In-Transit in Dallas, Texas

Gold was the buzzword at the Sovereign Society's Offshore Academy last week. And nobody is more bullish on gold than me. The majority of money-managers and bankers from Europe were generally bullish on gold while some expressed concern after a big rally over the last four weeks.
 
My view is that any correction should be interpreted as another in a long series of opportunities to accumulate gold in the age of violent capital markets, skyrocketing U.S. and Western government deficits and broad-based currency devaluations across the world.
 
Gold, though overbought near-term, remains in a formidable uptrend; I would, however, avoid making fresh investments into gold mining stocks after a stunning 165% rally since last fall. Wait for a pullback before buying gold stocks again.
 


 

When asked at Cabo San Lucas, Mexico, whether now is the "right time" to buy gold my reply was to apportion 50% of your allotted target right away and the balance on any impending correction. The market might run away from here -- though I highly doubt it because everyone is too bearish on the dollar and the buck should muster a violent but powerful short-term rally.

I would use this opportunity (dollar strength, however short-lived) to buy more gold, silver, the Norwegian kroner, Canadian dollar, EUR and Aussie.  
 
News last week that the Indian central bank purchased 200 tons of gold from the IMF sent prices sharply higher again -- gold crossed the $1,100 mark intraday on Friday before pulling back to close at $1,095 an ounce. This morning, gold trades at $1,109 an ounce.
 
Though the Indian central bank is buying gold at these levels, they're defying the broader trend in Indian fabrication demand, which has collapsed since $750 gold last year. The majority of Indians, the world's largest consumers of gold jewelry, aren't lunging after gold at these prices.

Traders commenting in an editorial in the Financial Times last week believed India's $6.7 billion dollar purchase was the largest by a central bank in more than 30 years. Other central banks are likely to follow.
 
Clearly, global investment demand for gold is booming as investors, institutions and central banks in Asia accumulate gold at the expense of the IMF and heavily indebted Western nations. 

I expect this trend to continue for many years as we witness the greatest transfer of wealth from West to East, marking the end of Anglo-Saxon global financial domination after nearly 300 years.