Chart courtesy of Stockcharts.
As we can see from the above chart gold has put in a terrific run to gain $100/oz over the last four weeks. The stage is set for a pop at the $1000/oz level if not now then by the fall.
The financial sector is in turmoil with recent problems highlighted by Fannie Mae and Freddie Mac coming shortly after the demise of Northern Rock and Bear Stearns. The tensions in the Middle East continue to simmer, as Iraq and the United States remain engaged in a war of words. The printing presses continue to work overtime pumping liquidity into the markets. As we have said before liquidity is not the solution when insolvency is the problem as the real estate sector now demonstrates.
Gold is an indicator in that it leads inflation by twelve to eighteen months and the current level of gold prices is signalling that inflation is now out of the box and about to become a lot worse. On this web site we have alerted our readership to the importance of being invested in the precious metals sector with such articles as:
GOLD: You wont see $600/oz again! - 6th November 2006
“So, the question is “Are you in position? Have you bought the gold stocks that you have been watching for such a long time? Do it now. Don’t wait; you will not see $600.0 again!”
GOLD: BUY, BUY, BUY - 9th November 2006
“If you are not already in then make an investment as soon as you can. Gold is on the move in a big way. You won’t see $600.0 again! Are we getting to the point? Is anyone in any doubt? Whether you prefer gold Exchange Traded Funds, gold itself or gold mining stocks, as we do, do it now!”
Reasons to invest in Gold - 01 August 2007
“The mania that I traded in during the last Bull market will be nothing compared to the coming explosion in gold prices and maniacal actions of traders and everyday people in the coming bull market in the precious metals sector. Since 1979 everything has become a lot faster including the execution of your orders to the market. The speed and magnitude of change in the price of gold will be beyond your wildest dreams…”
As you can see we have been banging the drum for investment in precious metals market constantly. In our humble opinion the best is yet to come so bag a few of your favourite quality gold and silver stocks before the stampede begins.
Have a sparkling day.
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