Monday, January 2, 2012

After the Gold Rush

Last August, I posted a warning about gold bullion and Gold bullion ETFs. The chart for gold showed a steepened price curve reminiscent of a bubble market pattern ('went asymptotic"). This was when gold traded near $1900  and I suggested to take profits and to wait with buying bullion until prices stabilized around $1400.

After hitting $1400 there is a good chance that gold resumes its appreciation at a highly respectable rate of 20% per year. A rate that would make most of us salivate. Well, we're now around $1500 and not far from the aforementioned level. Stay alert.

An alternative of buying bullion is investing in a the more diversified S&P/TSX Capped Materials Index (XMA) as suggested in September. This also offers a chance to participate in agriculture and mining.

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