Gold is forever: Purves

Friend of Breakout Micheal Purves of BCG Partners says the gold move is built to last as both a chart and fundamental perspective.

“From a chart point of view, gold is clearly a buy and hold,” says the chief strategist. He contrasts gold with the broader equity market, which he characterizes as a “wolf” or traders’ market. Gold works on many fronts, says Purves. Perhaps the best case he can make is the slow realization of traders and investors that gold isn’t just an investment but that “gold is one thing and one thing only… another form of currency.”

As for the base metals, Purves is another strategist watching copper. “If you’re trading copper, you’re trading China” he says, nothing that China consumes one out of every two pounds of copper being pulled from the ground.

While Micheal isn’t oblivious to the idea of Chinese growth slowing, he says that copper is your best tell. Copper was the first of the industrial metals to start showing weakness at the beginning of the year and, by Purves’s logic, it’ll be the first to turn higher.

His best way to play copper, not to mention gold, is Freeport- McMoran. The company is 80 percent copper with huge copper assets, not to mention 20 percent gold operations, which doesn’t exactly hurt the his Freeport case, given Purves’ view of the ancient currency.

Source Yahoo Finance

Tags: gold prices

Posted by VBN on Jun 22 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry