The Chinese government is telling people gold and silver are good investments that will safeguard their wealth. After last year’s meltdown in the stock market, people believe it. After all, Chinese citizens don’t receive government retirement money… and they don’t have company pension plans like people in many other countries do.
Theo Casey, Investment Director of The Fleet Street Letter and member of The Right Side editorial team, discusses the merits of gold, the bull’s run, and how to get in on the action.
Byron King, Whiskey and Gunpowder
Let’s review the big picture for gold. What’s going on? And what are people saying?
For much of 2009, gold traded in the range of low-mid $900 per ounce. There was a dip over the summer, with a strong upswing starting in September. Gold is now trading well over $1,000 per ounce, in fact just under $1,100.
Turns out that the government of India was buying gold in mid-October.
Gold gained yet another powerful ally yesterday — hedge fund icon Paul Tudor Jones. The man who famously called Black Monday in 1987 and the Nikkei crash a few years later now thinks “gold appears to be cheap.” In a note to his investors, Tudor said, “I have never been a gold bug. It is just an asset that, like everything else in life, has its time and place. And now is that time… gold’s value should increase as its scarcity relative to printed currencies increases.”
Baltimore (TFN): Today’s the day. If you have ever hunted for undersea gold, you likely know Mel Fisher’s famous mantra. The great shipwreck hunter used the line thousands of times before it became the undeniable truth on the day he uncovered the “Atocha mother lode.”
On one hand, the deflationists are claiming that given the extremely high debt levels in the West, further inflation is impossible. On the other side of the argument, many proponents of inflation are calling for Zimbabwe style hyperinflation. In this business, everyone is entitled to their opinion; however it is my contention that we will get neither deflation nor hyperinflation. If my assessment is correct, once business activity picks up, our world will have to deal with high inflation.
So what exactly is the best way to grab profits from the important and often explosive world of commodities?
If we’re right about where the price of gold is headed, the general public will someday clamor to buy all things gold. While gold stocks will be where the real leverage is, the rush will start with gold itself. As a gold editor, I have a very natural question: is there enough to go around?
While prices of gold don’t necessarily affect silver prices or vice versa, history has demonstrated that when gold rises or falls, silver usually follows suit.
Gold was steady on Monday after briefly falling below $990 an ounce, as the euro trimmed some losses versus the dollar, but bullion looked vulnerable to a long liquidation after it failed to stay above $1,000 an ounce.
