Gold Bullion–Not a Rocket Ship Just Yet
Wednesday, September 6th, 2006
By Michael Lombardi, MBA for Profit Confidential
Yesterday, gold prices surged $14 U.S. per ounce to a new post correction high of $647 U.S. an ounce. While many gold bugs were out celebrating the return of the gold bull market, I caution my readers.
In the short years ahead I see gold prices trading much higher than their current level. I’ve expressed this to you in many of my financial columns over the past three years. But at this point in time, I wouldn’t call the correction in gold prices complete. In fact, I wouldn’t be surprised to see gold bullion simply trading slowly up or down in the couple of months ahead.
Why the caution?
It seems to me that every major investment player is short the U.S. dollar. Gold will rise in price as the U.S. dollar collapses because it will be the only alternative for investors to flock to. But right now, with so many investors bearish towards the U.S. greenback, I’m not so sure the U.S. dollar is ready to collapse.
In my investment experience, when everyone in the market expects something to happen, it usually doesn’t. We’re going to need to see some more damage to the American economy occur before the U.S. dollar comes in for a landing. Lower American property prices, more debt, and lower U.S. retail sales remain ahead: As this story develops the U.S. greenback will start to fall.
In summary, I’m bullish as ever on gold bullion and quality gold stocks–I simply think gold will be a huge winner in the years ahead as the value of the U.S. dollar is thrown into question by big foreign investors. But I don’t think gold will simply takeoff from here after its brief price correction. (We’d be kidding ourselves if we thought that.) Some more time will be needed for gold bullion prices to consolidate and to form a solid base from which to make its next major move up.
Next Post: Will Continue to Hear About China StocksPrevious Post: Company May Provide Decent Trade
Tags: gold, gold bull market, gold stocks, U.S. dollar
Tweet
Sign Up for PROFIT CONFIDENTIAL and
receive a FREE copy of our exclusive report:
"A GOLDEN OPPORTUNITY FOR STOCK MARKET INVESTORS"
We respect your privacy and
will never share your e-mail address.
Michael bought his first stock when he was 17 years old. He quickly saw $2,000 of savings from summer jobs turn into $1,000. Determined not to lose money again on a stock, Michael started researching the market intensely, reading every book he could find on the topic and taking every course he could afford. It didn’t take long for Michael to start making money with stocks, and that led Michael to launch a newsletter on the stock market. Today, Michael only employs the top market analysts and editors. Some of our recommendations have posted gains in excess of 500%! Michael has authored and published over one thousand articles on investment and money management. Along the way to building Lombardi Publishing Corporation, now with over one million customers in 141 countries, Michael became an active investor in real estate, art, precious metals and various businesses. Readers of the daily Profit Confidential e-letter are offered the benefit of the expertise Michael has gained in these sectors. Michael believes in successful stock picking as an important wealth accumulation tool. Married with two children, Michael received his Chartered Financial Planner designation from the Financial Planners Standards Council of Canada and his MBA from the Graduate Business School, Heriot-Watt University, Edinburgh, Scotland.Follow Michael and the latest from Profit Confidential on Twitter



