all institutional views, using the opportunity to test Yuan TianFan's ability.
Soon Isabella called back. Her friend believed gold would correct, with 200 USD as resistance.
As for Morgan, Citibank, and others, some predicted a breakthrough, others a correction. But according to her friend, more leaned toward correction. She added that some reports might be "smoke screens" — saying bearish while actually bullish, or vice versa. So they could only be references.
Her friend also said: even if institutions were bearish now, once prices rose, they could flip bullish at any time. Ultimately, one needed independent judgment. Others' views were only references.
Lin BaoCheng told Isabella to thank her friend, promising to invite her to dinner next time.
After hanging up, he waited for Cheng YuFeng's reply from Hong Kong, while pondering whether to act — and if so, how best to do it.