Gold - Still Missing From Most Investors' Radar

Peter Grandich
After suffering what can only be described as a depression-like bear market that saw gold fall to nearly $250 an ounce, the gold market has risen over 60 percent. Yet, outside of the metals and mining industries, virtually no one has made gold part of their overall portfolio. This bodes well for those of us who have felt $500 gold was not a question of “if,” but “when?”

After parting ways from the metals and mining industry in January 2000, I returned to the bullish camp after visiting the 2003 PDAC Convention. There, I found dramatic evidence that most metals had developed extremely bullish fundamentals and mining and exploration stocks were “dirt” cheap. Fast-forward to today, we find metals and mining shares no longer cheap on average, but still in a quite favorable fundamental and technical picture. The rallies we have seen should continue well into 2005.

While base metals can continue leading the charge, I suspect gold can move to the forefront as we get into 2005. Why? There’s no doubt in my mind that China is the driving force behind the base metals strength. And while that strength can be tempered at times, the belief China will implode is far-fetched in my book.

This should maintain a decent underpinning for base metals at least through the first half of 2005. It’s the second half of 2005 and/or who wins the U.S. elections that I believe can move gold onto most investors’ radar.

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