Lombardi: Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986

Posts Tagged ‘gold bull market’

This Morning, I Bought a
Basket of Gold Stocks

By for Profit Confidential

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.

China and India: Gold Buying Bullish

By for Profit Confidential

Gold prices are currently under some pressure following a decline below $1,700, but I view weakness in the precious metal not as a sign to sell, but as an opportunity to buy. The fact that gold is losing momentum at this time despite what I feel will be some tough years ahead for the European Union and eurozone along with the debt mess here is a surprise. But when the metal has increased as much as it has, there will always be those who believe that the price will retrench back to some medium-term support at around $1,600.

The Place You Need to Have Capital in 2012

By for Profit Confidential

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.

Mainstream Investors Start Foray into Gold

By for Profit Confidential

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…

Answered: Can I Still Make
Money Buying Gold Now?

By for Profit Confidential

Most investors likely fall into one of these three categories: They likely haven’t bought gold investments yet and they are thinking it may be too late to get in. Or they have bought gold investments and they are wondering if they should by more at these prices. Or, like me, they take as many opportunities as possible to buy more gold investments each time the price of gold bullion pulls back.

Why You Might Want to Look at Buying the Miners

By for Profit Confidential

George takes a look at examples of mining investments—gold, silver, copper, molybdenum—and why you might want to consider adding them to your portfolio right now.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 as fear. I smell opportunities, especially in the miners, which have lagged behind the gold and silver rally.

I like the smaller mining companies, especially those with a massive reserve of metals in the ground waiting to be developed.

The October Gold is hovering around the $1,600 level on oversold buying, but remains below its key 50-day moving average (MA) on weak Relative Strength. The golden cross on the chart remains, with the 50-day MA of $1,742 above the 200-day MA of $1,524.

Gold is extremely oversold. I feel that gold prices will hold and edge higher if the U.S. economy falters and another recession surfaces.

The SPDR Gold Shares (GLD) exchange-traded fund (ETF) is worth a look. For added risk and potential gains, take a look at the Direxion Daily Gold Miners Bull 2X Shrs (NASDAQ/NUGT)—an aggressive trade aimed at capitalizing on surges in gold at twice the normal rate.

The December Silver is around $30.00, but is facing selling. The next target is the 200-day MA at $36.05. The 50-day MA is at $39.95. The near-term view is bearish, but the chart is holding on to the bullish golden cross. With the selling, silver is extremely oversold.

While … Read More

That Gold Chart’s No Fluke

By for Profit Confidential

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.

What We Saw on TV Last Night: Sell Dollars, Buy Gold

By for Profit Confidential

Michael's commentary on President Obama’s speech to Congress and the nation this past Thursday night.I know this is a financial e-letter. But I can’t pass on the opportunity to comment on President Obama’s speech to Congress and the nation this past Thursday night.

Maybe I’m the only one who doesn’t get it. Maybe these politicians are all smarter than me. I see something very wrong.

Each time the President gets up to say a speech in front of Congress and Americans via television, I see all these people in the chamber smiling, hugging each other, shaking hands, clapping—these people look very happy to me.

But what’s there to be happy about? They are all failing miserably at their jobs. They’ve failed to revive the pathetic American economy. They’ve created a huge debt for our children. They’ve managed to get the U.S.’s once-stellar debt credit rating downgraded. The underemployment rate in this country is 16.2%, and these people sitting with Obama are all happy? Most companies would have fired them by now.

So President Obama is asking Congress for another $447 billion in spending initiatives and tax cuts to stimulate the economy. We were told this new stimulus package would be “paid for,” but we need to wait until a week from Monday to find out how. We did get a clue—taxes are going up for the “rich.”

Obama talked about Warren Buffett in his speech and how Buffett is “asking” to be taxed more.

Here’s how I see it:

Warren Buffett’s salary from Berkshire Hathaway is just $100,000 per year. Increasing the tax rate on “rich” Americans would not affect Buffett at all, since most talk in the past on raising the marginal tax … Read More

Gold: Getting Ready for
the Coming Correction

By for Profit Confidential

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.

The Biggest Bubble of Them All—Right Before Our Eyes

By for Profit Confidential

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

Dividend Yields Going up—They’re
the Equity Investor’s Best Friend

By for Profit Confidential

Perusing the stock market for opportunities, I’m discovering some very good values in the marketplace. Economic conditions aren’t the rosiest, as you know, but there are a lot of quality businesses out there that just went on sale. Also useful, dividend yields have gone up with the market’s recent correction. I believe in the attractiveness of dividends, even when dealing with smaller, higher-growth companies.

The Smartest Dictator of Them
All Seizes All the Gold

By for Profit Confidential

You’ve got to love this guy, Hugo Chavez. The President of Venezuela had already nationalized the banks and the oil industry. Now he’s going after the gold. Chavez took to state television yesterday to tell his people that the gold industry is “run by the mafia,” so “We’re going to nationalize gold. We can’t keep allowing them to take it away.”

The Gold-to-Silver Ratio: Why It’s Important, What It’s Telling Us Today

By for Profit Confidential

What the gold-to-silver ratio is, why it's important and what it's telling us today.~ reporting from Venice, Italy

I often write about gold bullion in my commentaries, but not much about silver. And my readers are writing asking me what I think about silver. As usual, I’m happy to present my ideas and forecasts.

Right up front, I want to say I’m more biased towards gold than silver as an investment. I’ve been pushing gold since 2002. At that time, I started getting concerned about spiraling U.S. debt and the increase in the money supply.

My thought has always been: if the validity of the U.S. dollar ever comes into play, gold will be the currency of choice. Not silver. I can see the government eventually forced into a situation where U.S. dollars again will be partially backed by gold bullion. I can’t see U.S. dollars backed by silver.

On the other hand, silver is used in many different industries, whereas gold is still primarily used in jewelry and as an investment-related commodity. And, as the economy in China continues to boom, as we believe it will, demand for silver for industrial use will continue to rise, pushing up silver prices.

Gold prices are up about 13% this year compared to a 29% increase in the price of silver so far in 2011. Silver is actually outpacing gold in terms of price appreciation this year.

The gold-to-silver ratio works like this: we take the current price of gold and divide it by the current price of silver. Historically, over two centuries, the gold-to-silver ratio has been 37-to-1. Today, it sits at 40-to-1.

What does this tell me? It tells me that silver … Read More

The Most Important News to
Listen to—It’s the Real Deal

By for Profit Confidential

I still feel that the most important news investors should be listening to is from corporations themselves. They are the enterprises, not government, and therefore they are the drivers of earnings growth. The fact of the matter is that we are in the age of austerity, and we deserve to be. All the excesses of the past have created the slow economic environment of the present. Investors’ concern about government cuts to spending is a worry that’s misplaced. The economy shouldn’t be based on government spending and stimulus; that’s up to individuals and entrepreneurs.

Gold’s Recent Price Action: Separating
the Men from the Boys

By for Profit Confidential

The latecomers to the gold bull market have been feeling the heat the last couple of days.

After reaching a record high of $1,540 an ounce only seven business days ago (on May 3), the price of gold bullion has fallen $55.00 to $1,485.

But it’s not the price of gold bullion that has investors and speculators worried. After all, the price of bullion is up $252.70 an ounce, or 20.5%, over the past 12 months. The fear and concern lies with the price action of the gold stocks.

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