Gold Recovers to Reach All Time High

January 28, 2008 | By | Reply More

At the end of a week that saw even die-hard gold bulls like ourselves begin to doubt our resolve the yellow metal, followed by platinum and its acolytes, reached an all time high.

Unfortunately we were unable to follow our own advice last week to fill our boots when gold sank to circa $850 an ounce earlier in that panic stricken week and that goes to show that we should have placed an order to buy at our trigger price.

The oversight was down to sheer negligence here at Precious Metal Investments and despite our flagging confidence our logic continued to dictate that the gold bull run has a lot further to go.

 

We have now put in an order to buy at a trigger price that we are reluctant to reveal as we do not want to be seen as a tipping service or be accused of bias. There is a clue that chartists may spot so, as we have said so often, do your own research and fact checking.

Yet another nail was put into the coffin of South Africa’s mining industry this last week with a power failure forcing the stoppage of production.

This, and who knows how often it may repeat, on top of the safety issues, labour problems and the shaky political future does not send out optimistic signals. To top it all South Africa has lost it place as top gold producer to China.

This is of course good news to gold investors as it adds yet another reason to be long the yellow metal.

To add to our confidence the Fed wreaked more damage to the dollar with its emergency (should that read ill thought out panic) strategy of dropping interest rates with an expectation of more to come at their next meeting.

So far it has not looked like having the desired effect of propping up the stock market and that brings us to the only cloud on gold’s horizon.

With so many over leveraged hedge and investment funds and investors of every ilk whose optimism continued to carry them into ever more precarious positions just a few short weeks ago the pressure is on them to balance their books and reduce their debt exposure.

Human nature being what it is, their profitable positions will be the first to be closed out. After all pride and conceit will make their losers last to go despite the sage advice of investment gurus through the ages to let the winners run and dump the dross.

On top of that, as we have mentioned in previous round ups, short termism still rules, so many fund managers will want to show their followers that all is well in order that they can draw their salaries for a few more weeks before they get the inevitable boot.

Having got that little rant off my chest there are some excellent funds expertly managed that will look after your hard earned money and produce a worthwhile return whatever the market does. Finding them is the hard part.

Back to the point, our readers will no doubt have already seen what we are getting at and that is, simply, will gold’s price come under significant pressure as over leveraged positions are unwound?

Our opinion, for what it is worth, is that the usual fluctuations will occur as the price drives upwards, buy the dips and -maybe – sell the peaks, and don’t we regret missing out on that major dip during last week!

As ever, do the research, check the so-called facts and take investment opinions on this and other web sites with a pinch of salt. 

 

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