Greetings, Gladman,
My opinion of Gold, ST--
My perspective is this:
Gold is now a currency, aka an alternative to the US$.
The US Economy is now NOT the #1 driver of global economics.
Therefore it stands to reason that the US$ currency is not the most desireable vehicle, due to rampant printing prices on our side of all the "big ponds."
This gold sell-off ended in the $542 area as best I can tell.
It must price chop sideways (a legit resolution to a violent sell-off as opposed to an immediate rebound for example) for a period of time before attempting to resume the basic up trend.
I believe this chop will be completed between now and the 3rd week of July.
That's pretty short term. I don't know what you mean about short term, but that is my shortest term definition/viewpoint.
LT:
I see gold resuming its upward trend and being closer to $800 than $700 by 12/31/06 in the spot market.
Is that your definition of LT? 6 months from now?
After that, an even longer term view places gold going much higher, due to the US$ weakness. This weakness will be an engineered weakness, as in prior economic cycles in order to achieve patented reduction in the three deficit positions we currently possess #1 status: Current Account Deficit, Trade Deficit, and Budget Deficits.
That is a mucho LT viewpoint...one encompassing between 2 and 5 more years. I will NOT get the top dollar peak, nor am I trying to "catch that nebulous" top.
After 5 years, well, I'm still peering through that murky glass and can't find my Windex<grin>
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Recommend buying bullion or PM Stocks?
Both types will do well, but for different reasons.
PM stocks are obviously leveraged vehicles to the price of the raw material.
Owning of physical PMs are obviously fully paid for items, therefore, fully exposed to the price of gold, i.e., less leverage, and more considered to be insurance against eroding US$ purchasing power, economic dislocation, etc.
You may be unaware that:
Under SEC regulation, the price used on balance sheets of listed PM companies to calculate their drill proven reserves are a 3 year average, and it is my understanding that is either the calendar 4th quarter average or a fiscal 4th quarter averaging event per company.
Therefore, no PM mining company's drill proven reserve ounces calcs will ever be "current" due to this averaging requirement.
If you are interested in leverage, you might consider a mixture of PM stocks and BASE METAL stocks in this portfolio allocation consideration.
The reason is simple: emerging economics require voracious amounts of multiple base metals to upgrade standards of living for their citizens. Some examples are: copper, manganese, zinc, nickel, moly, tungsten, titanium, iron, sulfur, etc.
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LT:What are your goals?
Are you as familiar with selling gold as you are buying it?
Ditto: PM stocks.
Selling, whether PM physical or PM equities, is more difficult than acquiring either PM "type."
If you are going to acquire either "type," please also construct an "exit strategy" so you are not left being a "bag holder" after the show is over and the deficits have been "cured" by the deliberate engineered weakening of the US$.
I hope this helps.
Nice to meet you.
G_T |
