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"...Go on -
choose where you'll keep your profits. Then sell your gold if you
dare..."
IMAGINE YOU'D
been smart and put some cash into gold.
You didn't need to buy before the Gold Market
took off. Buying gold at the start of last month will do fine.
Six weeks on, your imaginary self now
shows a profit of 14% in terms of the Dollar. Measured in Euros you stand
some 13% higher. Versus the Canadian you're 16% up. Your return in terms of
the British Pound comes a shade under one-fifth in less than a month and a
half...
 
Too hot, too fast? You were smart in
December; now it's time to get smart again.
So you look at the charts...and you
decide to take a profit in gold.
I mean, it might all be over below $900
per ounce. The loss of confidence in central bankers could suddenly reverse
this weekend. Sentiment in the credit markets could return like sub-prime
never happened.
Oil quadrupling...grain prices at record
highs...surging demand for copper from China...all the reasons for
today's rising Gold Price might
evaporate with a few choice words from, umm, well from Ben Bernanke or Hank Paulson.
Hell, even bond prices might come down -
driving yields above the inflation rate and putting a stop to the destruction
of wealth in your mutual and pension funds.
So you choose to get out of gold. It's
time to take profits
Question: Where will you
now put your money?
Hmmm...maybe
you should switch into stocks? Yes, so the S&P now stands more than 10%
off its top of the summer. The slump took a while, too...ticking first lower
then higher, but never quite high enough to prevent a grinding loss for
investors.
Kind of sounds like the Tech Crash, but
with finance stocks leading. Things change though. Or rather, they might
do...even if Bernanke's fresh promise of cheap money
failed to stem the slide this week.
What about bonds? Sure, yields are now
below inflation. But everyone loves a regular income - the bond bull-market
proves that, especially if you count the gains in the shrinking Dollar.
Or you could hold your wealth in real
estate. Prices turn when no one expects it, remember! And no one expects Florida, California or
even London
house prices to turn higher any time soon. Least of all potential home-buyers
waiting for prices to fall further before they dare to get in.
No? Well okay...simply keep your gold
profits in cash then. You know, cash like the Dollar, or the Euro, or
Loonies, or Pounds.
Just decide first which currency you
trust to hold value. Go on - make your choice and then sell your gold.
By : Adrian Ash
Head of Research
Bullionvault.com
City
correspondent for The Daily Reckoning in London,
Adrian Ash
is head of research at www.BullionVault.com
– giving you direct access to investment gold, vaulted
in Zurich, on
$3 spreads and 0.8% dealing fees.
Current gold price, no delay | FAQ | Detailed outlook for 2007
Please
Note: This
article is to inform your thinking, not lead it. Only you can decide the best
place for your money, and any decision you make will put your money at risk.
Information or data included here may have already been overtaken by events
– and must be verified elsewhere – should you choose to act on
it.
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