Peter Schiff’s July Gold Letter was released today. Editor Mike Finger writes about alternative currencies at “The Fiat-Free Festival”, and Jeff Clark of Casey Research examines the difference between short-term gold sentiment and long-term reality. Plus, enjoy Lampoon the System’s latest comic and a fascinating discussion between Stefan Molyneux and Peter Schiff about the future of gold. Peter’s commentary examines the supposed correction in gold and why its commodity fundamentals indicate a healthy rebound in the price is very likely.
“Gold’s second quarter price plunge is now the biggest on record, dropping 23% in the last three months to finish a little over $1,200. According to most mainstream analysis, this is just further proof that the yellow metal’s bear market is no fluke. In fact, some commentators insist that this is just the beginning of gold’s price rout and that there is nothing stopping the yellow metal from falling to $800 or lower.
However, looking at the commodity fundamentals of gold, the metal simply cannot stay at these low prices for much longer. If it hasn’t reached it already, gold is nearing a bottom at the key price of $1,200, which is the point where global mining operations are forced to pinch supply in spite of continued strong demand.
Not only is diminished production likely to halt gold’s downward trajectory, but an imminent supply crunch could also propel gold back to new highs. This likelihood of a strong rebound is supported by both a struggling mining industry, and gold’s historical behavior last time it experienced such dramatic volatility in the middle of a bull market.”
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I certainly agree that no investment market is a fluke, and least of all the gold industry. With the once highly lucrative gold market plunging to a record low, I think this only affirms one important lesson for investors; there is not a single asset that guarantees 100% profits. Hence, it is prudent to have a diversified investment portfolio.