By Darryl Kelley
MidasLetter.com
Tuesday, April 7th, 2009
Given the false hope inspired by the conclusion of the G20 summit in London last week, and its associated residual ‘positive sentiment’ effect on global equity markets, now is a good time to accumulate gold and related asset classes. That’s because the price has suffered exactly the kind of steep correction that over the last 8 years have typically preceded a fresh assault on new highs.
And there are other telltale signs that gold is about to take a Great Leap Forward.
Foremost amongst them is the fact that the AMEX HUI Goldbugs Index is foreshadowing a jump with its habit presaging enhanced interest in gold with a sharp drop followed by a sharp rise. (The rise part of the equation has yet to form).
Secondly, the engineered ‘positive sentiment’ by U.S. media and financial elements has now served its purpose, which is to lend a mantle of credibility to the G20 process by allowing participants and leaders to point to robust markets as proof that their collective actions embodied in 15 pages of summary were in fact successful.
Third, there is the deluge of corporate earnings to be unleashed pre and post Easter weekend, which are almost uniformly awful. S&P 500 companies are expected on average to decline 37 percent, the eighth straight quarter of double digit losses in quarterly earnings.
And finally, analysts (to use the term loosely) have seemed to arrive at the unanimous conclusion that the IMF’s planned sales of gold to raise $50 billion will have no meaningful impact on the gold market. Maybe that’s because, as GATA will tell you, they don’t have it.
SOURCE: http://www.midasletter.com/news/09040703_Now-is-the-Time-to-But-Gold.php