Well then ... I think this qualifies as an OMG moment for Gold investors. Needless to say, it seems like a lot of people, including billionaire Warren Buffet, are convinced that Gold has seen it's day, and that the mega uptrend that gold is on (was on) has bottomed out and is in the process of reversing.
Why am I writing that people are convinced that gold has seen it's day? Because Real estate and stocks are the opposite to Gold and commodities. When the Dow to gold ratio bottoms out, it IS time to sell your gold, and buy into stocks and real estate. The problem is that the ratio has NOT bottomed out, although as I have already said in a previous post, we may be experiencing a 1974 style blip in the trend. For traders, this 'blip' could be devastating if they are on the wrong side of the trade. But make no mistake - and take heart - the major trend in Gold has not bottomed out, and I am convinced that the best years still lie ahead.
As for now, it definitely won't hurt to add in some general equities to your portfolio, especially if you are worried about shorter term fluctuations in the market trends. As for me, I consider this 'noise' a strong buying opportunity. Sentiment in the gold and silver sector just keeps getting worse, and given that (1) the Dow to Gold ratio stands at 8 (as of today at 1pm), (2) inflation is still a real possibility, and (3) trillions of currency units have been released into world economies via loose monetary policy (and not because of real economic expansion), the long-term case for Gold remains in tact.
