Did you miss your opportunity to stock up on gold? Fear not. It looks like you’ll have another opportunity to join the gold-bugs very soon.
Yes, I know it can be a bit daunting to watch the gold euphoria shoot prices up over US$1,000 per ounce, and then fall below US$900 per ounce just a couple weeks later. But as I have said throughout this bull market which started about seven years ago, this decade belongs to commodities. And we’re not anywhere near done yet.

The facts haven’t changed. Precious metals are still in a secular bull market, while the almighty dollar is still stuck in a depressing bear market.

Our beloved gold has risen dramatically…nearly 280% over the past 7 ½ years. Silver has gained an incredible 350%! But both of these metals have risen in large part as a result of the fundamentally weak U.S. dollar.

Even Healthy Markets Have Healthy Corrections

That tells me we’re still in a very healthy precious metals market. But, unfortunately (or “fortunately” depending on your point of view) even healthy markets correct.

In fact, markets have to correct. There’s simply no other way to burst the speculative bubbles that develop when an asset gains price momentum. And, quite frankly, this isn’t the first time that gold has needed to take a healthy breather. This has happened before…

• February 2003 ($382.10) to April 2003 ($319.90) – 16%
• April 2004 ($427.25) to May 2004 ($375.00) – 12%
• May 2006 ($725.00) to June 2006 ($567.00 – 22%*
  *It is generally understood, when a market corrects more than 25%, it becomes a trend change.

All figures basis the London PM Fix

Thus far in this correction, we have seen the gold price pullback from US$1,011.25 on March 17th to US$887.75 on April 1st. And as of yesterday, gold has jumped back up to US$926.60.

Will we go further? We may. We may not. In the end, that seems less important than the need to recognize this short-term price correction as an opportunity.

After all, we expected this. We suggested to Mike Burnick in the January issue of The Sovereign Individual that we anticipated a correction, and we expected it by tax day. As of yesterday, we’re still in a correction. That means it’s time to buy – before this temporary correction passes.

Why Gold Is So Darn Popular, and
Everyone Hates the Dollar

Precious metals are on a tear right now for several reasons including…

• emerging middle classes have an affinity for precious metals
• investors are hungry to stock up on metals
• you now have new ways to access physical, precious metals markets
• several jurisdictions now allow you to own metals, that refused to let you own metals before (including the U.S.)
• precious metals have new industrial uses
• the low-hanging fruit has been picked already, so now it takes more time, innovation and money to get metals out of the ground

By the way, none of these factors changed over the course of the past month when gold started to correct.

Meanwhile, the dollar isn’t doing well because…

• the sub-prime lending crisis continues to weigh down the economy
• money supply has dramatically increased worldwide
• inflation is on the rise because of oil’s incredible rise
• fighting terrorism is getting expensive
• the U.S. can’t manage its own debt and deficit problems
• the housing market continues to slow
• consumers aren’t as willing to spend
• more people are out of work – with unemployment on the rise

These factors have changed over the past month. They are getting worse!

It should be no surprise to anyone that the U.S. dollar is losing purchasing power. The greenback dropped a little over 8% in value over each of the past two years. And the once “almighty buck” has already shed over 6% of its purchasing power in just the first quarter of 2008!

As the purchasing power of the dollar wanes, intrinsically valuable assets such as gold will continue to shine. After all, by historical standards, we are not even half way through this bull market. History tells us that secular bull markets in commodities last anywhere from 15 to 20 years!

At the seven-year mark in the cycle, I’m confident this particular bull market will not be the one to rewrite history.

In gold we trust…and in silver, platinum and palladium too!