Buy Gold Today?

March 25, 2008 | By | 3 Replies More

This week we intend to be very careful not to give any buy or sell bias on the short-term outlook for gold and other precious metals.

The fact is that more and more uncertainty is gathering throughout the world and until a semblance of normality returns the price action in our favorite metals and their producers is anybodies guess.

Take the US dollar for example, the Fed intends to bail out lenders in trouble, or at least the politically important ones, and the only way it can do that is to print more money.

Also there is the prospect of another lowering of interest rates in an attempt to revive a flagging economy. What does the dollar do but fly in the face of common sense and firm up against the Euro, Pound, Yen etc. while gold drops!

Then there is oil, only a few short weeks ago it was revolving around the ninety dollar a barrel mark with, horror of horrors, a hundred dollars a barrel in its sights.

Now one hundred dollars is probably the benchmark for at least a short while before it resumes its upward trend, but that remains to be seen.

It seems to be generally acknowledged that there is more bad news to come from the US and European banking sector as the sub prime fiasco develops.

Deleveraging is said to be taking place but it is almost impossible to make even an educated guess just by how much and when it is likely to hit the markets and how long it will last.

Not to be outdone there seems to be a swelling among the ranks of the bottom feeders and there is little doubt that this is having an immediate effect on US and European stock markets with Eastern markets tagging along.

We have been told that US home sales have surprisingly surged but can we believe that the figures haven’t been massaged in the same way that we know the inflation numbers are more than suspect.  

These are just a few of the unresolved and contradictory problems that face the average stock market player looking to apply common sense to his investment decisions.

To turn again to gold, profits have been taken pushing the price down by circa $100 an ounce in just a few days so is it time to buy the dip?

We are buying but keeping some of our pot back just in case there is more of a fall to come, possibly to $850 an oz. Our present watch is for taking short term profits as we are betting on a see saw return to $1000 an oz before the summers over.

Our long term outlook for gold and PGMs is still very bullish but at this moment in time the markets will have their own way despite the worst efforts of politicians and bankers everywhere.

Once upon a time we tried backing horses that we had researched in great depth and still lost money but we still find it difficult to resist having a little gamble on the yellow metal just now although we should have learned from our previous gambling experiences.

Hope you all had a good Easter but perhaps you should keep your powder dry and wait until the economic world has disclosed a few more of its nasty little secrets before risking too much hard earned cash. 

 

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Category: Review

Comments (3)

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  1. Zachary says:

    I wish I had bought gold a few years ago when it was under $300 per ounce. I wouldn’t touch the stuff at its present levels. I have always had a fascination with precious metals investing, but the short term is too unpredictable and the long-term I figure is better served by investing in broad market index funds. I do love the physicality of precious metals, though. It is nice to own something tangible!
    -Zachary

  2. The prediction for gold is for sure upward in value, with rising inflation and the devaluing dollar, gold always has an exact opposite effect and will rise in value as it has always done. Even though gold is at an all time high now, it will rise even further in the next couple of years..

  3. John says:

    Hi

    Nice to know that others agree with us and lets hope we’re in the money.

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