gold bull market
Since Monday of this week, the price of gold bullion has dropped $91.00 an ounce. If we look at gold for the year, gold bullion is off 17% from its price high of $1,895 an ounce reached on September 5, 2011. This is enough of a correction in the gold bull market for me to go back in and buy gold investments at what I believe are depressed prices.
The market chaos continues to grip the stock markets. We have the European debt crisis and a concerted effort to fix it, albeit it will be extremely difficult and take years.
The European Central Bank (ECB) cut the eurozone’s interest rate by 25 basis points to one percent—the second cut in five weeks. However, keep in mind that the ECB increased rates two times prior to the cuts. The cut will have little impact on the effort to revive the region and avoid another recession given the debt crisis. The ECB should have cut interest rates to below one percent as we did in the U.S. and as the U.K. did. The concern was that inflation in Europe is three percent, so the fear was that lower rates could drive up inflationary pressures.
Debt fears in the eurozone resulted in demand for gold coins inEurope, more than doubling in the third quarter of 2011 compared to same period of 2010, according to data from the World Gold Council. But there’s more…
Metals are under selling pressure, but I feel that the selling has been overdone. Use the current weakness to buy, but be careful, as metals are extremely volatile at this time.The reality is that the global climate continues to be favorable for metals given the U.S. deficit and the debt crisis in Europe (and the U.S.).Yes, metals have been in correction mode, but I do not see this. Read More
The precious yellow metal continues to hold up well on the price chart, as traders shift capital from the higher-risk equities to the safe-haven sanctuary of gold.
I’ve learned many things about investing over a career that has spanned 30 years. One of the biggest lessons is that not a single investment goes either straight up or straight down. When an investment is rising in price (bull market), there are usually dips and corrections on the way up. Just look at the long-term secular bull market in stocks that started in the early 1980s and ended in 2007—there were many times stocks “took it on the chin” during that 25-year bull market run.
There’s an organization that’s been around for about 235 years. It’s more like a business today, taking in money and paying its bills. After World War II, this business really got into high gear. It started exporting its goods all over the world. It actually lent money to its trading partners. Business was booming