Rising Markets See Brighter Times

Aden Forecast (06/02/2009)
"Gold is off and running. Silver and gold shares are too, reaching almost 10-month highs. A renewed rise is underway and these markets are now poised for a potentially great rise with gold likely hitting record high territory. The C rise we've been waiting for is here!

Like we said in our weekly updates, we recommend raising your metals position to 45% of your total portfolio by buying more gold, silver, their ETFs, as well as the strongest precious metals shares.

LISTEN TO THE MARKETS

All asset movements tell us something. When the stock market rises, for instance, it tells us there are better economic times ahead. When bonds rise, it's warning us of an economic slowdown or recessionary time. When gold rises, it tells us that something isn't right. . .uncertainty, turbulent times or inflation upcoming.

We have to learn how to listen to the markets, and the combination of the markets' movements also helps. This month, for instance, the U.S. dollar and bond prices fell while gold rose. This combination spells trouble. When the dollar falls, imports into the U.S. become more expensive, which is inflationary. Interest rates rise to help the dollar, causing bond prices to fall.

Gold tends to move in the same general wave as interest rates. This was the case in the 1970s, 80s and 90s. But this changed in 2000, when gold and interest rates ceased to move together. This told us that something different was happening.

Gold tends to lead interest rates but this time around the lead time has been too long. The relationship has been distorted. Gold hit a bottom in 2001, whereas the interest rate bottom was in 2008. . .seven years later.

Interest rates are currently rising and it's just a matter of time until they continue to rise with gold.

Gold's rise is solid as it's had a consistent year on year gain since 2001. It was one of the few investments that ended 2008 with a gain and if it ends 2009 above $880, this will be the ninth consecutive yearly gain. That's impressive!"

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Under SEC rules, analysts are required to disclose their interest in securities that they cover. We strongly encourage you to contact them to understand any potential conflicts of interest they may have.

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