A New Bull Phase for Gold?

06/26/2012 11:00 am EST


Doug Fabian

Editor, Successful ETF Investing, ETF Trader's Edge, Weekly ETF Report, and ETFU.com

From his analysis of gold’s market history and specifically the most recent up phase, Doug Fabian believes that the yellow metal is in a buy zone now, especially through ETFs.

Is a gold rush underway? Doug Fabian is here. Doug, now is a good time to invest in gold?

Well, one of the key areas that we’re talking about here at the MoneyShow is a new opportunity in gold. Over the past several months, gold has had a pretty significant correction.

I went back and looked at the corrections that gold has had during the ten years of the bull market that it had been in. Right now, we’re within the parameters where I believe that it’s a good opportunity for people to once again revisit the precious metals.

Where should the average consumer start?

Well, I think an easy way to be able to get into this space is the precious metals exchange traded funds. You can buy the SPDR Gold Trust (GLD), which is just a pure physical gold play, or you can buy the gold mining ETFs as well.

Right now, there are 35 different exchange traded funds that focus on the precious metals, and give investors a lot of opportunity, and in varying degrees of risk.

How long is the average gold cycle, would you say?

Well, gold bull markets…when I got into the business in 1979, we were at the tail end of one of the great bull markets in gold when it moved from $100 to $800 an ounce, and that was over the course of about 12 years.

This particular bull market, I think it has been in place for ten years, but I think it’s got legs because the fundamental underpinnings are central-bank printing, and we’ve got a lot of that going on in Europe and we’ve got a lot of that going on in the US. So I think that this bull market still has further to go.

There is never a correlation between election year and gold, is there?

No. There really hasn’t been any sort of political cycle with gold. It’s really more what’s going on with central banks and the policies of governments in terms of how much money they’re printing, how much money they have in excess of their GDP, their spending, the like. Those have been the fundamental factors that drive gold.

OK, so not too late to get in.

No, it’s not too late to get in.

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