$5.70 
$-0.02 
EDITOR'S NOTE:
The following is a short excerpt from this week's issue of my invesment newsletter Secret Stock Files. I wanted to share this with you because it's important information for all gold investors.
Enjoy,
Luke
It's a Tough Market out there for Gold...or is it?
The ongoing gold market correction continued this week. Futures for May delivery fell to levels below US $880 an ounce during in overnight trading last night, a 14.6% decrease from gold's record high price of US $1,034.30 set on March 17th. Gold's decline comes as the US dollar regained a small bit of ground after reports on German and French business confidence showed weakness. Take a look at gold's market correction in the metal's price chart below:
The US dollar is also beginning to act in anticipation of next week's Fed rate decision, which will be reported next Wednesday, the 30th. There is some speculation that the Fed will end its interest rate easing cycle and turn to fighting inflation, consequently decreasing gold's investment appeal as a hedge and boosting the greenback.
Right now, it's anyone's guess as to what the Fed will actually do. The Federal Reserve is a tricky animal to pin down. It's unpredictable, and reactive. But either way, Fed cut or no Fed cut next week, gold is still in a good position in terms of inflation fundamentals.
You see, the Federal Reserve has cut its key federal funds rate from 5.25% back in September to 2.25% today. And at its current level, the overnight lending rate is below the annual rate of consumer inflation, and we have negative real interest rates, which still gives us an incentive to buy gold rather than watch our US dollars practically fall right out of our pockets and lose its purchasing power.
So even without a Fed cut next week, gold will still be an attractive investment. I'm confident, however, that if the Fed does in fact decide to hold interest rates, gold will fall further as a knee-jerk reaction from the market. I believe that this will be the beginning of a significant buying opportunity window for both physical bullion and gold-related equities.
Consider this about the Gold Market Correction...
As the gold price chart below displays, in the past 24 months alone we've had three significant pullbacks in gold prices and a six month stretch of sideways trading. And yet gold is still up over 65%!
Since the beginning of this bull market, gold prices have increased as much as 281.5%, and is still not even worth half of its all-time inflation-adjusted high of ~ US $2,500.
So even if we see a continuing correction in gold—that could even drive prices below $800 an ounce—think long-term, and use a pullback to establish new or buy back into some of your already sold positions.
It might seem like a tough market out there for a least the next few weeks, but know that gold fundamentals are still solid. So don't bail out yet. I believe the best is yet to come. Gold is still very bullish for the long-term and any pullback in bullion prices and gold-related stocks will be only temporary.
END NOTE:
This week's issue of Secret Stock Files went on to name several specific gold-relatied stocks that I believe are the best bets on the market right now. But that information is, of course, reserved for paying subscribers.
However, I would like to invite you today to join the club as subscriber to Secret Stock Files. Registering is easy and quick. And once you become a member, you'll get weekly issues of Secret Stock Files sent to your inbox with hand-selected new company recommendations and portfolio updates. Just click here to learn more.
Until next time,
Luke Burgess
www.GoldWorld.com
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