Scott, I am thinking you are on the right track here, gold is still high and all indications point to it continuing a slow climb, at least for a little while longer. Though I am skeptical as to how high it will actually get in the short term
Do you have a figure in mind that it will hit before it starts to move back to a bear market?
Scott, what would you consider the single biggest factor that could fuel gold prices? Inflation?
The Fed noted this week that it believes high oil prices are going to fuel inflation. And while it said it expects the inflation to be temporary, it looks like a lot of factors, including tensions in the Middle East, could keep gas prices (and inflation) elevated for some time to come, right?
Of course, money supply begets inflation. But the Fed knows that other forces (such as debt reduction) are strongly deflationary, so it keeps doing it.
There are other factors but that is the main one given that the correlation between gold and money supply is 80%
Ha, it's just funny I have been telling people about this relationship for years and it still seems poorly understood by the public. It's the most basic, obvious trend in the financial markets.
All the central banks are printing lots and lots of money.
As Scott mentions, there are several ways to buy gold. Mining companies don't seem to track with gold, even over long times. May have their own merits, but I'm not convinced that it's just a matter of time before they "catch up" to gold.
What are the advantages/disadvantages of buying shares of GLD?
Disadvantages: It is a paper asset backed by physical metal. But there are intermediaries. Will they really be able to back all the metal they say they cover?
Personally for the average person you should either buy a gold mutual fund or just go down to main street and buy some gold coins. I talk to coin dealers all they time and they are still perplexed why there is not more enthusiasm.
given what you have pointed out here, i could see it, but I am always so gun shy gold.
To be honest, your gold reporting has been pretty much right on target, but for some reason I keep thinking gold is going to reverse course any time, though I have not been right yet, but you have LOL.
I have been doing this a long time. I have made mistakes. But one thing I have learned is if there is a great trend, get on board, do the analysis and if it supports the trend stick with it, they tend to carry on a lot longer than people think.
Apple is another great example of that.
If you are gunshy about gold the way to get in is to wait buy it after a vicious selloff (like we just had), and then set a conservative stop-loss so that your loss is capped.
My stop-loss is at $1,590 and I see upside to to $2,500 or higher. That's about a 1-to-10 risk/reward. I like that trade.
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