Investors should put their money in gold or companies that do well amid higher gold prices, says David Skarica, editor of the Gold Stock Adviser newsletter and author of "The Great Super Cycle." Debt and equity markets also are full of hurdles, and mounting global criticism of U.S. fiscal and monetary policies might eventually lead to higher borrowing costs and soaring inflation, ultimately sparking unrest around the world, he warns.
Gold stocks normally trade between 40 percent and 60 percent of the price of gold, meaning that if gold is worth $1,000 an ounce, a stock index tied to the precious metal is ripe with buying opportunities when at or less than 40 percent or is too expensive when breaking 60 percent of the per-ounce price.
"Right now the ratio is only about 38 percent, and that's despite this huge run we've had in gold and gold stocks, telling us that gold equities are still cheap compared to the metal," Skarica tells Newsmax.TV.
"Gold stocks are extremely cheap," especially considering that gold is trading near $1,390 an ounce and should soon rise to around $1,700. (more)
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