With all the economic problems facing America and the world today, with all the talk about inflation, typical investors would think gold prices would be moving higher. But readers of PROFIT CONFIDENTIAL are not your typical investors. As Mitchell Clark says, they are “ahead of the Street.”
Back on April 3 of this year, I wrote a very important column in PROFIT CONFIDENTIAL in which I described to my readers the seasonality factor of gold bullion prices. In a nutshell, my studies showed that gold bullion prices go into hibernation between spring and fall of each year.
My research concluded that investors are better off buying gold in the early fall as opposed to buying the metal, or gold stocks, in the spring or summer. Every year since 2004, gold bullion prices have been at the same level in April/May as in August/September of the same year.
This theory has held up well in 2008 thus far. Gold bullion closed Friday at about $926.00 U.S. per ounce, about the same as in early April of this year.
Readers of PROFIT CONFIDENTIAL know I am a big fan of quality gold producer stocks. Not because of inflation; in fact, I see deflation ahead. Not because of the week U.S. economy, but because of the spiraling U.S. deficit. And, most importantly, I see gold bullion prices continuing to rise in the long term as the status of the American dollar as the world’s reverse currency becomes more of an issue.
Late August into September is the ideal time period for investors to seriously consider gold bullion and quality gold stocks for their portfolios. Gold has proven to be a remarkable leading indicator for the future of the American economy.
Back in 2002, when gold was trading under $300.00 U.S. per ounce, the viability of the American dollar as the reserve currency of the world was not in question. But the action of gold bullion that year gave us a signal of what was ahead for the American dollar. Calling the start of the bull market in gold that year has been one of my best calls for PROFIT CONFIDENTIAL readers. Hopefully, it made some readers some money.
Looking ahead, I see $1,000 gold “in the bag” in the months ahead… and quality gold stocks resuming their seasonable uptrend by early fall of this year, if not sooner.