I am not a gold bug or an end of the world fanatic… but in all seriousness…Can Gold be the next currency? Honestly…As an investor, I became very concerned about having my assets denominated in U.S. dollars. Even if I was clever enough to denominate my assets in other currencies…the fact is they are all paper not truly backed by anything. However as a commodity trading advisor I believe anything can happen and that means gold can fall in value as well.

Gold has experienced an unprecedented run. One can look at the lows of the beginning of the decade and Gold has out performed. At one point, for example, it sprinted from $1,050 to $1,218 in under 30 days flat only to fall back down.

As much as I try not to have an opinion…there are many smart people touting gold as the next ” real ” currency. David Einhorn is a big believer as well as John Paulson. Both of them were dead on target on the subprime blowup when most did not see it coming. Paulson became a Billionaire from that trade. Now he is betting approx 40% of his fund on everything gold. There are other smart people that did not see the subprime blowup such as Warren Buffet and Bill Gates. The Subprime crisis & Recession of 2008 and 2009 was not kind to either of them, erasing approx $17 billion of their combined net worth.

Will Gold be the trade of a lifetime?

Some argue that gold is a bubble…and a terrible asset to hold in ones portfolio. The fact is from the lows ( depending on exactly when you look) gold compounded at 6.5%. That surely not a bubble. The recent pull back was expected as gold made front page news.

Time will tell..I prefer not to predict ( actually never)…and simply follow my methodology. If Gold goes to whatever price I am sure I will catch it as a trend follower. Maybe gold will go down. maybe Sugar will go through the roof..No one knows the future… however…if gold does become the next real currency…Trend followers and commodity trading advisors should do very well..

Andrew Abraham
www.myinvestorsplace.com

Andrew Abraham has been in the financial arena since 1990. He is a commodity trading advisor and co manager of a Commodity Pool. Since 1993 Andrew has been a proponent of quantitative mechanical trading programs. Andrew's major concern is not only total return on investment but rather the amount of risk that one would have to tolerate in order to achieve returns He focuses on developing quant models that encompass strict risk adherence and correlation. He has been a speaker at conferences as well as an author of numerous articles. Andrew has spent years researching ideas that have the potential to outperform indices as well as maintain fewer draw downs.

Visit Angus Jackson Partners (http://www.angusjacksonpartners.com) Contact: A.Abraham@AngusJackson.com (mailto:A.Abraham@AngusJackson.com)

© 2009 Copyright Andrew Abraham - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.