Saturday, December 17, 2011

Gold Investing - Gold Down Big, Time To Bail?

I suspect, with the recent dip of spot gold's price below $1600 per ounce, you may have done some soul-searching as to your gold investments. If you have some, should you sell now to lock in some gains (or limit your losses)? If you have not yet invested, is this a good time to jump in or has the bubble truely burst?

Regarding my thoughts, I am not ready to give it up just yet. In fact, as long as the price stays above $1500, I don't give it a second thought. If it drops down to $1200 or so, then I might have to make a decision. I don't think that will happen and several very savvy investors don't think there is a reason to panic either.

Many of the so-called experts that are saying the bubble has burst did not see this 11 year bull market at all (but now they are sure it's over). You must understand that, to some, a high and rising gold price is not desireable as it is a reflection on the weakness of paper-based assets. With the present condition of many economies and their fiat currencies, thinking the bubble has burst is wishful thinking in my humble opinion. And I'm not alone...

Zerohedge posted an article on 12/14 titled Citi predicts Gold At $3400 In "The Next Two Years", Potential for Move As High As $6000. If they are even half-right, that doesn't sound like the bubble has burst to me. The article is here. John Hathaway, the seasoned manager of the Tocqueville Gold Fund, believes that gold's run is not over yet and that "This correction is well within the confines of what you can tolerate to say gold is still in a bull market." That article can be found here.

Richard Russell, The Godfather of newsletter writers, was quoted in a King World News blog titled Gold Trading Above $1,500 is Bullish Action. He believes the great bear market rally in stocks is about over and recommends GET OUT OF STOCKS. He states "gold will be the last man standing". The article is here. Two days later, in another King World News blog, Mr. Russell stated "I will Stay with Gold & Gold Stocks to the End". In this blog entry, Richard Russell makes some hard-hitting statements about America and the current state of affairs. He has lived long enough to have insights that most do not. If you want to limit your reading to "happy talk", don't read his comments. Otherwise, they can be found here.

I want to end on a happy note. Some generous donor in Pennsylvania dropped a one-ounce South African Krugerrand in a Salvation Army red kettle. This has happened before but the donor remains anonymous. I can't think of a much better place for a Krugerrand to land. The very short article is here.

Thanks for reading. If you celebrate it - Merry Christmas. If not, Happy Holidays.

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