With so much attention on gold lately, growth investors should take note: Stocks of gold and other commodities should be treated exactly the same as any other stock.
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If you analyze the commentary of gold, you will note that it has a high content of emotion and a low content of hard fact to back it up.
In an overnight research note before gold hit its session highs, UBS suggested gold may not have hit its low yet since physical demand had not picked up significantly during the recent pullback.
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Soros also cut stakes in miners such as Nova Gold and Kinross Gold while opening a small position in Freeport McMoran, which has exposure to both copper and gold. (Note: All valuations used here represent May 17 closing prices unless noted).
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Those who see weaker prices note the trend for gold has been lower lately.
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Note that the price of gold does not depend upon transaction volume.
U.K. bullion dealer Sharps Pixley, in a research note, pointed out that gold and equities also diverged the last time there was a major fiscal stand-off in Washington.
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Deutsche Bank said in a research note Friday that the disconnect between gold and silver regarding risk reversal is at levels not see in five years.
Also of note, the company is seeking shareholder approval for a merger with Nayarit Gold (NYG) that has been in the works with little news since February.
Accommodative monetary policy in developed economies and an extended low-rate environment will both pump up demand for gold and reduce the opportunity cost of holding it as an investment, reads the note.
It is important to note here that if the U.S. government implemented a new national gold standard, any flaws in its conception or kinks in its administration would cause economic pain throughout the system.
The fresh safe-haven demand in the gold market Thursday was further evidenced by very strong demand at a U.S. government Treasury note auction at midday.
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Note, for instance, that its vertical axes show nominal prices (dollars per ounce for gold, index value for the tech-stock Nasdaq).
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Yields on the ten-year T-note dropped to new lows for the year, as they seem to be the safest haven, after gold.
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