Gold prices have tumbled 16% since last summer and, more recently, suffered a "death cross" leading many investors to question whether or not gold's bubble has popped.
If you're not familiar with the term, a death cross is what it's called when the 50-day moving average of the price of a traded instrument - in this case gold - crosses the 200-day moving average from above.
I disagree.
I think that the 16% drop since last September is simply based on a corresponding decrease in speculative interest at a time when the dollar has become the best looking horse in the glue factory.
Traders are simply moving currencies as the euro comes apart.
This isn't hard to understand when you consider that the dollar and gold have an inverse relationship. If one rises, the other traditionally falls.
I don't expect that to last much longer.
In fact, I see gold rocketing out of the basement after it consolidates, having broken $1500. By then, the euro may well have achieved parity with the dollar, leading central bankers to print money on a scale that we can't imagine today.
When that happens, traders will no longer be as concerned with the relative shift in currencies as they will be with protecting the wealth those currencies supposedly represented.
Here's the key takeaway: Don't view gold as a speculative play - that's the mistake many traders are making right now - but, rather as a hedge against the wealth destruction additional bailouts will bring.
Take advantage of the relative lull in gold prices now to make sure your holdings "add up." The ideal relationship is 10:1 with your bonds, meaning that for every $10 you have invested in bonds, make sure you've got $1 invested in gold.
I suggest some gold-related investments for my subscribers, but depending on your preference for hard assets, you may prefer bullion, jewelry, or even mint certificates.
And looking at the big picture here, things are just getting started...
Once you see Keith's "secret weapon," you'll understand why. To learn more about the Geiger Index click here.]
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About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.