This is from this weeks Equidia Report....where we are heading next week......We should do all right in the Gold Rush of 2010............Richard
www.equidia.com
Dear Members,
The money is starting to pour in.
Hedge funds and institutions that once sat on the sidelines are beginning to show their strength. That's why this past Friday, the markets roared.
Not only did new economic data show that demand for American equipment is improving, two powerful hedge fund managers came out with overly optimistic comments on equities.
One of the hedge fund managers, Doug Kass, said that betting against bonds would be the "trade of the decade." Moving out of bonds will undoubtedly take money out of that asset class and shift into equities. David Tepper, the other hedge fund manager, said that equities are all but guaranteed to go higher because of the U.S. Federal Reserve's pledge this week to intervene with more stimulus if needed (
see The Double Take.)
Of course it's not just their comments that added to Friday's rally.
Recent events are making equities look very strong. The Dow once again made substantial gains this week, making it the fourth straight week in the green. To add to the rally, U.S. lawmakers will postpone a vote on whether to extend the U.S. tax cuts - a development shows a strong possibility that most of them will be extended. We also have the possibility that the Republicans - often regarded as business friendly - are going to take control of the U.S. House of Representatives after the November elections.
But more importantly for us, gold and silver once again hit new highs.
Silver reached as high as $US21.48. A few dollars may not seem like much, but this is the highest level for a most-active contract for silver in over 30 years! Gold also finally surpassed the $1300 mark, reaching a record $US1301.60, before settling back down.
Every time gold or silver goes up, contrarians scream bubble - yet, both gold and silver have continued to push new highs.
As mentioned last week (
see the Breakout), with the rise in both gold and silver prices, we are now looking at the beginning of a renewed junior market sector.
Funds are slowly beginning to flow back into the junior mining segments, which means that we may see a strong breakout over the next year for junior miners and explorers (
see the Breakout). Combine that with the continued increase in gold and precious metal prices, the juniors are set to continue their run (
see It's Almost Over.)
Nobody is expecting the US Dollar to do much in the next little while. So you can bet that gold and silver will find a way to work itself higher. With more stimulus and spending in the works, the Fed is cranking up the printing press again, and the dollar is going to suffer for it.
But that's exactly what the US wants...