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Gold Plunges $36. Here's My Take On It ...Larry Edelson Gold plunged another $36 yesterday. But this is not a fundamental shift, and there's been no change in the big picture of supply and demand. And the decline is still well within the parameters for a major bull market punctuated by healthy corrections. Ditto for oil and every other natural resource. All we're seeing here is hot speculative money pouring into these markets and then some of it pulling back out. In these markets, the biggest rewards are reaped by savvy investors who separate themselves from the crowd ... see through the emotional panic selling ... promptly identify unique opportunities ... and immediately take action to capitalize on them. And that is exactly what you should be doing right now with natural resources, especially gold. In a few moments, I'll tell you exactly what you should be buying. But first, let's examine three reasons why I believe gold and other natural resources are soon going to resume their trip to the moon ... Wall Street: Pundits around the globe keep saying China's latest economic measures - a stronger yuan and increased interest rates - are going to slam China's economy ... choke off demand for natural resources ... and put an end to the great bull markets we've been seeing. But as usual, the supposed gurus are simply WRONG! Sean's recent article shows you why. Moreover, Chinese officials wouldn't dare think of trying to squelch their economy! They're just taking measures to ward off overinvestment, making it more difficult for operators and speculators to overbuild. And all the while, strong investment and demand continues unabated! Of course, it's easy to see why the so-called experts don't get it they sit in their ivory towers and pontificate they rarely roll up their sleeves and get their hands dirty. But I do. Over the last five weeks I have traveled to Bangkok, Chiang Mai, Shanghai, and Guangdong. In a few days, I head to Singapore. I have walked the streets of Asia's major cities ... I've spoken with local merchants, entrepreneurs, and everyday workers. I've fought through jam-packed gold shops ... watched oil tankers pull into teeming ports ... stood on the bustling floor of the Shanghai Gold Exchange. Nowhere in my travels have I seen any indication of slowing growth. To the contrary, all the signs tell me that Asia's boom will continue for years to come. After all, there are 1.3 billion people in China rapidly embracing a Western-style industrialized society. Each year, over 30 million rural Chinese flock to major metropolitan centers, determined to improve their living standards. And that means buying lots of stuff:
As a result, we'll see a major, long-term bull market in natural resources. Worldwide Monetary Without any gold standard for the world's currency markets, central bankers can - and will - print money like there's no tomorrow to avoid or reverse economic downturns. This is a very powerful monetary force, and it will drive inflation higher! Fact: Money supply is exploding all around the world ... in Canada, Russia, India, Israel, and Egypt ... and in emerging countries like Pakistan, the Ukraine, Romania, and the Czech Republic. But the worst inflation-pumping, currency-flooding central banks of the industrialized world happen to be some of the biggest economic powerhouses:
Is it any wonder then, that even after the recent correction, overall price levels for raw materials are at their highest levels in 25 years? Make no mistake: Inflation is about to accelerate higher, and that is bullish for natural resources. Gold's Chart Action: Back in 1978, I was cutting my teeth in the gold and commodity markets as a technical trader. And to this day, I never make a move in the markets without studying the charts. Like a picture, a chart is worth a thousand words. I use charts the same way cardiologists use EKGs to gauge the market's heartbeat and its overall health. Looking at gold's chart tells me one thing: The recent decline is nothing more than a normal, healthy correction back to the major uptrend channel. And even if gold breaks slightly below, there's an entire shelf of chart support in this area.  Bottom line: Gold's chart confirms my view that we're merely seeing a healthy pullback. The long-term bull market in gold is 100% intact. So ... Consider These Core Gold Investments Gold Bullion. One convenient vehicle is 1- and 10-ounce gold ingots. For larger purchases, think about 32.15-ounce kilo bars. What about American Eagles, Canadian Maple Leafs, etc.? No, because the premium you pay for coins could cost you the equivalent of several more ounces of gold bars over time. One other piece of advice:
Pick a dependable, trustworthy dealer. Here are some dealers
I like:
Gold Funds. Consider Scudder Gold & Precious Metals (SGLDX) and Tocqueville Gold (TGLDX). See my Real
Wealth Report for additional natural resources recommendations,
along with specific timing instructions. If you're not already
a member, the current price dip in natural resources is a great
time to join! 321gold Inc |
As this rapid westernization
moves throughout the rest of Asia, there will be an unstoppable
tidal wave of three billion people, almost half the world's
population, improving their lifestyles all at the same time!
The last time the world
saw such a broad increase in money supply was 1977 to 1980. Over
that period, the rate of inflation more than doubled gold surged
nearly eightfold and interest rates in the United States zoomed
to 20%.