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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank
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To: Gord Bolton who wrote (16126)10/3/1998 12:19:00 PM
From: j g cordes  Read Replies (2) of 120523
 
Gord.. my humble opinion is that gold is nearing the end of its run. Many gold stocks are up 60-70% off their lows on flight to safety reasons. I don't feel (and I could certainly be wrong), there are compelling value reasons to go a lot higher... there are a few wild card possibilities...

A country like Russia could try and offer credible international currency stability by going on a Ruble/gold.. mark to mark standard... unlikely. Remember also interest rates were recently cut and will probably be cut again, inflation is normally golds pricing partner. Hedge fund buybacks have been overplayed in the media. Gold demand is not exceeding supply.

In related matters, oil stockpiles are heavy and there could be a sympathetic reversal in crude to retest lower support, especially if world economic growth prospects remain low for the next six months. Oil and gold have often run up and down together quite often.

There is perhaps some play left in gold relative to dollar pricing, which needs to come down to unstifle commodity based countries and debt relationships.. and there's probably a little play left in world angst and safe haven appeal..

BUT if Japan does make a move towards bank reform, if G7 policies get a grip, and if banks are found to not univerally be in trouble.. then gold will fall quickly as countries renew dumping their reserves into this very attractive price pop.

Jim
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