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  • Gold Bullion As A Strategic Investment 0 comments
    Jan 15, 2013 8:55 AM

    When the gold prices rise, the gold mining stocks become hot favorites for investments. The past twelve years have seen this trend: Every year, gold bullion starts with a certain price; suffers a few slumps and then recovers to end the year with a price higher than with what it started with in the year. The slumps are considered as weaknesses by many. But in actuality, they are mainly due to corrections in the ongoing bull markets. And this is the time when it is advisable to invest in gold. As such, Michael Lombardi, editor of Profit Confidential, does not seem unduly distressed that the final weeks of December and the starting ones of January were not paramount for the investors of gold. In his recent article "Gold Price Weaken as Central Banks Rush to Print Money? I Smell Opportunity", Michael says that he has followed the strategy of investment in gold or of buying more gold related investments whenever the situation of declining gold prices has presented itself and he has never suffered on account of the same.

    According to Michael, recently, gold prices suffered a large decline in prices. On January 4, they sold off at a low of $1,626 after having traded at high of $1,695 an ounce on January 2. The reason was attributed to the response of panicky investors, who after gleaning information from the minutes of the Federal Open Market Committee (FOMC) meeting that the quantitative easing could probably be ended sometime in the months of 2013 (and not until the rate of unemployment touched 6.5%; as per the original plan), sold their gold positions.

    Michael Lombardi is of the opinion that gold is a global currency and it has an intrinsic value. The current scenario is that of a devaluating U.S. dollar with respect to other major currencies of the world. Resultantly, the exports of other nations are becoming costlier and so the central banks around the world are straining to undervalue their own currencies. A fine example, Michael says, is that of Japan, who is working towards devaluing its Yen and the said currency has notably dropped in value in comparison to a basket of popular world currencies and at more than 10% against the U.S. dollar in the year 2012. U.S. and the Fed have already been working at this since the financial crisis. Even the central banks of Philippines, Brazil and South Korea have now followed suit.

    Michael Lombardi believes that whenever there are pullbacks in a rising bull market, it means that the market is robust. And so with more money printing strategies, his expectations that the gold prices will escalate, increase.

    In another of his articles "Gold at $13,000 an Ounce? Okay, How About $6,440?" he states that he is bullish on gold and that as long as the central banks are net buyers of gold, the demand for the shiny metal will not cease. He also feels that when he looks at the Dow Jones Industrial Average and gold ratio, he can say that gold prices might reach $13,000!

    For more news read

    Michael Lombardi is the author of the daily e-newsletter Profit Confidential. An active investor in real estate, art, precious metals and various businesses, he is also a successful stock-picker.

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