Prepare For Fireworks In The Gold And Silver Sector

Aug. 30, 2012 12:32 AM ETGLD, SLV27 Comments
Bob Kirtley profile picture
Bob Kirtley
2.74K Followers

The Jackson Hole meeting is now upon us, a gathering of the world's central bankers who will put their collective brain power to work in an attempt to resolve the economic woes that most sovereign states are now struggling to remedy.

As investors in gold and silver, these meetings are important to us as they may provide us with clues as to what policy changes are about to be unleashed upon us, as they attempt to steer the world away from a global depression. The Federal Reserve is also charged with keeping unemployment low, and so it needs to implement strategies that will hopefully boost the American economy.

We have experienced those actions through the process of quantitative easing. Now, there are those investors who are interested in the precious metals sector who are of the opinion that without further monetary policy easing, which is a form of currency debasement, gold prices will tumble. We agree that the implementation of QE3 would drive gold prices much higher; however, we disagree that this is the one and only factor that will determine the future price of gold.

For instance take a look at the chart below:

The chart depicts the 12-month rolling return percentage change in standard deviation terms and suggests that now is a good time to invest in gold. We are also of the opinion that gold has been in a consolidation period for over a year, building a good base from which it can spring board to higher levels. Some of the central banks are now purchasers of gold, whereas in the past, they were sellers of the so-called barbarous relic. The sentiment towards gold is negative, just ask any of your friends or colleagues what percentage of gold makes up their portfolio and generally they will

This article was written by

Bob Kirtley profile picture
2.74K Followers
Bob Kirtley has traded options and stocks since 1980. Bob Kirtley spent many years working on Oil projects including some in Alberta, such as the tar sands installations in Fort McMurray. He lived and worked in many different countries, as that is the nature of the construction business. Planning and cost control are key to a projects success and he tries to apply those disciplines on a daily basis when dealing with investments. His training in such areas as SWOT and Risk analysis can be applied from time to time. His qualifications include being chartered in the United Kingdom, which is similar to that of a Professional Engineer in Canada, along with a Masters Degree in Project Management from South Bank University, London, England. He has been working for a number of years on a full time basis representing a group of investors in England.

Recommended For You

Comments (27)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.