Sean Goldsmith, of S&A Digest writes A big buying opportunity in gold could be coming:
Economist David Rosenberg says we’re in a secular bull market for gold. He says central bank purchases, led by China, will eventually push gold to $2,600. Like Jim Rogers, though, Rosenberg thinks the short dollar/long gold trade is crowded. He expects a short-term correction in gold of as much as 20%. That would bring gold near its 200-day moving average of $970 without violating the trend line.
Making a gold correction even more likely, Rosenberg’s biggest gold catalyst, China, already said it won’t recklessly chase prices up…
“We must keep in mind the long-term effects when considering what to use as our reserves,” said Hu Xiaolian, the vice-governor of the central bank. “We must watch out for bubbles forming on certain assets and be careful in those areas.”
With China’s $2.3 trillion in reserves, it’s difficult to buy gold without moving the market. Expect China to buy on the dips, creating a floor for the metal.
For those out there who haven’t had a chance to fill their safe deposits or stock portfolios with gold assets, another opportunity may be coming. In consumerism circles they might refer to this as a Last Chance Sale.
The question most concerning to me with respect to my holding Â physical gold is: at what point does Government ban the ownership of same? Anything that challenges their authority or control will be scrutinized and potentially suppressed. This suggests to me that perhaps an ‘all-in’ strategy should not be pursued.
Tom, your concerns are certainly valid. At least in the depression FDR paid the same price for gold as when you had purchased it. Of course, then he devalued the dollar by, what, 60% so you got screwed on the paper.
I am not sure if they would outlaw “holding” or “hoarding” gold, but one commentor here has written, on several occasions, that they don’t really have to seize the gold as was done before. All they would have to do is outlaw trading in gold, or simply adding a 99% tax on gains and bam, mission accomplished. They could do this with bullion as well as gold mining stocks. So, I do agree that the ‘all-in’ strategy could turn against someone who puts all of their capital into gold. When the government is broke, they will take whatever steps are necessary to accumulate wealth.
On another note, I think China’s opening up of gold/silver sales to the general population is a setup. It’s a way for China to buy tons of gold off the radar, and when/if the time comes, they will seize it from their people like they did during the 30’s here. Could be dangerous for the government though, as there very well may be 100 million angry Chinamen ready to revolt if something like that were to happen. But the possibility is there.