Gold decline presents massive buying opportunity

According to experts, fundamentals are showing that gold will once again take center stage in the "not too distant future." For the long haul, gold will head to much higher price levels. The current dip in prices presents investors with a perfect buying opportunity.

By Mary Anne & Pamela Aden
Sept. 28, 2011, 1:45 p.m. EDT
Market Watch

The markets have been wild and volatile over the past couple of months. In fact, it's hard to remember a time when so many fast-paced events were happening at the same time, all over the world.

Investors are nervous and uncertain. In some cases, they're downright fearful and this is being reflected in the jittery market action, across the board. In knee-jerk fashion, markets have been quick to rise on good news and drop on bad news, depending on the day's story.

The weaker global economy, the deteriorating situation in the euro zone, growing U.S. debt, politics, Operation Twist, Greece, vulnerable banks, fears of another 2008 type debacle... they've all taken their toll in one way or another.

As a result, there's been a rush to safe havens. The key beneficiaries have recently been U.S. bonds and the U.S. dollar as they've risen strongly. On the other hand, gold, the traditional safe haven, dropped sharply along with global stocks. But this is now changing.

Things are beginning to settle down somewhat and some optimism is emerging. Stocks are rising and they could head higher in the weeks ahead. This would not be unusual following their steep declines and oversold levels.

The same is true of bonds and the dollar. As safe havens move to the back seat, these markets will likely take a breather and decline further, at least for the time being. Again, this would not be unusual since they've risen far and fast.

Gold is another story. It too is rebounding, along with stocks but it's traditionally done its own thing. Over the past decade, it's been the best investment in good times and bad. But it's now moving in tune with the other markets.

Nevertheless, the fundamentals show that it will again take center stage in the not too distant future. In other words, despite the likelihood of more volatility in the weeks ahead, gold is headed much higher over the long haul.

The stage is essentially set, but the markets have been running hot and cold. They're still quite emotional and anything is possible in the short-term. In other words, be prepared for more volatility, stay cautious and watch the markets.

The markets will always tell the story and lead the way. That's why the major trends are most important. Despite short-term wild swings, the major trends are vital in keeping the action in perspective and they're the most profitable.

We'll have more on this next time. Until then...

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