This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Weak U.S. Dollar Lifts Precious Metals

NEW YORK ( TheStreet) -- Demand for precious metals exchange-traded funds such as iShares COMEX Gold (IAU) and iShares Silver (SLV) have remained strong even as investors have taken profits in other commodities.

Some of the positions that have worked best for my momentum-based client portfolios and newsletter subscribers over the past one to two years have been gold and gold stocks, such as Market Vectors Gold Miners (GDX) and Fidelity Select Gold (FSAGX). Although I expect all precious metals to appreciate further over the next 12 months, I have begun to look more closely at the relative performance of platinum and silver ETFs, which have lagged those of gold until this latest bullish spurt.

One of the reasons I have advocated small positions in both the bullion and mining stocks is their potential to hold up during times of financial crises. Although gold didn't respond entirely as expected during the height of the crisis last year, gold investments have rebounded to their pre-crash levels. And whether you are a believer of inflation or deflation as the near-term course for U.S. dollar-denominated assets, there is a good chance that precious metals will hold their value, even at these elevated levels.

There are many factors that have supported the price of gold throughout the downturn and even during the latest rally, but I believe it is the weakness in the U.S. dollar and the growing expectations for higher inflation that will remain primary driving forces. As long as the dollar can depreciate further, both retail and institutional investors alike will continue to generate financial and speculative demand for precious metals, and primarily gold because of its perceived utility as a store of value. One only needs to look as far as India and China, where consumers have been encouraged to diversify away from the dollar and buy precious metals directly in place of jewelry.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
GDX $13.69 0.00%
IAU $10.58 0.00%
PGM $20.43 0.00%
SLV $14.02 0.00%
AAPL $123.38 0.00%

Markets

Chart of I:DJI
DOW 17,630.27 +189.68 1.09%
S&P 500 2,093.25 +25.61 1.24%
NASDAQ 5,089.2060 +49.43 0.98%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs