All the headlines proclaim it! Soaring oil is changing the world.

At the same time, many classic commodity hedges have tumbled – gold among them. Even gold ETFs have toppled. So much uncertainty about the future of the world!

the important thing is that gold investors don’t despair.

Gold may be down over 10% from its peak this week. But over the last year it has risen by over 40%. And platinum has done even better – up by 68%.

FREE Daily investment email
Sign up to recieve The Right Side here...

Privacy Policy

 

Oil is giving the markets a buffeting right now. It will keep us all jumpy. But that kind of uncertainty makes for an ideal time to hold gold!

Prospects for further rises in oil prices “should support gold prices,” she said. Add into the mix further deterioration in the US economy, renewed dollar weakness and a scattering of rumours of more Fed interest rate cuts... and she could well be right.

Gold mining shares have come down even more than gold. So we could find some bargains.

But we’re being very careful with our window shopping. Big is best, and the explorers all too often give us nothing but broken dreams…

Goldcorp, with a market cap of US$29bn, would top of any list on size.. It is down 11% from its high, but anyone buying over the last year could have doubled their money.

There’s certainly no shortage of confidence at Goldcorp. It operates nice and safely, with extremely low costs. CEO Kevin McArthur is reckons gold is headed back to four figures..

Goldcorp recently announced an 84% rise in 2008 first quarter net profits, despite a hefty drop in production. And the firm has an exciting new mine in the James Bay region of Quebec up its sleeve...

Peruvian gold miner Buenaventura has been another winner. While it’s 19% down from best levels, it is up from its low by 124%.

This year has seen a sharp drop off in forward gold sales by miners. This has boosted market confidence. Buenaventura is now totally these hedging contracts.

The company has also tidied up its balance sheet. It’s not yet up there with the majors. But neither is it a minnow. Buenaventura is currently valued at US$9.6bn.

Another bullish sign for gold comes from HSBC. The bank has just opened for business on China’s spot gold bourse. More foreign banks are expected to follow, swelling gold trading among Asia’s biggest punters.

All of which augurs well for the yellow metal. So don’t be too downhearted that oil is hogging the limelight right now. Gold, we’re confident, will have its day…

Keep trading!

Erin & Isobel

FREE Daily investment email
Sign up to recieve The Right Side here...

Privacy Policy

 

P.S. If you enjoyed this article you can find out more about our free email, The Right Side by clicking here.

• BlinkList
• Del.icio.us
• Digg
• Facebook
• Google Bookmarks
• Livejournal
• Newsvine
• Reddit
• StumbleUpon
• Yahoo! My Web