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12/29/2011 @ 6:06PM |1,538 views

Best Long And Short Investment Ideas For 2012

  Charles Biderman , Contributor

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As I speak, gold continues to weaken in price. I expect gold to continue to sell off perhaps a bit more. But the facts are that the European economies are declining and that stealthily, the European Central Bank, the ECB, has been printing trillions of new euros.

Therefore, to me, the best trade idea for 2012 is to go long gold and short the euro on a dollar cost average trade each month. Yes, gold is down 20% from its high. But what I most like about gold is that emerging market central banks remain consistent buyers of gold.

It would make sense to me for emerging market central bankers given the dollar, euro and Yen printing to be a consistent buyer throughout 2012. If you don’t want to invest in gold directly, try an exchange-traded fund like SPDR Gold Shares (GLD ).

For what it is worth, I would recommend also buying commodity stocks using non-U.S. dollars, in other words, buying Canadian, Australian and New Zealand commodity producers in their local currencies; again on a dollar cost basis. That way you are not only long commodities, but also short the U.S. dollar vs. the non-US dollars.

I was on Bloomberg TV this morning at Pier 3 in San Francisco. In chatting with several reporters, I had an epiphany. Almost all financial reporters and stock market investors are hoping and praying for a miracle to occur so that in 2012 the U.S. and global economies grow their way out of the current financial mess.

That hope for a miracle is conditioned on what has happened in the past. Ever since World War II the U.S. economy sooner or later has rebounded sharply thereby fixing all the problems that showed up during the downturn. Since it has always happened in the past, most investors and even cynical Wall Street professionals deep down inside believe that a miracle will occur and robust economic growth will magically appear as it always has in the past.

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That’s why Wall Street professionals believe that printing trillions of dollars of new euros and U.S. dollars is OK if indeed very rapid economic growth starts soon; which would then make refinancing all that new paper much much easier.

However, those of us who are willing to look and face reality do not see any miracles coming down from heaven anytime soon. The ultimate solution has to be a total restructuring the European and U.S. economies to where entrepeneurial activity is encouraged and where government spending is closely related to government income.

Clearly there is no political will to actually solve the real problems. Instead the political will is to kick the can down the road and pray that a miracle will occur before the can becomes too big and impossible to kick any further.

Charles Biderman is president & CEO of TrimTabs Investment Research.

http://www.forbes.com/sites/investor/2011/12/29/best-long-and-short-investment-ideas-for-2012/

2012 Gold Outlook: $1000 or $2000?

Pullbacks in Perspective

Jeff Clark, Senior Precious Metals Analyst

December 9, 2011 4:19pm GMT

By Jeff Clark, Casey Research

If you're bullish about the long term for gold and silver, it's mouthwatering to watch them undergo a major correction after taking earlier profits that added to your deployable cash. For a little historical perspective on pullbacks, consider the following charts.

The current 15.6% gold decline, while considered a "major" correction, is not out of the ordinary, particularly following the late summer spike. And after each big selloff, there was a price consolidation phase that in every instance led to higher prices. The message: hold on, and buy the big dips.

http://www.caseyresearch.com/articles/pullbacks-perspective?ppref=CRX426ED1211B

MARK HULBERT Archives | Email alerts

Nov. 30, 2011, 12:01 a.m. EST

Gold likely to be higher at year’s end

Commentary: Sentiment continues to support higher gold prices

By Mark Hulbert, MarketWatch

CHAPEL HILL, N.C. (MarketWatch) — Sentiment conditions continue to support higher gold prices.

It was one month ago that I last devoted a column to gold market sentiment, reporting that bullishness had dropped to its lowest level in two-and-a-half years. ( Read my Oct. 26 column, “Why gold is rallying.” )

Though gold did rise $150 an ounce over the subsequent two weeks, bullion today is only modestly higher than then. It’s time to take a fresh look at the sentiment picture.

Consider the average recommended gold market exposure among a subset of the short-term gold market timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Gold Newsletter Sentiment Index, or HGNSI). This average currently stands at 13.7%, which means that the bulk of timers’ gold-oriented portfolios is being allocated to cash.

To put that in perspective, recall that gold is now trading at more or less the same level it was early last August. Yet the HGNSI then was nowhere near as low as it is today; in fact, it then got as high as 67% — one of its highest level in several years.

In other words, gold timers then were inclined to see gold’s glass as half full, or even three-quarters full. Today, in contrast, even though gold’s glass is in fact just as filled as it was then, gold timers are seeing it as mostly empty.

