Especially now!
You Can't Keep a Good Metal Down
You have to be impressed with this gold bull market.
Even when the U.S. dollar is enjoying a rare rally versus most foreign currencies, gold prices typically post a gain. That's despite gold's historically negative correlation to the greenback. Even in 2005 when the dollar posted a 12% rise versus the euro, gold prices still rose. It's the same story in last week's trading as the euro declined sharply versus the dollar, yet gold prices raised more than US$7 an ounce.
What this tells me is that gold is looking amazingly resilient again this year. I think we'll finish 2007 with spot gold around US$750 an ounce.
However, with the dollar heavily oversold near-term following a bad first quarter, I'm expecting gold prices to soften slightly. But prices should easily hold above US$600 this time around, if prices even reach that low. Last year at this time, central banks were busy "talking down" gold as it blasted through key resistance of US$700 an ounce in early May.
The yellow metal sailed all the way to a 26-year high of US$734 an ounce before central banks warned of rising interest rates to combat inflation, sending gold prices tumbling.
But in a bull market, even the mighty central banks of the world can't keep a good metal down forever. Investors know supply and demand are working in gold's favor, currencies are losing their purchasing power amid bulging deficits and the majority of banks continue to expand credit, debasing their currencies in the process. And, of course, inflation is indeed rising.
Once again I'm giving the same advice I've been giving you consistently since 2001 regarding gold: Use any intermittent weakness or corrections as an opportunity to accumulate gold and your favorite gold stocks.
You Can't Keep a Good Metal Down
You have to be impressed with this gold bull market.
Even when the U.S. dollar is enjoying a rare rally versus most foreign currencies, gold prices typically post a gain. That's despite gold's historically negative correlation to the greenback. Even in 2005 when the dollar posted a 12% rise versus the euro, gold prices still rose. It's the same story in last week's trading as the euro declined sharply versus the dollar, yet gold prices raised more than US$7 an ounce.
What this tells me is that gold is looking amazingly resilient again this year. I think we'll finish 2007 with spot gold around US$750 an ounce.
However, with the dollar heavily oversold near-term following a bad first quarter, I'm expecting gold prices to soften slightly. But prices should easily hold above US$600 this time around, if prices even reach that low. Last year at this time, central banks were busy "talking down" gold as it blasted through key resistance of US$700 an ounce in early May.
The yellow metal sailed all the way to a 26-year high of US$734 an ounce before central banks warned of rising interest rates to combat inflation, sending gold prices tumbling.
But in a bull market, even the mighty central banks of the world can't keep a good metal down forever. Investors know supply and demand are working in gold's favor, currencies are losing their purchasing power amid bulging deficits and the majority of banks continue to expand credit, debasing their currencies in the process. And, of course, inflation is indeed rising.
Once again I'm giving the same advice I've been giving you consistently since 2001 regarding gold: Use any intermittent weakness or corrections as an opportunity to accumulate gold and your favorite gold stocks.
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