At my recent talks on “How To Invest In The Coming Bear Market” at the Borders Bookstore in Roseville, CA, I’ve been advising people to reduce their exposure to stocks and to buy gold.
The last couple days have provided excellent opportunities to implement this strategy. Yesterday was a great day to lighten up on stocks – today is as well. And today is a great day to buy gold.
Gold is off almost $60 an ounce, 6%, to around $950. The reason is that the Fed paid some lip service to inflation yesterday and “only” cut the fed funds rate by 75 basis points.
On top of that, gold has been on a ferocious run and so many are surely taking this as a cue to take profits.
But, as I’ve been saying, the fundamentals are still in place for gold to move higher with interest rates likely to come down around the world. Sentiment is still mixed towards gold as well, with many having been burned by it in the early 1980s and skeptical of the current move.
I’ll re-iterate my forecast: $2000 gold within 5 years.
Disclosure: Top Gun is long gold in various ways including the Gold ETF (GLD).
UPDATE (Wed 3/19, 10:00am PST): This is also a good day to sell treasuries. Treasuries have rallied over the last few weeks with the 10 year approaching its lows of Jan 22-23 around 3.30%.
So: sell stocks and treasuries and buy gold. Today’s a good day to do it.