Gold Is Back from the Dead

Gold used to be the anti-inflation trade. It appears oil has taken over from gold in that regards over the past 9 months or so. However, gold is still the Armageddon trade as evidenced by its strong showing during what seemed like End of Days this late winter and early spring. It is starting to perk up again.... I am tempted to buy my favorite miner on this breakout, Kinross Gold (KGC) - still debating.

[May 5: Closing Precious Metals]
[Jan 30: Starting New Position in Kinross Gold]

In terms of the market - we still need fear - but we're getting there - the move to gold is a good indication. As I stated yesterday that S&P 1300 level is our temporary bottom for now - those big round numbers always act as psychological support. If that breaks, off we go to January and March 2008 lows (1270s). As mentioned, those sucker rallies as we had yesterday afternoon are not be trusted.

As I said yesterday, the Federal Reserve basically left us to our own devices - after that initial silly euphoria wore off, we woke up today to realize all the same problems were there. I truly think with crude sinking (down $5 yesterday pre Fed) they could of drove a short term stake through the heart of some commodities with a 25 basis point raise and strong language about inflation. We got neither. The banks must be bailed out - that's all that matters it appears. Inflation can rage - since it does not show up in government reports.

No position

Comments

[User 30121:]

You got it right!

2008 Jun 27 09:16 AM

[pachanguero:]

Mark, give us coal updates!

2008 Jun 27 09:27 AM

[GMiki1:]

Who thought gold was dead? People who don;t follow the gold market. People who have attention deficit disorder.

As investors such as Jim Rogers and Warren Buffet say, you can't look every day. Of course you can't not look, but you can sit on your hands and not trade.

2008 Jun 27 11:06 AM

[jetsby10:]

gold is so dead, it's only at around 900 bucks. That's like saying the Boston Celtics were dead going into game 6 in Boston up 3 games to 2. Gold's going to crush the dollar even worse than the Celtics crushed the Lakers in the end.

2008 Jun 27 02:14 PM

[CLH:]

Im now entering the church. I call gold the church because people believe for no rational reason. Gold hit $800 in 1980. If you were dumb enough to hang on you just broke even after 28 years. Wow what a great investment. Next 28 years the same? Probably.

2008 Jun 27 06:11 PM

[Mongoose:]

You could have lost money on any stock there ever was, if you bought high and sold low.

2008 Jun 27 09:27 PM

[Jake2:]

Some people close their eyes in church. Others keep their eyes on the prize: buy a little, sell a little, retrench. Stick your big toe in again. There you go . . .

2008 Jun 30 01:36 AM

[blink0404:]

gold isn't dead yet. it will start to down when the fed takes a stronger stance on inflation...

I think you should watch silver. when silver peaks, overbought, then it's time to sell gold.
here's a link to an article that describes this in more detail.
www.greenfaucet.com/ha...

2008 Jul 02 03:29 PM