One way of viewing gold’s sharp correction in the late summer and early fall is that it was necessary to work off that excessive level of bullishness, which stood in the way of gold continuing to rally. Today, in contrast, that bearish slope of hope has given way to a bullish wall of worry.

Additional evidence for this wall of worry comes from the HGNSI’s behavior at gold’s various correction lows over the last year: With each successive low, the HGNSI dropped to an even lower level.

http://www.marketwatch.com/story/gold-likely-to-be-higher-at-years-end-2011-11-30?reflink=MW_news_stmp

Why Gold Isn’t in a Bubble (moneyshow.com)

Friday, November 18, 2011

View VIDEO of this transcript    Commodity expert John Stephenson from First Asset Investment Management explains why he does not think gold is in a bubble, and how high he thinks gold can climb, in this exclusive interview with MoneyShow.com. We're talking precious metals today with John Stevenson. John, is gold in a bubble? Absolutely not. In fact, I think what you're going to see is gold hitting $3,000 an ounce way before you ever see it dipping below $1,500 an ounce. So I think the best days are yet to come for gold investors. Give us a little context for that. Why you view that as not being in a bubble, and why you see so much potential ahead? Sure. Well, gold, as well as silver for that matter, have been historical currencies for thousands of years. In fact, we were on the gold standard in the US for many years, and the world was, the Western world was. What we're seeing around the world is really a follow through from the 2008-2009 crash, where we saw consumers and businesses heavily indebted,. All that happened in the intermediating years is the government stood in and they were the spenders of last resort, and so the risk was transferred from the household sector to the corporate sector to the government sector. We know these governments are broke because Greece is on the front page of the newspaper every day. Europe is on the front page. Is the European Union going to hold together? What about the debt ceiling in the US? What about Obama and his speeches? Will we get some physical stimulus from the US government? Will it get through Congress? This has got people spooked. People are worried about political gridlock on both sides of the Atlantic. And they're saying, I think, the only way out of this mess is for governments to print money. Because after all, it's a lot easier to pay off your debts in inflated dollars than it is to go the root of austerity, as the Greeks have shown us. This has made people flock to these precious metals. Not only gold, but silver and diamonds as well are up over 30% year to date.

http://www.moneyshow.com/investing/article/43/VideoTrans-25448/Why-Gold-Isnt-in-a-Bubble/#

How Will the Yen Intervention Affect Precious Metals? (Wall Street Cheat Sheet)

By Eric McWhinnie

October 31 2011

The relationship between the US dollar index and precious metals is an important one to respect.  Last week, the dollar index experienced a sharp decline as the EU plan offered support to the euro, which is the largest weighted currency in the dollar index basket.  As a result, gold and silver had a terrific week.  Now, the Japanese yen is sending the US dollar sharply higher, and precious metals lower.

The Japanese yen is the second largest component of the US dollar index.  Early Monday, the Japanese government sold the yen for the second time since August after hitting another post-World War-II record high against the dollar.  A currency intervention is often considered a way to boost exports.  “We started currency intervention this morning in order to take every measure against speculative and disorderly moves and to prevent risks to the Japanese economy from materializing,” Prime Minister Yoshihiko Noda told parliament.  The intervention came after the dollar reached a low of 75.31 yen, and the intervention sent the dollar surging to 79.53 yen.  The Bank of Japan confirmed the intervention, but did not comment on the size of the action.  “It’s been massive, really, that’s the only word to describe it,” said Michael Turner, strategist at RBC Capital Markets.  “From what we gather, it’s larger than their most recent intervention.”

On Friday, gold futures for December delivery closed at $1,747.20 per ounce, while silverfutures settled at $35.29.  We have been warning our premium subscribers that the dollar index broke a critical support level, and was due for a pullback into the 73-76 range.  Last week’s strong decline in the dollar index confirmed this, and gave gold and silver the strength to break out of their respective trading ranges.  As the charts below show, gold broke through $1,700, while silver broke through $34.

On Monday morning, the large Japanese yen intervention move sent the dollar surging higher and dollar denominated assets lower.  Gold reached as low as $1,705, while silver fell to $34.09 in morning trading.  “Gold and other precious metals are being knocked this morning by profit-taking and the strong US dollar,” said analysts at Commerzbank.

