Bud Conrad believes that Gold can reach heights others do not even imagine. He lays out his case in a lengthy analysis for those interested.
In Mr. Conrad’s opinion, the case rests on the following:
… until there are fundamental changes in government fiscal and monetary policies – and a recognition that the sovereign debt is unpayable and therefore needs to be restructured – there is no reason to fear gold pullbacks and every reason to expect even more positive returns in the gold mining stocks that are still catching up to the rapid gold rise.
Even higher prices than mentioned here are possible from the flight to safety out of the euro, the seasonal rise into the new year, and the accelerating action of gold from a shift in sentiment of the investment public to a relatively small market. Gold is by far the best “answer,” and now is still the best time to invest.
For many of the reasons outlined by Mr. Conrad I look for gold to be a reasonable place to put a portion of one’s portfolio. It is attractive if for no other reason than it appears safe. No other asset class does.
In my opinion, gold will reward in the long term. In what may be near-term panic markets, gold may sell off with financial assets. Investors may get caught in margin spirals where they have to sell what they can rather than what they want.
During the last couple of weeks stocks and gold have sold off together. In my opinion, this represents a few factors:
- Margin squeezes
- Latecomers to gold getting scared out
- Panic selling
- Rush to liquidity
The same negative performance for gold (on a larger scale) occurred in 2008 – 2009 when the stock market declined and gold went with it. The coming decline may be bigger for stocks when markets fully realize there is no way out of the financial hole that governments have dug.
The stock market sell-off presents both risk and opportunity for gold. Thus far, gold and stocks have moved together in a downward direction. That is unlikely to continue much longer.
At some point, fiat currencies will be viewed as being in a Voltairian cycle (on their way to their intrinsic value — zero). Then, gold will become the true save haven as it will be the only asset left standing.
I am looking for gold to diverge from stocks soon. Yesterday, as an example, gold was up and stocks were down for the first time in a while. Today, at least pre-market, it appears both are headed down again. Until a divergence trend becomes apparent, I have lightened up on gold. Once that relationship returns, I shall become more aggressive.
This is not investment advice, merely how I react to these markets. Consult your financial adviser rather than reacting to internet noise.
HappyinHowell: 
Mr Misno: 
Marsha: 
Brian Wilson: 
Steve: 
Larry Crouse: 
Brian Wilson: 
Monty Pelerin: 
Bob Snyder: 
Syrin: 
Hi Monty, it seems to me that in at least the short term Gold will drop as Europeans plow their money into the US Dollar. Is it a stretch to say that 95 percent of the world’s population is clueless about the world’s (or at least the West’s) financial situation? That most people believe all of the BS that they hear from the MSM and even most talking heads from conservative outlets? That the United States at worst will go through a few years of Japan like stagnation but eventually recover? Or worse, that recovery is now only a year or two off and that Europe…well that’s on the other side of the world and has nothing to do with us, after all we’re America. I haven’t read the article “Is Gold still the answer for investors” yet, I’ll do that after I finish this, but most people just simply aren’t the junkies we are that read all of this stuff and precious metals are the furthest thing from their minds.
I believe when the SHTF, it will be sudden and catastropic, taking the 95 by surprise and only a few will have even begun to prepare. Rapid stratospheric rise in precious metals may not occur until the threat is clearly understood but then too late. I’m only a middle class guy and if I had the money I’d probably construct a massive underground bunker complex with enough stuff to support a couple dozen friends and families, but I’m not. all I can do is store up maybe a year or two worth of food, plenty of guns and ammo and some precious metals to have when the maelstrom passes. Good luck.