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An exceptional but brief - opportunity to invest in gold bullion.

May 09, 2011 – The time is short to take advantage of this temporary pullback in the price of gold bullion. Once again the dollar has rebounded, which according to a Dow Jones Newswire, Steven Englander, head of G10 strategy at Citigroup, attributes to “the fact that the U.S. economic data really deteriorated.” Think about that a minute.

The never ending series of negative economic news creates a risk off sentiment that drives investors to buy back their dollars. But it is the dollar’s deterioration that has led to the bad economic news – not the other way around. And now the Fed has backed itself into a corner and is in no position to ward off the second dip.

“The evidence of a double-dipping housing market and economy are becoming undeniable,” said Michael Pento in MarketWatch. “More evidence of an official double dip in home prices was found in a report from Clear Capital [stating] that its monthly index is now below the prior all- time low set in March 2009.” Furthermore, “Year-over-year national home prices are down 5% [and] home prices have dropped 11.5% in the last nine months, a rate of decline not seen since 2008.” Bernanke’s only option, other than letting the market do what it must and taking the lumps, is to continue holding off the second dip with more easing. But in the end that can make matters only worse. Sooner or later the Fed will have to get out of the business of market manipulation and let the markets seek their own equilibrium.

Nobody is expecting that to happen any time soon. In the meantime small business – widely regarded to be the vanguard of recovery – has become decidedly pessimistic about the future. “The dim assessment shows how severely small businesses' finances remain damaged by the recession nearly two years after it technically ended in June 2009,” says Business Week’s John Tozzi .

The fundamentals driving the price of gold bullion are growing stronger each day, not weaker. “Despite the recent correction, both gold and silver are in big bull markets. Until that changes, pullbacks and corrections are buying opportunities,” says Sean Brodrick in MarketWatch.

And the current pullback has created an exceptional – and most likely very brief - opportunity to invest in gold bullion.

Daily Updates Archive

Jonathan Monroe

Senior Staff Writer -

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