 |
|||
|
|||
|
|
||
January 27, 2009 |
 |
Last week saw some very interesting turns in the market. Stocks displayed some renewed weakness. Treasury bonds sold off violently and gold broke out of a consolidation pattern to the upside, taking out the $880 mark which has served as a ceiling through much of its correction in the 2H of 2008.
It’s important to note that while gold (GLD) is off the highs in US Dollar terms ($1,000), it has broken out to new highs in almost every other global currency – the UK Pound and Euro included. This is indicative of a strong bull market in gold and also shows that global confidence in world currencies is sinking as central banks resort to the printing press to solve our problems. Bad move, considering the printing presses are what got us into the problems in the first place.
I believe the only reason that gold has not made new highs in 2008 in U.S. Dollar terms is because of the artificial flight-to-quality into the US Dollar, which is most likely a short-term phenomenon. I am gaining new confidence in the case for the gold bull market to enter its strongest phase: panic buying. Here’s a fact that’s not often recited by the gold skeptics: We are now in the eighth year of a strong gold bull market, which is likely to continue for, in my estimation, at least another three years. Gold has averaged a 16% annual gain in Dollar terms for the past eight years. Clearly it is the best performing asset class in the decade. You might ask if it’s getting late in the move, but the fundamentals are still supportive.
The gold bull market is reflective of how dependent our governments have become on creating and pushing debt on its people – a trend that is accelerating. Because of the breakout of the gold and strength in mining stocks, I would recommend at looking to buy some of the mining and exploration stocks including RGLD, PAAS, NEM, and AUY. You can also buy a basket of mining stocks with GDX. This sector was crushed in the October/November sell-off, but it is now bouncing back violently with mining asset prices being supported by the moves in gold and silver. This will be a careful area to watch because these stocks have established early leadership in 2009. You can read more details about mining stocks and track my investment choices at Futures Fanatic.
Another interesting trend to watch is that commodities are displaying renewed strength, especially in relation to equities. Last week commodities and hard assets outperformed equities. Could this be a sign of a trend that will be established in 2009? It is something that bears close watching. The chart below shows the potential for an interesting turn in the commodities sector.
To buy Hallmarked 999.9 Pure Swiss Gold Bars, Gold Bullion, Gold Ingots & 916 Gold Coins in Singapore or convert your 916 Physical Gold to physical 999.9 Pure Swiss Gold Bars, Click on Buy Gold Bullion Bars to find out more. You may Sell Gold Bullion Bars to us too.
[ Back To Home ]
Buy Gold Bullion Bars & Sell Gold Bullion Bars - Singapore Gold Bullion Dealer