Golden Bull

Content provided by Kostya Etus, CLS Investment Research Analyst

Throughout history, gold has been a widely recognized symbol of wealth. In the past, gold was mainly used for making jewelry, but it has also been used for monetary exchange. Most recently, it has been used as an investment vehicle to hedge against a depreciating currency (inflation). Gold would have made for a great investment during any historic time period, except the last 50 years, when the price of gold has fluctuated greatly. Over the last decade, gold has been on a secular bull cycle from a starting point of about $300/oz. at the beginning of 2002 and shooting up to about $1900/oz. by mid-2011. The price then wavered for about a year, not sure what it was going to do, and has been steadily dropping since October of 2012. The price is currently just below $1400. Could this be the end of the “Super Golden Bull?”

T-Bills, bonds, stocks, and housing prices have reversed to an upward trend relative to gold prices in 2013, after being in a downward trend since 2005. Gold, relative to the Dow, has fallen below its 5-year moving average for the first time since 2002. Gold in dollars, euros, pounds, francs, the yen, as well as many more currencies, has fallen, breaking an upward trend started in about 2005. But there is a silver, or should I say gold, lining. Commodity and stock secular bull markets run opposite of each other, so if the commodity bull is ending, maybe a stock bull is beginning…

 

 

 

 

 

This information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation, and the particular needs of any specific person. This material does not constitute any representation as to the suitability or appropriateness of any security, financial product or instrument. There is no guarantee that investment in any program or strategy discussed herein will be profitable or will not incur loss. Investors should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended and should understand that statements regarding future prospects may not be realized. Investors should note that security values may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not a guide to future performance.
0923-CLS-4/24/2013