Once Again, Gold Confirms Its Uptrend

When the dot com bubble burst and stocks entered a secular bear market, gold did just the opposite and began a secular bull.

As you can see on the chart below, this bull market is doing quite well. In fact, on Monday gold broke out to a new all–time closing high of $1,278.35, thus once more confirming its uptrend.

And it’s no wonder! The fundamental background for a rising gold price is extremely supportive …

Ever-higher government debts in most parts of the world are accompanied by reckless bailout and stimulus policies. And equally reckless monetary policies are prevalent in Europe, Japan, and the U.S. What’s more, there are absolutely no signs of rethinking these catastrophic policies.

Fed Chairman Ben Bernanke has again made it clear in his speech in Jackson Hole that he is willing to continue his massive money printing. He was reiterating his willingness to use “unconventional monetary measures” to fight whatever the current financial and economic crisis might bring. And I fully trust Mr. Bernanke will hold to this promise.

Gold’s Flashing a
Technical Buy Signal

Generally speaking, new all-time highs are plainly bullish. Yet reluctance to get onboard gold is the widely held attitude …

“It has risen too much already,” is a common objection. “The price is too high,” is another.

Well, both sound like typical excuses for investors who think they’ve missed the train and are now afraid to jump on a bull market in a still unpopular asset class.

It was the same with stocks back in the early 1980s when a secular stock bull market got going …

It took the masses more than 15 years to realize that a big bull market was starring right at them. Unfortunately, many overstayed the party and bought heavily during the beginning of the secular bear in 2000 and the years thereafter.

By the time most investors decide to buy, gold’s price will likely be higher.

I see the same thing happening with gold.

Here we are in a 10-year old gold bull market, but only a very small minority of investors is participating! Just ask your friends and neighbors to find out how unpopular this bull market still is.

I’m absolutely sure that will change during the coming years. There will be a day of recognition when the masses discover how important gold is as an asset class.

Of course, prices will be much higher by then. But that’s the way it is with secular bull markets and investors.

Best wishes,

Claus

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