Buy some gold before the final velocity phase begins! As the rupee falls against the USD, Rupee value of Gold will rise. Gold is going to continue benefiting as foreigners look beyond loading up with more dollars. China, India, and Russia are interested in significantly increasing their gold reserves. India recently bought several hundred tons from the IMF, and Russia and China are talking about increasing their gold holdings by more than 1,000 tons each. Foreign demand of this magnitude will act as a floor on gold. These big kids will be willing buyers during future weakness, and it is always wise to side with the big kids. Remember, gold is real money; and while some foreign currencies may temporarily gravitate into U.S. dollars, more currency investors will seek out gold from here on out. We just narrowly escaped a terrorist attack in Times Square, and the Homeland Security guys are telling us there is a real threat of another attack on the U.S. in the next three to six months. Heaven forbid; but if there is another "black swan" event, gold will suddenly break higher, leaving underinvested folks chasing a tornado. I look for $50 to $100 dollar up days during the coming velocity stage.
Now that gold is beginning to soften after testing last year's high, we are focusing on the next buying opportunity. Only by buying weakness and selling strength can you hope to manage risk and enhance profits. It is important this late in the commodity bull that you stop paying too much for your precious metals investments. Finding the right place to buy is every bit as important as finding the right place to sell. I have been a gold bull since the Long Term Gold Indicator told us to begin shifting from financial assets into tangibles, and we have been recommending gold since it was $250/oz. It is difficult to find yield these days. There are few opportunities for you to find generous yields in the gold market, but gold is where you will enjoy the biggest capital gains over the next two years. However, the crude oil and energy sectors offer ample avenues to generating handsome dividends. Do not trust this stock market rally to continue much longer! Late in 2008 while the stock market was getting drubbed, my work indicated that a surprising rally was going to begin in the spring of 2009. That rally launched in March 2009, and it has been relentless up to now. Timing models like Palio confirmed the move by locking on with buy signals and sticking with the trend all this time. The same indicators that warned us in 2008 to expect a strong rally are beginning to reflect readings just the opposite of those late 2008 bullish omens. Our work is looking as bearish now as it was bullish before the current rally began. Furthermore, my cyclical work looks very negative from spring into the fall of this year. Since the market's high in 2000, gold (the commensurate tangible asset) has appreciated from $250/oz. to over $1,200/oz., or 380%. The Dow Industrial Average (the quintessential financial asset) is still down 24% from its high, and the Nasdaq is down a whopping 50% since topping out in 2000 – even after the remarkable rally we have seen over the last year. The Long Term Gold Indicator knows where your money should be. We are no longer at the beginning of the bull market in commodities, but we are not at the end either. The commodity bull will carry gold (and other raw materials, including crude oil) much higher. The gold bull will continue until the indicator hits the sell line on the chart above. Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Nothing in this article is, or should be construed as, investment advice. |
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