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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (12788)	10/4/2004 3:45:39 PM
From: Jim McMannis	Read Replies (1) \| Respond to of 116555

Why buy gold if you can just long other currencies or short the dollar? I've always been under the impression that in order to have a major gold rally you need the anticipation of inflation. Even when the anticipation becomes the reality you need further anticipation to keep it going. My experience is that gold is a major leading indicator as well. Oftem moving a year before we start to see inflation. And gold stocks anticipate that by a few months. Gold stocks then give you 3-4 time the leverage as physical gold. Still someone has to step in and buy the physical gold to keep the rally going. The only way (IMHO, been doing it for 25 years) )to play gold is to trade it. Using technical analysis on the XAU as a tool to measure the extreme emotionality. Tends to get overbought and oversold regularly.