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Ian R. Campbell  -  Mar 21 09:09 AM 66 Posts 1 Follower 0 Following

Gold reacted in the first few days following the Japanese earthquake in a manner I think inconsistent with it being viewed as a 'safe haven holding'.  In last Tuesday's e-mail in a commentary that suggested the gold price then dropped because people were 'fleeing to safer U.S. Treasuries' I said that "I for one can't see how U.S. Treasuries are a better (read 'safer') place to be than physical gold, unless one is fully invested in the markets and isn't holding any cash - cash being a better 'medium of exchange' than physical gold".  Since then, I have been reflecting on the large number of commentaries that are continuously being made by 'gold experts' - both before and after the Japanese events beginning last Friday.


One of the things that I have concluded is that if you own physical gold and read what 'gold commentators' have to say in the context of that physical gold ownership, it is extremely important that you contemplate what underlying assumption(s) they are making with respect to equity and money market stability when predicting 'gold will go to X$' or 'gold will fall to X$.  On Saturday an article titled 'Top Gold Experts: Buy and Hold the Precious Metal' - reading time 6 minutes - reported on discussions with what it refers to as "some of the smartest, most accomplished investors in the gold industry".  The six people who express opinions in the article are (1) Rick Rule, a regular investment conference speaker, (2) James Turk,, (3) John Hathaway, portfolio manager Tocqueville Gold Fund, (4) Adrian Ash,, (5) Ian McAvity, Deliberations on World Markets newsletter, and (6) Ross Norman,


I suggest this article is a 'must read' for anyone holding, or contemplating holding, physical gold or silver (silver also is discussed).  I think the commentators make many excellent points that are well worth thinking about.  It will come as no surprise that all six currently are bullish on gold and make price predictions - some with more reluctance than others in the telling.  Basically, I see the article as a partial primer on where the gold price is, why it got to where it is, and where it is likely going and why.  Where shares in gold mining companies might go price-wise also is discussed, and it is here that two of the six experts focus to some degree on what is likely to happen if we face broad market declines going forward.


I think you should read the article and think hard about the views of these six experts in the context of the assumptions they make, stated or unstated, about the stability and state of the overall equity and money markets when making their physical gold prognostications.  I also suggest you continue to look for and question those same underlying equity and money market assumptions as you continue to read articles and commentaries on physical gold, physical silver, and gold and silver exploration and producer companies.

Topics:   Gold, equity markets, money markets, Silver, Physical Gold, physical silver, Exploration Companies, Producing Companies
Disclosure of Relationships with the Company(ies) referenced in this Post:
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