gold index up 8.6% last week
...So I would expect the precious metals to bottom well before everything else does. In fact, we could be looking at a situation where the metals and their shares rebound sharply while the U.S. equity markets continue to decline. This could last many months. I want to point out that the GDX bottomed in October 2008 and was up 100% before the S&P 500 bottomed in March 2009. So over a five month period the GDX doubled while the SPX declined 25% ...
Correct me if I am off base on this one.
Most times when the "sh!t hits the fan" everything falls.
Commodities, oil, financials etc,......AND gold/silver.
US dollar and Treasuries rise a lot. Flight to safety.
This time something was different.
I can't remember when a market shiver didn't cause gold/silver to also fall?
This is an anomoly for me.
Who is now buying gold?? Other than me??
Just last August.. the markets crashed and gold hit an all time high. If gold rises more than silver percentage wise, like on Friday and last August.. then it is a fear/safety trade. If silver rises more than gold then it is an inflation/easing trade.
I was just rereading Warren Buffett's comment on gold and how an ounce would buy acres of productive farmland, etc. His ultimate argument being that farmland has practical value but gold does not. However, one problem with that argument is that the same one can can be made about a stack of thousand dollar bills. Ultimately it is just a stack of paper. It seems to boil down to whether one regards gold more as a currency or an industrial product.
However, I suppose in Buffett's defense he might agree with that assessment and counter that is why he prefers to hold equity in good companies over the dollar bills as well. (Mind you he must always have some cash available.)
I'm in the same boat and am fully allocated to metals. I have been piling into mining shares and bullion like a madman since last fall (check some of my other posts), and it's starting to finally make the turn...
Originally Posted by Miser
Was lucky enough to buy Silver Wheaton around $24 a few weeks back.
I'm up to 35% of my portfolio in metals plays, the rest is in cash and own zero stocks otherwise. All chips are on the table, betting against the Bernank
There were rumblings of QE-III this past week, which pushed up both gold and silver.
Originally Posted by Miser
Given how strong the USD has become since last summer, I think the time is ripe for QE-III.
I wouldn't be surprise if the Obama administration pushes for QE-III to get some positive reaction from the economy before the elections.
If QE3 is announced it could be soon:
This Thursday at 10am Bernanke testifies before the Joint Economic Committee on the economic outlook in Washington.
Then on the 20th they have the FOMC meeting and press conference.
The protracted correction in gold and precious metals stocks that began
in September 2011 appears to have ended. Our conclusion is based on historically
reliable gauges of sentiment, valuation and technical factors. (We will publish the
specific readings on these gauges with our second quarter investment letter on June 30.)
This basing, in our view, should establish a solid platform to launch both the metals
and the related mining shares to new highs within the next year. The investment
sentiment for gold and especially mining shares is demoralized and confused.
This setting, in our opinion, equates to an outstanding, low risk entry point to
both the metals and the shares in anticipation of future monetary debasement.
zylon......your article and what is most important, IMHO
The acquisition and possession of gold is not a speculation on higher prices. It has become a core component for the preservation of wealth in a cosmos of complexity and chaos.