As a I write this, the price of gold is $1502.90 and up another $8.20 this morning. Keep in mind that's in U.S. dollars. $1502 U.S. is equivalent to $1430 Canadian dollars.
This is why Canadian gold stocks haven't followed through with this recent surge in the price of gold. The further our dollar climbs against the U.S.$, the less our mines will receive for each ounce mined.
Add to this, increasing energy and oil costs and profits will not be a rosey as some are led to believe.
If gold were to correct here, and the Canadian dollar continue climbing, there will be downward pressure on all precious metal stocks. Caution is warranted.
Your portfolio should include a basket of precious mining stocks, but for protection against runaway inflation and erosion of currencies, you should also hold physical bullion.
At some point, U.S. stocks will be more attractive to hold than the paper currency, because the stocks/indexes will also reflect massive inflation. In other words, because of the erosion of your purchasing power by holding the U.S. dollar, the stock themselves will skyrocket and be a place of shelter.
Anyway, let's see what happens today now that gold as broken through a major point of resistance. If this continues, the stocks should follow and start a new leg upwards.
Good luck!
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