Gold prices firmed up yesterday on weak economic reports, a softer dollar and fund buying after a warning that gold supplies from mines will decline in 2006.
The precious metal closed up $6.90 to $561 an ounce – up 8.5 percent year-to-date.
“This year, smart investors will make more money in gold than in Google stock, as the first two months have already illustrated. With a healthy correction in precious metal prices now over, it demonstrates why precious metals are stronger than ever,” said Swiss America CEO and author Craig R. Smith.
“Gold is on a trajectory to reach $600 an ounce or more this year based on market fundamentals and current geopolitical conditions. Even when the big funds and banks sell off gold on profit taking, the gap is quickly filled with strong demand from the growing global base of smaller investors. Gold anywhere under $600 is a bargain. Commodities trump stocks as long-term bet,” Mr. Smith told WND’s Joseph Farah in a recent interview available free on CD.
Oil, gold, grains and other commodities will outperform stocks and bonds in coming years, even after the rallies that have pushed some prices to historic highs, investment adviser Puru Saxena said on Thursday.
Saxena explained: “When commodity prices start rising due to supply-and-demand imbalances, then financial assets generally tend to under-perform. Investors … need to take positions in commodities for the next 10 to 15 years.”
Meanwhile, U.S. stock losses mounted yesterday after Google Inc.’s chief financial officer reportedly warned of slowing growth at the Internet company, with a number of weak economic reports further undermining sentiment. The Dow retreated from above the 11,000 level it crossed Feb. 21.
As for the significance of a 11,000-point Dow: “The problem is that stock indexes tell investors very little about the individual stock and virtually nothing about it’s true value. Stocks in general are ‘priced for perfection’ in a world that’s far from perfect,” stated Smith.