OIL: oil to $100 GOLD: to $ 900

Discussion in 'Off-Topic' started by Invest in oil, May 9, 2006.

  1. Invest in oil

    Invest in oil Member

    If I may point out a few investment tips that can help you cope with rising cost of energy... USO PTF GLD XLE and with rising interest rates AHM.

    However some people here think that Gold and Oil is risky... That's why people are flocking towards hybrids, and pushing for alternative forms of energy and visiting this board?

    Don't underestimate inflation or the commodity bull
    Commentary: Don't underestimate inflation or the commodity bull
    May 4, 2006 12:08 PM ET
    By Mike Paulenoff, MarketWatch.com

    good part of the nervousness has to do with commodity prices, particularly gold and oil, which are showing few if any meaningful technical or fundamental signs of slowing down. Gold is pushing $700, a gain of 65 percent from its $425 price 12 months ago. Oil has gone to $75 from $50 a year ago, a 50 percent gain, and copper rallied 6% to $3.50 a pound this morning, from around 1.10 a pound, in the past year. See story: Metals Stocks

    From a technical perspective, in order for a market to begin to top-out and then reverse after being in an intermediate- or long-term trend, it has to meet a force equal to or greater than the force that's driving the dominant trend direction in the first place. No such force is approaching either gold or oil at this point. Neither one is exhausted from a technical point of view, and neither one has fundamentals that argue for an impending reversal to where they were four or five years ago -- in serious oversupply.

    If anything, demand for oil is increasing, and if anything the perception that you need to own gold in this dangerous and complex world also is increasing. Add to the massive commodity bull market the advent of exchange-traded funds, or ETFs (which concentrate on a particular commodity, but trade like a stock), and you have removed much of the barrier to entry for individuals and fund managers who desire to own or hedge gold, silver, oil, and other commodites. ETFs for gold (GLD) (IAU) , silver (SLV) , oil (USO) or baskets of energy shares such as (XLE) , enable individuals to participate in this massive bull trend, which in turn helps compound the trend as more investors become involved.

    Investors should continue to be rewarded in these commodities, as the chart patterns point to higher prices. Gold should head for $750 in this leg, and then, after a brief correction, should try to take out the 1980 highs at around $900. The oil charts indicate a move into the vicinity of $77 to $78 relatively soon, and then, after a correction similar to gold, a move towards $100 per barrel.

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