Gold Price Update

Includes: GLD, IAU, SLW
by: Bob Kirtley

US Dollar Chart 14 June 2010.jpgClick to enlarge

(Click to enlarge)

As we mentioned recently, the dollar may well have run its course for now having been the main beneficiary of the perils that have swamped the euro. The chart above shows the US Dollar gradually heading south over this three day snap shot. Once the heat comes off the Euro the dollar will be next to go under pressure as the fundamentals look none too rosy.

Short on stocks and long on Commodities -- that's Jim Rogers today. Other points of note in this interview included his comments on the euro, which he thinks could put in a short term rally only because everyone he knows is so negative on it which suggests to him a bounce could be on the cards.

A weak euro means more printing of money and ultimately more inflation and therefore he suggests that we should hold real assets, cotton, silver, natural gas, etc. Now, this next comment is very interesting. He said that if you are not a very good stock picker then you should stick to the commodity itself. So where do we go from here? Well, the first step regarding investment in this sector is to get your paws on the real thing, physical gold and silver. After that we can select some of the associated precious metals stocks, maybe place some cash with one of the funds or select a suitable vehicle for the implementation of options trading. The stocks do come with a myriad of risks including taxation which has recently popped up in Australia. A change of government anywhere in the world can bring about a new set of laws that were not even on the horizon when the project commenced.

You can always turn to a professional financial letter writer for advice in the sector that captures your interest and there are lots of them out there, but do try and get a recommendation from someone who has used the service over a reasonable period of time and considers it to be value for money.

From Jim Rogers to Jim Sinclair who has just sent us this missive:

The cat is clearly out of the bag concerning the forthcoming bankruptcy of 33 states of the USA.

This moronic New York non-solution to borrow from state pension funds, which now cannot meet their pension requirements, screams bankruptcy. The Administration calling for $50 billion for states and cities would appear to be confirmation of this financial phenomenon. The sign that the financial problems of the states of the USA are going critical and will make the EU situation look like kindergarten, in market terms, will be a stronger euro and stronger gold, sort of like now (9:09 EST).

A shift in the recent relationship between gold and the euro would signal that recognition by markets.

Finally we have this short clip from CNBC with Peter Schiff suggesting that we should be buying gold as it could go to $10,000/oz if governments keep producing money out of thin air. It's worth a watch.

Disclosure: SLW