Gold and Gold Stocks Still in Uptrend Relative to S&P

Deliberations on World Markets (12/10/2008)

The October lows on gold mining stocks held when the S&P 500 made lower lows in November. . .that’s encouraging.

The last 13 weeks captured the bulk of the deflationary crash in so many areas. . .the S&P was down 29%, the CRB Commodity Index was down 43%, but gold was only down 7%. Gold did its job, preserving purchasing power better than most alternatives in a deflationary crash. The inflationary seeds now being planted by all the bailout measures should make the other side of the valley very robust for gold and its miners once it gets here.

I’m getting more bullish on gold, gold miners and even silver in anticipation that the recent Dollar rebound may be mostly done on the upside, and I suspect the precious metals arena will be a leader in recognizing the hyperinflationary risks that will stem from everything Washington is doing to fight the deflationary wave.

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