Going forward, many believe that this is not the end of the road for gold and silver.  “After a short period of consolidation in gold, I believe it will continue upward progression,” said Jeff Wright, managing director at Global Hunter Securities. “We are comfortable with gold rising back to $1,800–$1,900 level in early 2012 with a spike above $2,000 in the first half of 2012.”  The US still faces problems of its own.  The Congressional Super Committee, a bipartisan committee, is fast approaching its November 23 deadline to find $1.5 trillion in deficit cuts.  According to bond strategists at CRT Capital Group, 38.5% of survey respondents believe a failure to reach a deal by the Super Committee would lead to another downgrade of US credit by the end of the year.  As we discussed in a previous article, the last US credit downgrade sent gold surging 13% in about two weeks, while silver gained 10%.

http://wallstcheatsheet.com/gold/how-will-the-yen-intervention-affect-precious-metals.html/

PRESS RELEASE

Oct. 10, 2011, 2:43 p.m. EDT

Is Gold Undervalued? Goldline CEO Scott Carter Says Macroeconomic Conditions, Supply/Demand Factors Are Still Supportive of Higher Prices

SANTA MONICA, Calif., Oct 10, 2011 (BUSINESS WIRE) -- While gold prices have increased every year for the past ten years, the yellow metal could still be undervalued and see further appreciation, according to Scott Carter, CEO of Goldline International, one of the largest retailers of physical precious metals in the U.S.

"Multiple factors -- many relating to the precarious state of the American and European economies -- continue to support gold prices just as they have for the last decade," Mr. Carter said. "In addition, a number of industry forecasts call for gold prices to increase above their current level as well as the recent peak price. Of course, no one can say for sure what the future holds, but we believe that precious metals should be considered as part of any long-term portfolio diversification strategy."

There are a number of fundamental reasons why the price of gold could continue to increase, according to Mr. Carter. Among them...

Gold still hasn't exceeded its previous peak price. Despite seeing gold prices increase over 450% since August 2001 and more than 10% in 2011 alone, gold is still below its inflation-adjusted high set in 1980 (roughly $2,300 per ounce in today's dollars).

Respected analysts forecast higher prices. J.P. Morgan and Citigroup see gold prices increasing to $2,500, while Standard Chartered Bank says central bank purchases and demand in China and India could push gold to $5,000 per ounce in the coming years. A poll of 530 delegates attending the London Bullion Market Association's annual conference in September 2011 found that their average expectation was for between $2,019 and $2,075 per ounce for gold by November 2012.

Macroeconomic and geopolitical uncertainty. Economic uncertainty in the U.S. and Europe, political uncertainty in the Middle East, and other concerns may continue to prompt investors to acquire gold as a "safe-haven" asset.

Monetary policy and U.S. dollar weakness. Current monetary policy, which is designed to stimulate the economy by keeping interest rates extremely low, could translate into a weaker dollar and higher inflation in the future. This type of environment is driving more investors to seek out gold.

Central banks are purchasing gold. Just a decade ago, central banks were net sellers of gold. Since 2009, they have become net buyers as they take steps to cope with volatile global financial markets and the pace is accelerating. The central banks of Russia, China, India, Mexico and Thailand, among many others, have added to their gold reserves since this time. These acquisitions reduce supply in the market and put upward pressure on the price of gold.

Supply and demand dynamics. According to a recent Standard Chartered Bank report, gold mining production hasn't kept pace with demand during the 10-year gold bull market. For example, if China were to increase its gold reserves to the global average of 11% of its foreign exchange reserves, it would have to buy the equivalent of more than two years of global gold production, according to the study. Despite its recent buying spree, China still has only 1.8% of its foreign exchange reserves in gold.

"As is true with many asset classes, trying to time a top or bottom of the market for gold can be nearly impossible. With that caveat, there still appears to be considerable growing room for the price of gold. We believe gold is worth considering as a component of a long-term portfolio diversification strategy," Mr. Carter said.

About Goldline International

Goldline International is one of the largest companies providing physical precious metals to collectors and investors in the United States. Founded in 1960, Goldline is headquartered in Santa Monica, CA with over 300 employees and annual sales exceeding $500 million. In 2011, Goldline was recognized by Inc. Magazine as the #6 fastest growing company among private companies with more than $500 million in annual revenues. For more information about the company or how to buy gold, please call 800-827-4653, visit goldline.com and follow Goldline on facebook.com/goldline or twitter.com/goldline.

SOURCE: Goldline International