As some people might already know, for more than 2 years, I've spoken about why I invested 8% of my money into Gold and Silver, as a possible "insurance" (hedge) against Global Uncertainties. As some might also know, I have some investments denominated in US$. Thus, how do I mitigate the risks of a possible devaluation of the dollar? By having some money into Gold and Silver.
My average cost of Gold is US$790. On Friday 29 May 2009, Gold closed US$979.50 or 24% up. My average cost for Silver is US$14. On 29 May 2009, closing price for Silver was US$15.79 or 12.8% up.
In the next year or so, Gold prices might rise beyond US$1,200, while Silver might rise beyond US$20...
Below is some latest analysis on Gold prices and US$ for your easy reference.
One possible scenario that might occur in the next few years is "Stagflation". ie. the global economy bottomed, but just remain stagnant. However, because of the huge "printing of money" by governments all over the world to "save the economy", it resulted in sharp rise in inflation, thus resulting in a Stagflation. In a Stagflation scenario, prices of "real goods" including Gold and Silver, Real Estate, Land, French Fine Wine and other commodities will rise like crazy, which is why I have invested into some of these assets already. On the other hand, stocks typically do very badly in a stagflation because business volume remain low while costs increases, resulting in fall in corporate profits and thus low stock prices. Have you similarly positioned yourself for the possibility of a "stagflation"?
Because I diversify my money into different assets, such as Gold and Silver, UK Traded Endowment, French Fine Wine and Land Investments and also stocks and unit trust, since the Global Financial Crisis started in late 2007, my wealth has not decreased, but have actually gone up by about 10% on an overall basis. I'll be teaching and sharing on how I invest in the Full-Day Seminar "How to Save and Accumulate One Million Dollars", the next session is on 27 Jun 2009 (Sat). For more details, please visit http://www.MasterYourFinance.com a Financial Education Portal I set up to contribute towards Public Financial Education.
Dennis Ng, http://www.HousingLoanSG.com
Bespoke: Gold breaks downtrend and dollar breaks down “Gold is up another $12.40 today to $939/ounce. Ever since the metal hit support at its 200-day moving average in April, gold has been rallying nicely. And based on technicals, gold has quite a bit of room to run on the upside before it starts to hit resistance again. As shown below, when the metal broke its multi-month downtrend at the start of May, it turned the technicals from negative to positive.
“Gold’s gain has coincided with the dollar’s demise. The dollar tried to mount a comeback after taking a big hit in March, but it didn’t get close to a retest of its 52-week highs. Once it tested and failed at support levels a couple of weeks ago, the trend turned from neutral to negative. The next area of support for the dollar doesn’t come into play until it gets down to its December lows. For now, investors should play the stocks with high international revenues as a play on the decreasing dollar.”
Source: Bespoke, May 20, 2009.