Four immediate bull points for gold
Posted on 29 December 2008 with no comments from readers
Gold hit $884 as this post was written early on Monday 29th December, the day that Indian astrologers have down for a stock market crash. That would seem unlikely given thin holiday trading. But a further rise in the gold price, even if short-term, looks probable for four reasons:
1. Geopolitics: Israel has attacked Gaza with considerable loss of life, a reminder of the chronic political problems of the Middle East with Iran and Pakistan other possible flash points. Arabs are big investors in gold and respond to disruptions in their own backyard.
2. Physical delivery requests are mounting at the Comex futures exchange which could well result in an immediate shortage of gold at the year-end. The futures market looks about to breakdown, giving control of the gold price back to the physical market where available stocks are low.
3. Gold preserved value through the storm of 2008, and 2009 looks no better, while investors are increasingly concerned about the bubble in the bond market. In the investment cycle the next step is a bond crash and a flight to precious metals.
4. The dollar rally looks to have already broken down, so look for a swift reversal to dollar devaluation and gold appreciation. That would also boost the oil price, usually a positive for gold, and also linked to geopolitical instability in the Middle East.
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no Comments posted by readers:
Mr. Cooper, I agree with your 4 immediate Bull Points for GOLD. Well done. I might include a fifth, and that would be the collapse of the US TREASURY MARKET. This will help skyrocket the price of GOLD and SILVER. We must remember, the sea of investors heading into US TREASURIES are of the same mindset of those who flocked into US TOXIC INSTURMENTS. TOXIC INSTURMENTS that were given a TRIPLE “AAA” rating by (bought and paid for) US RATING AGENCIES.
When FOREIGNERS realize what is worse than the US DOLLAR, and that is the US TREASURIES, there will be a RUSH OUT THE DOOR and into GOLD and SILVER. At least GOLD and SILVER are a STORE of VALUE, whereas the US DOLLAR and US TREASURIES, are nothing more than BROKEN PROMISES…..those that have been broken for quite some time.
There is no way to REINFLATE the US ECONOMY as it is a PARASITIC ECONOMY which I term the “LEECH and SPEND ECONOMY”.
Lastly, there might be some FOREIGNERS who might think buying CHEAP REAL ESTATE in the UNITED STATES as a DEAL. My reply, would be…”I WOULDN’T TOUCH U.S. REAL ESTATE with a TEN FOOT POLE”. The great SUBURBAN REAL ESTATE VENTURE that the USA has invested in, in the past 50 years is coming to an end as CHEAP and ABUNDANT OIL is no longer possible. There will be no BOTTOM in REAL ESTATE MARKET in the UNITED STATES as the USA cannot afford to supply its SUBURBAN SPRAWL with the oil that it produces. Thus, it needs its cheap oil from outside sources to Survive.
It would be wise for middle east and asian countries to invest in OIL, GOLD and SILVER and out of US ASSETS. Unitl the United States learns its lesson and starts to change its economy to a PRODUCTIVE ECONOMY and not a LEECH and SPEND ECONOMY…..not a single Dime should be THROWN away in that BLACK HOLE called the United States.