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GOLD THOUGHTS - Are Funds and Traders Pushing Gold to an Unsustainable Level in the Short-term?

Commodities / Gold & Silver Nov 06, 2007 - 06:31 PM GMT

By: Ned_W_Schmidt

Commodities

Dear Chairman Bernanke,

I, and all the rest of the Gold Bugs, would like to thank you for your continuing effort to bail out the banks. Your easing of U.S. interest rates has greatly benefited the value of our Gold holdings. At the same time, the purchasing power of paper dollars held by gullible consumers around the world is being decimated.


Something with which those consumers will have to learn to live. If they had bought Gold instead of a house, they could afford $100 oil. Keep up the good work! However, we did have a question. Would not simply mailing checks to the banks be more efficient?

Thanks, A Gold Bug

 

As this week's chart portrays, Gold has provided a far higher return than U.S. paper equities. Am really starting to feel some sorrow for those that have been duped by Street and business media into keeping their wealth mired in paper equities.

Imagine how much purchasing power has been lost by wealth and retirement funds of Americans by failure of equities to perform and Federal Reserve's devaluation of dollar, and devaluation it is.

With the Federal Reserve intentionally devaluing the U.S. dollar, long-term prospect for Gold continues bright. $1,400+ Gold is no longer a wacky forecast, and may prove to be conservative.

However, $97 oil, DJIA up 120, Gold up $17, S&P up 18 do suggest money chasing markets rather than any rational investment process. Are funds and traders pushing Gold to an unsustainable level in the short-term? Holding your Gold, counting your profits, and waiting for a better time to buy are all recommended activities.

By Ned W Schmidt CFA, CEBS

Copyright © 2007 Ned W. Schmidt - All Rights Reserved

GOLD THOUGHTS are from Ned W. Schmidt,CFA,CEBS, publisher of The Value View Gold Report , monthly, and Trading Thoughts , weekly. For a subscription go to http://home.att.net/~nwschmidt/Order_Gold_EMonthlyTT.html

Ned will be exploring the Gold Super Cycle at The Wealth Expo in NYC, 19-21 October. For information go to www.wealthexpo.net

Ned W Schmidt Archive

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