Sell Bullion, Buy Gold Stocks

Source:

...specialist traders believe that gold bullion should be sold as the global credit markets thaw proceeds, and that gold equities should be bought. It is fairly widely anticipated, however, that gold bullion will head up to new highs in 2009, surpassing its record dollar levels seen in March this year.

Hedge funds and speculators, in particular, have left lots of wreckage across all lanes of the global resources highway, but as in the case of any pile up that can be seen from outer space, there are gems hidden all around and within the carnage. One of the finest ideas that made landfall on Tuesday, following one of the worst days in global credit, equity, commodity and currency markets history, was that the pricing of listed gold stocks is at an all time low vs. the dollar price of gold bullion.

Some specialist traders believe that first, gold bullion is poised for a sharp correction back to physical demand support at USD 800 an ounce from current levels around USD 775 an ounce, and that, second, listed gold equities will rally in line with a broad based equity rally...

The average explorer and developer, or junior, gold stock is trading a massive 71% below price peaks, also seen just months ago...

In more general terms, specialist traders believe that gold bullion should be sold as the global credit markets thaw proceeds, and that gold equities should be bought. It is fairly widely anticipated, however, that gold bullion will head up to new highs in 2009, surpassing its record dollar levels seen in March this year.

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