an improvement, page-33

I just got back on my weekend trip to Singapore, had a blast catching up with my army mates! But, now let’s get back to making money!! SBM time will shine eventually in my opinion on the basis of higher gold prices and potential cost efficiencies drives by management and on the basis of gold being in limited supply relative to demand. In my view, SBM have got to be a more long term strategic hold in your Gold portfolio.

On top of the major drivers of gold i.e. mine production, central-bank sales, jewellery and investment demand. The article below points out to another aspect of what could be driving Gold Prices: The USD. And perhaps on the sidelines, just to think about it, maybe one day in the future we will have a one world currency; being in some shape or form supported by Gold to a certain extent? Just thoughts!!!

All the best to all holders!


LM

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Some paragraphs from an interesting article to read:

http://www.thebull.com.au/articles_detail.php?id=5228

Large foreign investors see this monumental surge in dollar supply and they worry about the dollar’s purchasing power. They want to pare back their still-massively-overweight holdings in US dollars and US Treasuries. So dollar investment demand is falling at the same time dollar supply is exploding. With less demand bidding on far more supply, it’s inevitable the US dollar bear is going a lot lower. So odds are the USDX won’t stop for long in its pre-panic trend, but grind even lower.

And if gold’s behavior relative to the USDX since last summer is any indication, further dollar weakness will be very bullish for gold. Despite the bearish sentiment plaguing this metal, it will probably break decisively above the psychologically-important $1000 level soon. Gold traders may have got the short end of the stick in the panic, but our gains coming out of it should ultimately make the inconvenience of last autumn look trivial.

The bottom line is the US stock markets have become a major driver of gold over the past year. And this is not the traditional inverse secular relationship, but a positively-correlated tactical one. Intense fear in stocks led to flight capital flooding into the US dollar. The resulting sharp dollar rally hammered gold, causing it to plunge with stocks. And as recovering stocks led to dollar selling, gold rallied with the SPX.

While this peculiar relationship will fade as the stock markets recover from the panic, it still exists today. And with the US dollar likely to at least fall back to its pre-panic levels, this is very bullish for gold over the coming months. Further dollar weakness should help drive gold decisively over $1000 soon for the first time ever. This is exceedingly bullish for the still tiny and overlooked precious-metals-stock sector.