{"id":44679,"date":"2013-11-27T09:39:08","date_gmt":"2013-11-27T14:39:08","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=44679"},"modified":"2013-11-27T07:40:20","modified_gmt":"2013-11-27T12:40:20","slug":"weak-gold-prices-opportunity-lifetime-contrarian-investors","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/11\/27\/weak-gold-prices-opportunity-lifetime-contrarian-investors\/","title":{"rendered":"Weak Gold Prices an Opportunity of a Lifetime for Contrarian Investors?"},"content":{"rendered":"

By Michael Lombardi, MBA<\/a><\/span><\/strong><\/p>\n

Given the recent further weakness in the price of gold bullion, should investors be running for the exit doors?<\/p>\n

Some well-known \u201cgold bugs\u201d have recently turned bearish on the precious metal. But I\u2019m on the opposite side of the spectrum; I see the pullback in gold prices as an opportunity of a lifetime for contrarian investors.<\/p>\n

The gold bullion price chart below shows the long-term trend in gold bullion is still intact. Since 2001, the precious metal\u2019s price has marched higher. Note there have been many pullbacks along the way, but in all cases, gold bullion prices recovered and moved higher after their pullback. And I believe we will see gold prices recover again from their current price correction.<\/p>\n

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Chart courtesy of www.StockCharts.com<\/p>\n

From a fundamental point of view, demand for the precious metal remains robust. Many central banks have become net buyers of gold bullion over the last couple of years, and consumer buying in gold is very strong.<\/p>\n

So the question is: with so much negativity towards the precious metal, have we reached peak pessimism on gold bullion? My answer is that I believe we are slowly getting there.<\/p>\n

Just yesterday, Bloomberg ran a story saying hedge fund manager John Paulson would not be investing more of his own money in his gold fund at this time \u201cbecause it\u2019s not clear when inflation will accelerate.\u201d (Source: Bloomberg, November 25, 2013.)<\/p>\n

While investors seem to have turned very bearish on gold bullion, I see it as a bullish sign. If history has taught us one thing, it\u2019s that when there\u2019s increasing pessimism on any investment, a bottom is usually not far away.<\/p>\n

So far this year, gold prices have fallen about 30% while the S&P 500 is up about 30%. I can\u2019t see how this trend will continue in an environment where stock prices seem to be rising on nothing else but easy monetary policy. My wager is that in the years ahead, we will look back at 2013 and say, \u201cWhat a great year that was to buy gold-related investments.\u201d<\/p>\n

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This article Weak Gold Prices an Opportunity of a Lifetime for Contrarian Investors?<\/a> is original publish at Profitconfidential<\/a><\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Michael Lombardi, MBA Given the recent further weakness in the price of gold bullion, should investors be running for the exit doors? Some well-known \u201cgold bugs\u201d have recently turned bearish on the precious metal. But I\u2019m on the opposite side of the spectrum; I see the pullback in gold prices as an opportunity of … <\/p>\n

Continue reading “Weak Gold Prices an Opportunity of a Lifetime for Contrarian Investors?”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-44679","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/44679","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=44679"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/44679\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=44679"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=44679"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=44679"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}