Does gold's latest tumble signal the start of a new dollar
rally? Or is this sell-off merely the latest of many buying
opportunities gold has presented to investors during the
last three years?
Your editor favors the latter interpretation, and will
seize this opportunity to offer a couple of predictions for
the collective benefit – or detriment – of all Rude
Awakening readers:
1) Gold will recover its footing later this week, as
surprisingly strong PPI and CPI readings cross the
newswires.
2) Villanova MIGHT win the NCAA championships.
(In the event that neither of these predictions comes to
pass, your editor reserves the right to revise history
according to his liking, or to offer a new and improved
prediction concerning some other future event).
Most likely, neither of these predictions will come to
pass. Even so, investors should brace themselves for the
possibility that financial underdogs will deliver a few
more "shockers" over the coming weeks and months.
Specifically, we investors should not be too surprised if
the gold market "pulls a Bucknell" over the stock market,
by charging toward $500 an ounce while the Dow slumps below
10,000. Nor should we be surprised if the bond market
withers in the fourth quarter...just like Wake Forest.
The current "buying opportunity" offered by the gold market
may prove to be more remunerative than most, simply because
the gold market has quite a bit of catching up to do. Even
before yesterday's miserable performance, gold had been
lagging well behind most other commodities. As the chart
below illustrates, gold has advanced a mere 4% since the
end of 2003, compared to a gain of 26% for the CRB index.
We suspect that this underdog is on the verge of producing
a string of surprising "upsets," perhaps as early as today,
when the Bureau of Labor Statistics releases its producer
price index (PPI) report for February at 8:30 AM Eastern
time. Or maybe tomorrow, after the CPI report crosses the
wires.
"Gold is one of those markets that can snap back and rally
quite quickly," says Kevin Kerr, editor of the Resource
Trader Alert, "so trading back down here may entice some
investors to step back in and buy value where they might
not have been willing to before."
Assessing gold's long-term prospects, John Myers, editor of
Myers' Finance & Energy, notes that global gold production
has finally topped out after two decades of relentless
expansion.
"According to the World Gold Council," Myers reports, "gold
mine production in 2004 totaled 79.7 million ounces. That
was down from was 83.3 million ounces in 2002 and 2003. It
is true that world mine production doubled between the
early 1980s and early 1990s. Yet since 1997 mine production
has stalled at around 80 million ounces per year."
Myers suspects the constrained supply of newly mined gold
will support of the gold price, especially in light of the
fact that the unrestrained supply of newly minted dollar
bills pouring out of the U.S. Treasury.
"Alongside the stagnation in world gold production," says
Myers, "is another important fact: M1 money supply has
grown by a whopping 30 percent since 2001." In other words,
the kind of money produced by printing presses continues to
proliferate rapidly, while the type of money extracted
painstakingly from the earth's crust proliferates very
slowly. At the margin, the relatively precious item should
appreciate against the relatively common item.
Our advice: Don't count out the underdogs.
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und etliche neue aktien vorgestellt, bzw.besprochen.