Tags: Smart | Money | Gold | Metals

‘Smart Money’ Continues to Stay in Gold and Precious Metals

By    |   Thursday, 07 June 2012 02:07 PM EDT

In long-term bull markets, there are often lulls.

For example, if you look at the Nasdaq bull market of 1982 to 2000, you will see that at its 1990 low, it had gone nowhere since its 1983 high. That is seven years of near-flat movement despite being in a long-term bull market.

Right now, we have seen a near yearlong consolidation in gold and a near two-year consolidation in the stocks.

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

However, I still think the long-term trend is to head higher.

If you look at economic slowdowns in India and China, the eurozone crisis and the looming debt crisis in the United States, there is little else for these countries to do but to cut interested rates and print money.

Smart money is doing this: Soros Fund Management LLC, founded by the 81-year-old billionaire, more than tripled its investment in the SPDR Gold Trust in the first quarter to 319,550 shares, now valued at $50.2 million, an SEC filing May 15 showed. It held as few as 42,800 shares last year and as many as 6.2 million at the end of 2009.

John Paulson has helped his GLD position in the first quarter.

Editor's Note: Get a free copy of David Skarica’s "The Great Super Cycle" — Read More — Click Here Now.

Therefore, both are ignoring short-term weakness and getting ready for a huge round of money printing to come.

Gold stocks are a special opportunity because by certain valuation metrics, they are cheaper than their 2008 lows and are as cheap as they have ever been.

Therefore, with the big money still long gold and gold stocks cheap — this brings a unique opportunity in the gold sector.

I didn't think we would see as good as buying opportunity in gold stocks as we saw in 2000 and 2008. However, we have one yet again.

If you have missed out on the gold bull market, I would use the recent weakness to take advantage and get in.

About the Author: David Skarica David Skarica is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He also writes the Gold Stock Adviser. Discover more by Clicking Here Now.

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