Bullish or bearish?
3-24-08 -- Commodity prices fell 9% last week as the same speculative investment funds which drove oil and gold prices to record highs on Monday decided it was time to take profits, sending gold down from $1,002 to $910 an ounce.
Other major factors prompting last week's commodity rout include; the Fed slashing rates less than expected (triggering a dollar bounce from historic lows), fear of central bank currency intervention to protect foreign economies, gold liquidations to cover stock margin calls and a weakening economic outlook for 2008 despite higher inflation.
So after running nearly 40% since August 2007 the gold bull is finally stopping for a rest.
Gold BEARS view this pullback as proof that $100 oil and $1,000 gold represent a market top, the same as they opined when gold prices hit $500, $600, $700 and $850 an ounce -- and oil prices hit $70, $80 and $90 a barrel.
Gold BULLS view this correction as a chance for investors, who feel they have missed the boat, to jump on board a long-term secular bull market that is still very much intact.
The Wall Street Journal reports that gold remains far below its 1980 peak after adjusting for inflation, with several analysts saying gold prices must rise to $2,400 an ounce to reach a new peak.
"Gold is even looking more attractive after this consolidation," said Swiss America CEO Craig R. Smith. "This is a healthy correction and a rare opportunity for wise investors to add gold to their portfolio. Value investors are buying gold to protect against future equity losses amid the ever-widening credit crisis on Wall Street."
"During the last major gold price correction in June 2006 gold stepped back 24% from its May peak of $725/oz. down to $550/oz, then prices proceeded to nearly double in less than two years. Mr. Smith's advice today remains the same as it was then, "R e l a x!".
Says Mr. Smith, "I remember when a $20 bill and $20 gold piece had the same buying power until FDR recalled gold in 1933. Re-balancing your portfolio with hard assets can help insure the return OF your money and stop worrying so much about the return ON your money."
Read what over 50 other gold experts have to say about gold's brilliant future here.
Request a free copy of Mr. Smith’s FREE “GOLD 101” DVD here.
Request a media interview with Craig R. Smith by calling Bronwin Barella at 800-950-2428.
