GOLD SAYS, BALONEY
Gold as Contra-market (SP500) Indicator, Updated
Worldwide ETFs Portfolio
5.6 years June 28, 2002--January 25, 2008
See Comments below
Comments 1/30/2008
The Legend of Gold.
Whether it makes sense or not, for thousands of years gold has been the legendary store of value despite recent authoritative efforts to descredit it.
But its role has expanded to bestow upon its price a psychological value in addition to its economic one. Its role includes telling the World of the imminence of manmade,
far-reaching disruptions like a major war among big powers or in critical places, or contagious financial-system disruptions like the one we are in today. The fact or prospect of higher commodity and services prices also lights a fuse to the rocket of soaring gold prices.
The price rise that started in 2001 seems to be accelerating. (Is gold the next 'bubble'?)
A 'system' of buying and selling the SP-500 when Gold is in or out of the top two ranks eliminates the three losses shown, the worst of which to date is
-12% (still open). Gold gained 188% vs. 34% for stocks over the period covered. No indication of change appears imminent.
Caution. There are patches where Gold can fall along with the market. This does not diminish its ability to 'time' the market. But it does suggest that you do not chase Gold to buy your first position. See
Tips for Getting Started.
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