By Michael Lombardi, MBA for Profit Confidential
Is gold bullion becoming the commodity the mainstream media and analysts love to hate?
After all, views of the metal are becoming increasingly bearish. But I believe the most important factor as to why gold bullion
is actually attractive at this point is being ignored; gold bullion
becomes more valuable as the paper money created by central banks
increases in circulation.
How negative have investors become on
gold bullion? Since October 2012, hedge funds have cut their holdings of
gold bullion by 56%. (Source: Bloomberg, February 15, 2013.) Hence, you
can see why some are calling the recent price decline in gold bullion
prices the end of the bull market in the metal.
Here’s a long-term chart of gold bullion
prices. I see a sideways pattern developing, but I don’t see a bust of
the bull market that started 12 years ago in gold bullion.
Chart courtesy of http://www.StockCharts.com
As my loyal readers know, I’m still
bullish on gold bullion. My main reason for staying bullish is very
simple; so long as the central banks continue to devalue their
currencies, I believe the precious metal will shine.
And right now, wherever I look, I see
central banks looking to “fight” their strengthening currencies by
outright devaluing them. Their attitude of “do whatever it takes to get
our exports going” is going to create trouble in the future.
The Federal Reserve alone has printed
trillions of dollars to improve the economy. And unfortunately, other
central banks are taking the exact same actions—not just major central
banks, but the smaller ones too, like the Philippine, Taiwan, Indonesia,
South Korea, Colombia, Peru, Costa Rica, and Brazil central banks.
Dear reader, what holds true is that the
list of central banks committing to print more money is increasing, and
those that were already printing are promising to print more. For
example, the central bank of Switzerland, is working hard … Read More
In: Other News
Tags: gold bullion, housing market, gold, central banks, bull market, Federal Reserve, home prices, U.S. economy
Location: Kleinburg, Ontario, Canada (load item map)
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