“I’m Brazilian. I have gold. And I’ve just arrived from Rio richer than anyone…” Thus sang one of the characters in an operetta by Jacques Offenbach. But that was in the mid-19 th century. But hey… what goes around…
In the spirit of not suffering from confirmation bias, in today’s Notes we will try to make the bearish case against gold. So before you storm Notes HQ in Buenos Aires craving blood, hear us out. Many of our staff here love gold and have long term holdings.
The price of gold has had a solid triple since about 2001, when an ounce would set you back a mere $300 or so. (Remember that? Oh, the good old days!) For the past year or so, however, gold has been stuck, trading in the $900-980 range. It goes up a bit, down a bit.
The first thing I do when I sit down at my desk in the morning is check the price of gold. The second thing I do is check the price of oil. Sure, the price for gold and oil changes all the time. Prices go up and down, for good and bad reasons. Heck, sometimes prices fluctuate and the reasoning defies logic.
Another sure sign that inflation is a clear and present danger is the recent rise in oil prices. Wednesday, crude oil set its 2009 high at $54.83 in New York intraday trading.
In the gold business, there are two kinds of companies, says mining guru Doug Casey. First, there are the companies that dig gold out of the ground after it has been discovered. These are the “producers.” These companies have done well during the current gold bull market – up as much as 200% during that period.
Karim Rahemtulla from the Smart Profits Report says that putting your money in gold mining companies will help you milk your investments, not physical gold.
The gold-to-oil ratio is at ten-year highs – a single ounce of gold can now purchase 22+ barrels of WTIC crude. But what does it mean?
With food prices on the rise, the price of gold will drive. Martin Hutchinson of Money Morning says, “As gold goes up, it gets more popular and investors start piling into it…” Here are five ways to play bottom-basement gold.
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