Two to Buy on Gold's Big Drop

Gold's furious retreat this morning is a reminder that this commodity seems to have endless trouble topping $1,000. Plus it now has a classic double top that would indicate that we are about to experience a real hammering to the commodity.

Normally we get some seasonably strong gold buying in part because of actual demand from Indian jewelry, something that news reports indicate is sorely lacking this year. Plus we still have deflation, not inflation, a point that Ron Insana's been making repeatedly -- and correctly -- in his new newsletter for TheStreet.com.

Yet my take is, you have to buy it when it goes under $900. More specifically, two great trades have been to buy Agnico-Eagle (AEM - commentary - Trade Now) below $48 and Randgold (GOLD - commentary - Trade Now) below $55 -- both are wild traders, so these limits aren't nuts.

Why gold? Once again, I consider gold an integral part of a portfolio when there's chaos and massive stimulus that will debase paper currency. I simply like to have a good entry point, and another one seems to be coming right along.

Why those two? Agnico's about to have a dramatic decline in finding cost after a huge capital expenditure program. Randgold's got the cheapest properties in Africa, and after interviewing the CEO, I am confident that the safety of those properties -- as bizarre and counterintuitive as it seems in Africa -- creates a discount that is unwarranted.

I know that I have been recommending SPDR Gold (GLD - commentary - Trade Now) below $90, but my enthusiasm for that 1-for-1 security has waned vs. the stocks here, because both have long-lived properties and superior managements. The usual caveats (which I now like to put in many pieces because of the vehement objections to virtually everything I write): I do not expect gold to bottom right at $890 -- I like to leave room, and I know that gold stocks have been historic poor performers vs. the bullion, but in these two cases the opportunities are just too great. AEM in particular could be a winner, as it has now pledged to begin returning dividends of size to shareholders with the completion of its mammoth expenditures.

Random musings: The endless decline in slot take by Las Vegas Sands (LVS - commentary - Trade Now) in the colossal facility in Bethlehem, Pa., tells me that unless Macau returns big, this one could be a short again. Hedge with Wynn (WYNN - commentary - Trade Now) bonds, which have historically done better than the stock...

At the time of publication, Cramer had no positions in the stocks mentioned.

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