With gold trading Thursday (August 18) at close to $1835/oz, many are asking if gold is in a bubble. While gold may be expensive relative to its price last year, how does it compare with that of the S&P 500 -and, as such, how much higher might we expect gold to go]? Words: 346
“Gold bugs” routinely solicit my prediction regarding the future gold price, assuming I must be an “educated” gold bug since my hedge fund happens to maintain large gold exposure… [but such an answer] depends on variables [such as] what time period? Next week? Month? Year? Ten years? [and] compared to what? U.S. dollars? Euros? Real estate? Gummi bears! [Let me explain.] Words: 955
Sadly, the great American public doesn’t understand what is happening…[and that it will be] on a greater scale than has ever occurred before in the history of mankind. It’s going to hit the current generation of Americans like a whirlwind. It will be historic in its intensity and destructiveness. [Here is an attempt to enlighten them.] Words: 939
The Dow:Gold ratio is defined as the ratio of the price of the Dow Jones Industrial Average divided by the price of gold [or] how many ounces of gold it takes to buy the 30-stock Dow. The current Dow:Gold ratio of 8.5 is up 21.1% from its 17-year March 6, 2009 low of 7.0 and 81% below its 1999 peak of 44.77. [What does the future hold? Higher gold prices, lower stock prices or vice versa?] Words: 400
From a historical standpoint, the dividend yield of 2% on the S&P 500 is too low. It smacks of a stock market top and underscores the point that the market is too optimistic in the sense that investors are willing to forgo yield because they assume that they will get the return via the capital gain. The last time S&P yields were around this level was in the summer of 2000, and we know what happened shortly after that! Words: 888
Analysing the long-term relationships of gold with other assets suggests that, in most instances, physical gold and silver and the shares of the companies that mine those precious metals have major upside potential – to somewhere between $3,000 and $10,400 per ounce for gold, between $75 and $650 per ounce for silver and in excess of $250 per barrel for crude oil – in the years to come. Words: 1132
“History has shown us, time and again, that the greatest leverage to gold’s rising price is owning gold exploration/development junior mining stocks. Will mainstream investors eventually catch on to the fact they need to own gold and to own gold shares?” Words: 696
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