Gold Bullion - Eight Day Streak - What’s next?
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November 12th, 2009 by Prieur du Plessis, Investment Postcards from Cape Town
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I have just arrived in Geneva after an exhausting but hugely successful few days in Ljubljana, quaint capital of Slovenia. It is rather difficult to write proper posts while on the road, but I will do my best to feed interesting snippets through - that is when not investigating how the gnomes see the future of Swiss banking.
Gold hit a new peak after a drop in the US dollar to a 15-month trough, resulting in the precious metal recording an eight-day winning streak. According to Bespoke, the current run represents the seventh time since 1980 that gold has had a streak of eight or more consecutive days with a gain. The report said: “As shown below, the only time one of these streaks went for more than eight days was back in 1982 when the ninth day was also positive (on the tenth day it fell 5.7%, or $63 in today’s prices). Looking out over the next week, there has been little consistency in the results as periods of negative and positive returns have been evenly split.”
Source: Bespoke, November 11, 2009.
Meanwhile, if you are looking for an explanation for gold’s strength that goes beyond the weak dollar argument routinely offered, spend a few minutes to read Mish’s recent post entitled “Budget deficits soar out of control in Eurozone, Germany, US, UK, Japan; yen’s last hurrah“. Then consider as an investment option “something that has no budget deficit” (in Mish’s words).
Fellow-bull Adam Hewison of INO.com expects a possible consolidation or correction before gold advances further. He explains his thinking in a short technical analysis presentation you can access here. As said a few days ago, I remain bullish on gold in the medium term but, given its notorious volatility, will only do additional purchases on pullbacks.
Dr. Prieur du Plessis is an investment professional with 26 years' experience in investment research and portfolio management. More than 1,200 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns, including his blog, Investment Postcards from Cape Town. He has also published a book, Financial Basics: Investment. Prieur is Chairman and principal shareholder of South African-based Plexus Asset Management, which he founded in 1995. The group conducts investment management, investment consulting, private equity and real estate activities in South Africa and a number of foreign countries. He also serves as Honorary Consul of Slovenia for South Africa, actively developing economic, cultural and scientific relations between Slovenia and South Africa. Prieur is 54 years old and live with his wife, television producer and presenter Isabel Verwey, and two children in Cape Town, South Africa. His leisure activities include long-distance running, traveling, reading, motor-cycling and scripophily. Read more from the author/contributor here.
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Tags: Analysis Presentation, Budget Deficit, Budget Deficits, Capital Of Slovenia, Consecutive Days, Eight Days, Eurozone, Gnomes, Gold, Gold Bullion, Investment Option, Japan Yen, Medium Term, Mish, New Peak, Ninth Day, Precious Metal, Pullbacks, Seventh Time, Weak Dollar, Winning StreakPosted in Gold, Markets |
