Well,well, well, We will say that again because it is so nice to do so, $1000 to buy one once of gold - Yes!

Although it was touch and go gold finally touched this magical number albeit for a short time before backing off to $990/oz to tease us a little more.

In our recent update on gold we referred to the US Dollar getting a shot in arm from the Federal Reserve and questioned how long it would last, not long appears to be answer as the once mighty dollar resumed its relentless march to the south pole. All eyes are now focused on the 18th as we wait to hear what the rate cut will be, for what it is worth we think another half a point will be delivered from the Feds. This will give the broader market yet another fix, put another nail in the dollars coffin and cause gold to act in its usual inverse manner to the dollar and go higher. How high you ask? Trying to analyse at this micro level is a sure way to look silly but for what it is worth we think it will go to $1010/oz - $1020/oz. A lot depends on just how much media coverage this new high attracts. The coverage has certainly been building and this milestone should generate a lot of headlines for gold. The media coverage will attract new investors with new cash to inject into this relatively small sector of the market. On the other side of the coin we will see some profit taking, although we suspect not a great deal. Some of our readers have adopted a policy of keeping hold of their shares and buying ‘Put’ options on both gold and silver as an insurance policy should there be a correction. There isn’t a strategy that will fit everyone of us just as there isn’t a suit that will fit everyone of us. We are all unique individuals who require a unique investment strategy, albeit within an overall framework that has similarities. Years ago the conventional wisdom was to put about 5% of ones investment cash into gold and associated precious metals mining stocks. Our approach has been far more aggressive as we have been 100% invested in this sector of the market, as of today we have 13.25% in cash, on the sidelines which we regard as ‘opportunity capital’ and when that opportunity presents itself we will go for it.

Do remember though that when something is at the bottom you tend to think that it can never go up and when something is at the top it can never go down. Several years ago in Britain the pound fell out of the European monetary system and the base rate leapt up to 15% and most of us thought that we would never see cheap mortgages again. Over time and with some creativity from the mortgage lenders we were able to borrow at rates of around 4%, again thinking that those high rates had been banished forever. What short memories we have. As with gold we are at a new top and the euphoria is spreading like wild fire and we are enjoying it as much as the next gold bug, if not more. The next week or two will be fascinating to observe as we look for the next opportunity, whether it be a buy, a sell, a Put or a Call option. This has to be the most exciting place to be in terms of investment that is fast moving and sensitive to a myriad of variables.

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