Sunday, January 10, 2010

As Gold Rises Without Platinum for a Change, Quality May Finally Be Winning for a While

Following the weak jobs report Friday, gold is surging again, having had a strong afternoon after market participants had a chance to decide what they are again apparently deciding, which is that the Fed is on hold for, perhaps, forever, and thus money-printing will dominate in America.
What may be telling for at least a nanosecond or two is that platinum is down while the more monetary metal silver is up as much as gold. Given increased commentary that China may be bubbly and stockpiling raw materials that it is not about to use, gold looks to be the safest metal and definitely is the only precious metal that is already in record territory.

High-quality dividend-paying stocks as well as true growth issues can continue on their merry way upward as long as there is no change in Fed policy.

If the economy moves up slowly but steadily while employment is weak, Treasuries can catch a bid and if and when the next major correction comes, they might just be viewed as the only game in town as was the case 15 months ago. Sentiment is horrible and therefore strongly bullish on Treasuries, as every pro knows that the public has been buying bonds the past year when it foolishly should have been buying Peruvian bonds, copper and money-losing tech stocks that have never paid dividends and likely never will.

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