While non-gold-related holdings account for the majority of my portfolio, the fact that I put roughly 20% in gold mining stocks, on top of the 10% position in GLD last summer, has never been regretted by yours truly.
I could regret my commitment to gold and gold mining stocks at some point. But I don't think so. If I lived in Canada or Australia I may not have gone in as heavily, yet I suspect I'd still have some position.
We saw a real run on the banks in the Panic of 2008. Last week we saw some sort of panic, and I think it was more than just a "fat finger" mistake. And at some point -- I don't know when, it could be several years in the future -- we'll see a government debt panic.
So, while I'll acknowledge the possibility that I may one day wish I hadn't had my exposure to gold and gold miners, I also think I may one day wish I'd put more into the sector. No one knows the future. We're all in the fog of history.
Peter Brimelow discusses gold's great week last week in his MarketWatch column. Here's part:
Edel Tully, the gold analyst for UBS, also flagged this demand for bullion in a comment on Friday:
"Our Zurich and Geneva sales desk experienced exceptionally strong demand for small bars and coins...demand yesterday was the greatest that we have experienced since 2008...Coin demand is so intense that supply is struggling to match... German investors have turned to gold."
This is a moment when an accurate strategic view could be invaluable. The remarkable Australian service The Privateer offers one forcefully in its weekly commentary:
"Last week, we titled this report 'A Watershed Week For Gold?' Note the question mark (?) at the end of the title. This week we are removing the question mark. The market 'action' of the last five days has definitely confirmed the hypothesis....what was signaled last week by Gold refusing to go down as the world debt markets seized up again was confirmed this week.
"This time, there are only four global investments left fighting it out for supremacy. They are, in no particular order, the US Dollar, US Treasury debt, German sovereign debt - and GOLD...in the face of this renewed headlong rush into 'safety', Gold is up substantially in terms of EVERY major paper currency in the world - INCLUDING THE US DOLLAR!"
And more:
The idea that something seismic is happening to gold is definitely gaining credence in more conventional, non-gold bug investment circles. James Steel, gold analyst at HSBC, commented on Friday evening:
"Gold seems unlikely to retrace significantly until the reason for its rally -- escalating sovereign risk worries -- abate...we believe that buying interest in gold is unlikely to diminish appreciably, short of a clear resolution to the crisis."
MarketVane's Bullish Consensus at only 78% -- last year's high was 89%. And our Hulbert Gold Newsletter Sentiment Index is at 46.6%. versus 68% last year.
Food for thought. There's no shortage when it comes to gold.
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