Jim, i know of PEI's stance on gold...their chief analyst recently explained it in detail, and every single argument could be refuted with similarly plausible arguments to the contrary.
if anything, the fact that virtually everybody is bearish on it, is imo a very good sign...PEI has btw. a chequered history re. forecasts. some have been spectacularly correct, others just as spectacularly wrong.
they like to issue extreme forecasts (as recently as February of this year they were convinced the S&P would blow off to 1,800 by April)presumably to garner attention.
they have been perma bears on gold, which so far has been a correct stance, however their targets have not been reached, and i doubt they will be (the Swiss sales are already priced in...the Washington agreement clearly specifies the amount to be sold annually by the 15 CB's that are signatories to it, and the Swiss sales are included in the agreement. the market never worries about known quantities, so this is a red herring).
while i agree that turmoil in equity markets is not a precondition or guarantee for a rally in gold, the dynamics of the gold supply/demand equation have become quite favorable, and the trend is clearly an aging trend that has lost momentum. in non-US currencies the trend has already morphed into a bull trend, as the PoG has remained relatively stable in USD while the dollar has rallied.
while the performance of most gold stocks has been nothing to write home about lately, the XAU lead sled dogs have performed better then most tech stocks in recent weeks, in spite of a stagnant PoG:
finance.yahoo.com
finance.yahoo.com
is it too early to buy? maybe, but when the gold rush comes, these stocks will go far and fast...even if it's only another bear market rally.
regards,
hb |
