Cyclical analyst, forecaster and investor Larry Edelson, of Uncommon Wisdom Daily, shares some thoughts on gold, the US Dollar, the Dow Jones and the recession. (Edelson’s Video Blog is below the excerpts and comments)
I still skeptical of this gold rally. It is not, in my opinion, the big one. We could see a new record high in gold, even up to about $1037 – $1040, but I do not believe, based on all of my cyclical studies and technical indicators, that this is the runaway bull market phaseÂ in gold where you’re going to see $1200, $1300, $1500 gold and higher. That, no doubt, will be coming. But, we’re about a year away from that in my opinion.
It’s far more likely that gold will either top out here or suck everybody in by making a new high around $1040 – $1050. And as tempting as it is to jump on board this gold rally very aggressively I think it would be a mistake. It’s far more likely that gold will top out here, then pull back sharply to shake out all the weak longs and the weak Johnny Come Lately buyers. And then, next year, begin the real leg up in gold.
My Comments: I tend to agree with Mr. Edelson for the near-term.Â The dollar is not dead yet. In my view it can just as easily turn to the upside as it did in late 2008. This would be bad for gold and equities markets. I don’t believe that a completeÂ decoupling between gold and the stock markets has occurredÂ yet and this may be the final time that the Dow Jones and Gold will move together. After this next collapse, if it happens, we should begin to see gold decouple from broader stock markets as investors start losing confidence in the public sector’s ability to manage this crisis.
Watch Larry Edelson’s Video Blog: