The gold price moved over $906/oz again in Monday's trading, giving more credence to the belief that gold is going to rally. Its rather timely that this is happening when bank (broad equities) are reaching an important support level. The Dow-gold ratio is currently 8.91, still well short of the ratio of 4-5 which we would associate with fully priced gold. You might wonder why gold should be fully priced when no other asset class is? The reason is that when its rallying its the only asset class people will have confidence in. Everyone likes a bargain. At this point gold is cheap, and it will remain cheap until it gets dumped.
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Andrew Sheldon www.sheldonthinks.com



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