I speak at many global investment seminars with Michael Checkan, one of the true foreign exchange and gold experts in the U.S. Here are his comments on gold now.
For the year the dollar is down against the Euro ($ 1.25 per Euro) by about 19% and the gold price ($ 415.00/oz) is up by about 18% for the year. So, the dollar/gold scenario continues to work even now after about 2 1/2 years as my primary lead indicator.
I do expect continued volatility in the precious metals/foreign exchange markets in 2004. In fact, with the Euro at all time highs and gold getting close to the next resistance level of $ 420 and $ 425 it appears a short term correction is in order. I would not be surprised to see this take place in January/February.
The long term investor/wealth preservation clients we work with will not try to play this market. Instead, they will continue to do their dollar cost averaging programs. We recommend using this method on getting into and out of markets.
Our more aggressive but still non leveraged clients will take the opportunity to buy the precious metals and foreign currencies against weakness. This baby bull market in commodities has a number of years to still run. In fact, the dramatic upward moves will only be coming in President Bush's next four years.
In fact, the decline of the US dollar and the rise of gold has been an “orderly” market. The dramatic $100 moves in gold trading per day and the 5% daily moves in the “funny monies” that we both saw in the 1970's have not been seen yet in this decade. But, this is the decade for commodities so there is something to look forward to in the next 7 years.
Having said all of the above, I am not a “gold bug.” I am not personally placing all of my money in gold or the Euro. However, I have increased my investment allocation in commodities/natural resources. As for stocks, which I really know nothing about, I have allocated 20% of assets. They have done well this year but their move is over and I will reallocate down to 15% or lower in the weeks ahead.”
You can learn how to hold gold at a very low costs with Perth Mint Certificates from Asset Strategies at firstname.lastname@example.org
Next message we look at strategy number two for doing well in the upcoming crash.
Until then, good investing.