Nov 25

Video That Looks at Where We Are in the Gold Cycle

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This is an interesting video that looks at where we are in the current Gold cycle. It compares the gold price to the amount of dollars in circulation. It raises some valid points.

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Nov 25

Gold to $15,000 an ounce? Who knows?

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This video may project an over enthusiastic view of how high gold could go. However it’s worth a look. Enjoy.

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Nov 16

Gold Still Rallying

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Gold reached over $1,139 today as the rally continued. Some analysts believe that central banks are causing the current rally. No doubt, they are a contributing factor. However, interest rates have been extremely low for a sustained period of time. As a result, investors are running to gold as a hedge against the inflation that will occur if current interest rates are maintained. We could see a perfect storm for Gold.

As I have mentioned before. If central banks globally raise interest rates the Gold rally may be halted. However, there are broader economic implications to be considered. Right now Gold seems to be a good place to be in order to protect purchasing power.

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Nov 12

Gold Fell as Dollar Gained

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Gold pulled back from it’s record high today. The Dollar bounced up after some sustained losses recently. Again, I never look at gold from a day trading perspective. It is my opinion that individual investors shouldn’t try to make a quick buck from day trading gold. However, I advocate a balanced approach to buying gold. When you have money that you would like to save, then it’s a good idea to put a portion of it in gold.

As the recent rally has shown. Gold is a great hedge against the Dollar. If you have all your savings in one asset class then you are exposed. Prudence is the best approach for the long term financial future of individual investors. Buy gold when you can afford it at different intervals. The concept is that you are protecting the purchasing power of your savings by buying gold.

Nov 11

Gold Still Strong

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Gold reached a new high on Wednesday 11th November 2009. It’s still holding well. It looks like this rally is down to money supply considerations. If the major central banks decide to raise interest rates then this rally could end. Do you think that this is likely anytime soon? Your call.

Of course, there are many other factors to be considered. Will there be profit taking? This could end the rally. If so, when will we see it? It’s important to keep in mind that US stocks have also done well recently.

Let’s not get over hyped by the current rally. Sometimes it good to take a deep breath and look at the big picture.

Nov 11

Hedge Funds and Gold

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Max  Keiser has spotted a trend in the hedge fund industry towards hedge funds marketing themselves as having  10% – 20%  of their assets in gold. It’s quite interesting when you think about it. No currencies are backed by gold yet a significant portion of hedge funds could be. Check out what Max said in greater detail below:

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Nov 09

Peter Schiff Lays It Out On FOX Business

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It’s worth it to consider Peter Schiff’s point of view on the latest Gold rally. Here’s a recent video on FOX Business. Enjoy.

Nov 09

Gold Price Hits New High

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Gold hit a new record high of  $1,111.70 and ounce today.  Gold mining stocks also benefited from the current interest in gold.  However, it’s worth recognizing that stocks were also up today.  This points to the fact that the weak dollar is the main reason for the surge in gold and other asset classes.

There is also a believe in some quarters that China may pass on buying gold from the IMF. This is a significant consideration when looking to future Gold prices.  In an interesting article by Peter Koven this is highlighted in greater detail.
All in all, it seems that the two main questions that relate to gold’s current rally are
1) What is the Dollar going to do?
2) What are the central banks of the world going to do?

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Nov 09

Gold Price Surges Past the $1,100 mark

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The rally continues as gold broke the $1,100 mark today. The main reason for this is the Dollar weakening against other currencies. As a result, it also weakens against Gold. The low interest rates maintained by the Federal Reserve indicate that this Gold surge may continue.

Speculation is rife that more central banks are considering following in the footsteps of the Indian Central Bank and buying Gold. The combination of the Dollar’s weakness aligned with the speculation on more central banks buying gold may see this rally continue for a little while longer.

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Nov 05

Indian Central Bank and The Recent Gold Surge

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The Indian Central Bank has recently bought 200 tonnes of gold from the IMF. This has played a major role in the record gold prices lately. If other Central Banks follow suit we could see this rally continue. However, this remains a question mark. It depends on how global central banks intend to hedge against holding excessive foreign currency reserves. All in all, the private investor should do their own research and come to their own conclusions.

There is a strong argument against the private investor going “all in” with gold at such high prices. However, as a hedge against stocks and cash assets gold still looks good. Remember, before you decide to buy gold make sure that you understand why you are buying it.

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