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-- Posted Wednesday, 15 September 2010 | Digg This Article | | Source: GoldSeek.com
Gold hit a fresh record high in overnight trading, passing the $1,270 mark for the first time in history. Even mad bad Jim Cramer is now a raging gold bull. Should that not stop anybody and make them think? Is Cramer not the archetypal voice of populism that always gets it wrong? Buys on the highs, sells on the lows? It is certainly usually the case that an all-time high is a good point for long term holders – who had the wisdom to buy years ago – to cash out. Longer term hold ArabianMoney is still a long term holder of gold and silver but we wonder about the next few weeks or couple of months. Is the global stock market rally not teetering on the brink of a rollover and a return to the performance seen in the worst August in 10 years? It is impossible to say but the same quibble that we apply to gold also applies to stocks. Does it make much sense to chase this rally any higher? Are those higher yields in stocks a safe bet or an illusion based on a false reading of the future profit outlook? Whatever you think of the US economy nobody is arguing that it is going up like an express train. The only question is whether the slow train might speed up a little or go even slower for a long time. Business in such an environment becomes a cut throat fight for sales and that means lower profits even for the survivors, until the business cycle finally turns up again. US economy bad The reality of the US economic leading indicators is strongly negative (see this article), something the stock market bulls have managed to keep off the market agenda for the past two weeks. But reality has a habit of breaking up even the wildest parties. How would gold and silver behave in a big market sell-off? We cannot be sure. The August experience was positive, with stocks down and gold and silver sharply up. But a really big stock market correction, or second leg of the crash of 2008 would probably be a different story. The height of that market correction might be the last black day for gold and silver prices before the big lift-off in the rebound phase, and the last great opportunity to buy. Yet this last correction in precious metal prices is probably not going to copy 2008, the leverage is just no longer in the gold and silver market to the same extent. But it would most likely still be significant for in a stock market crash somebody always needs to sell gold to raise cash to meet margin calls. Gold has a much brighter long term future. The editor of this article is the author of ‘Dubai Sabbatical: The Road to $5,000 Gold’ and still sticks to that ultimate conclusion.
-- Posted Wednesday, 15 September 2010 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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One More Black Day for Gold and Silver before the Big Lift-Off?
