Here is our G.P.S. on the golden bull. This is not a normal market where you have a surge forward in price followed by a 50% pull back.

In a normal market, dollar-cost averaging (investing the same dollar amount every month, for example) is usually a good technique. You buy less when the price soars and more on dips, but averaging only works when you expect volatility on the upside and weakness to the downside.

But let me say it again, this is not a normal market. When you have a market that is trending up, averaging only guarantees you a higher average price.

What about waiting to buy on that elusive “dip”? That could mean seeing gold march steadily higher to $1,500/oz., then “correcting” to $1,400. It could even mean gold approaching $2,000/oz., then dipping to $1,800. In other words, any dips could occur at much higher levels than we’re seeing today.

Let me give you some other reasons why we believe gold could rise a lot further before we see any significant correction.

1. In constant 1980 dollars, gold should be $2,300/oz. today.
2. Gold is appreciating against all currencies.
3. The U.S. needs foreign capital - lots of it - to fund their debt.
4. We have had a record increase in the money supply.
5. A record $2-3 trillion in bailout money.

The bottom line is that our G.P.S. for gold is saying to buy now. Yes, that’s essentially the same thing we’ve been saying for years as gold has marched from under $250 to over $1,000. We were right then and we expect to be proven right again.

Courtesy: www.gliq.com

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook