Like a roller coaster, the exchange traded funds for the United States Dollar (NYSE: UUP) and gold, SPDR Gold Shares (NYSE: GLD), have gone up and down in response to statements from the Federal Reserve. What is obvious by the continuation of Quantitative Easing III by Federal Reserve Chairman is that the United States economy is still weak. With that and the improving Chinese economy (NYSE: FXI), the future for gold assets such as the GLD, Barrick Gold (NYSE: ABX), and Wishbone Gold PLC (PINK: WISHY) is bullish.
China is the second largest consumer of gold. Eventually, it will surpass India. It is a "perfect storm" for gold when the American economy is weak and the Chinese economy is strong. In terms of the Chinese economy improving, the exchange traded fund for China, iShares FTSE China, is up more than 10% for the last month of market action.
By contrast, the PowerShares Dollar Bullish exchange traded fund for The Greenback is off for the last month of trading.
Growth in China is particularly bullish for Wishbone Gold PLC. With its extensive resources Australia, Wishbone Gold PLC is ideally situated to serve both Chinese Indian gold demand. China has always had a strong demand for natural resources from Australia.
The bullish future for gold has been shown by recent actions from experts.
Barron's magazine ran a very bullish piece on Barrick Gold. Now trading around $18.60, the article in Barron's stated that, based on asset value, Barrick Gold was worth $44 a share. Barrick Gold was just recommended by UBS.
Beaufort Securities just recommended Wishbone Gold PLC. Investors should look upon short term swings in the price of gold as an opportunity to buy at a discount for long term profits. With the FXI up and the UUP down, that creates the setting for the GLD, WISHY, and ABX to reward buyers for the long term.
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