Gold: Gartman @ Bloomberg, Zeal LLC on HUI, DSP-ML World Gold Fund
- Via The Mess That Greenspan Made: Gartman: Short stocks, long gold
I’ve been bullish on gold for some period of time simply because of reserve adjustments by the Central Bank of China and the Central Bank of India, Thailand, and Malaysia, all of whom are running large trade surpluses. They find themselves with rather more reserves of euros and dollars than they would like and rather fewer reserves of gold than those held by the central banks of the industrialized world, so they’re going to be moving in that direction.
Here’s the Bloomberg audio.
- Zeal LLC: What the HUI?!?
. . . the 14% HUI (Gold Bugs Index) loss over about 8 trading hours really belies the real carnage underneath the surface. Excellent gold and silver juniors with outstanding fundamentals were trapped in a sickening freefall. Some plummeted on the order of 20% per day at worst during the HUI mini-panic of mid-August 2007.
The only times that the HUI strongly outperforms gold are during the HUI’s massive uplegs. While these PM-stock uplegs are driven by underlying uplegs in gold, sooner or later greed grows too excessive in the HUI so it tops. Then it starts consolidating sideways to bleed off greed and get the markets comfortable with a new foundational base at higher HUI prices. Gold always exhibits relative strength during these periods of time, retreating a lot less than its miners do.
Indian investors can now invest in gold mining companies via the DSP Merrill Lynch World Gold Fund. Business Standard offers more analysis here.
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