Gold Barrels Ahead

Both the short- and long-term prospects for the
yellow metal are looking increasingly brighter.

The short-term view for gold is looking up. Oil and gas prices are recovering, the Fed has stayed its hand on interest rates once again, and a major wave of seasonal demand from India is sopping up every available ounce of gold in the physical market.

In the face of this turning tide, a number of short positions that were placed in the Western markets during gold’s recent downturn are being covered. This speculative buying is adding to the physical demand — which brings me to an important point....

Paper Versus Physical Gold

The short-term direction of the gold market is largely determined by the speculative markets, based largely in the Western, developed world. Their buying or selling appetites push gold up or down over short, limited intervals of time, and their mechanism of choice are futures and options — the “paper gold” markets.

Just the opposite is true when you look at the bigger picture, where the long-term direction of gold is being determined by powerful, fundamental, macro trends. Specifically, gold is being taken inexorably higher by an explosive growth in wealth and economic activity, as the world’s developing nations join the modern world that we take for granted.

This is not a trend that will be derailed anytime soon. And thus, while we can expect a roller-coaster ride along the way as the paper markets put the squiggles in the line, the broad trend for gold will continue to head higher for some time to come.

Everyone Pulling In The Same Direction

I’ve provided this brief background to illustrate why we have entered one of the especially profitable phases for gold.

Right now, both the physical and paper sectors are returning to the gold market simultaneously. The wedding and festival season in India...the emergence of bargain-hunting Asian buyers...a U.S. Federal Reserve board stuck on neutral and leaning toward accommodation in a slowing economy...the prospects of a harsh winter and rising oil and gas prices and more — all the pieces, in every sector, are falling into place for gold and precious metals.

Yes, the Indian buying is somewhat seasonal. But the nation is an enormous gold-demand sink, and even the base level of buying offers tremendous underpinning to gold. And we have also seen the return of the gold-trade demand, as the Christmas buying season arrives.

Add it all up, and it appears that physical demand will carry the gold price higher through the end of the year. And, if past form holds true, it will light a fire under speculative demand, which should in turn carry the market further through the first few months of next year.

In short, this is the time to buy gold and gold stocks.

If you want to take optimum advantage of this situation, I strongly recommend that you attend this year’s New Orleans Investment Conference, where dozens of the world’s top experts in precious metals and resource stocks will be giving their top picks for the coming year.

The investment intelligence delivered at this annual meeting has historically paid for the cost of attendance many times over. It is therefore one of the lowest-risk, highest-return “investments” available to you. I urge you to take advantage of it. Learn more by visiting www.neworleansconference.com.

Brien Lundin is the editor and publisher of Gold Newsletter, a publication that has ranked among the world’s leading precious metals and resource stock advisories since 1971. To learn more about Gold Newsletter, visit www.goldnewsletter.com.

Mr. Lundin is also the host of the famed New Orleans Investment Conference, the world’s oldest and most respected gold investment event. This year’s New Orleans Conference will feature Steve Forbes, Jim Rogers, Dr. Marc Faber and Dennis Gartman...plus dozens of today’s top gold and resource stock analysts...and a blockbuster debate between Doug Casey and Newt Gingrich.

To learn more, visit www.neworleansconference.com.