Investors Around The Globe Betting On The Yellow Metal (GLD,GDX)

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June 16, 2009 10:06am ETF BASIC NEWS NYSE:GDX

goldKishori Krishnan from Gold Investing News reports that “An insurance company getting into gold? That’s right. America’s third largest life insurer, Northwestern Mutual Life Insurance which has been in existence for 152 years, has never in all those years bought gold. Until now.”


Krishnan goes on to say that “The company has disclosed it recently invested around US$400 million to buy the yellow metal in the expectation that it was not only a prudent way to preserve its funds but also that the metal’s price would rise significantly. The company has bought the precious metal to hedge against further asset declines.” This seems to be a large purchase for buying the metal for the first time.

Krishnan continues that  “This is significant because here is a presumably conservatively-run company putting a good deal of faith in gold. “Gold just seems to make sense; it’s a store of value,” Chief Executive Officer Edward Zore said in an interview, following his comments at a conference hosted by Standard & Poor’s in Brooklyn.”

Zore said the price could double or even rise fivefold if the economy continues to weaken. “The downside risk is limited, but the upside is large,” Zore said. “We have stocks in our portfolio that lost 95 per cent.” Gold “is not going down to $90.” Zore said the price could even rise fivefold if the economy continues to weaken. Gold gained 10 per cent last month, the most since November. The commodity has more than tripled since 2000, rising for eight straight years.

Everyone around the globe seems to be  jumping on the GOLD wagon.  As we published before, John Paulson Betting Big On Gold ETF , holds one of the largest positions in  GLD (the gold bullion ETF).  Krishnan reports that “On May 15th, a 13F Filing showed that hedge funds managed by John Paulson held almost 9 per cent of all outstanding GLD (the gold bullion ETF) at the end of March, a position with a market value of around $3 billion. Paulson’s funds also owned about 15 per cent of GDX (the gold mining stock ETF), 11 per cent of Anglogold (AU), 4 per cent of Kinross (KGC), and 3 per cent of Goldfields (GFI).”

Full Story: Here


We ran these GOLD ETF’S through the market club software and found the following results from their chart analysis program:

MARKET VECTORS GOLD ETF (PACF:GDX)
Smart Scan Chart Analysis shows the current downward trend is at a crossroads and has possibly ended. Look for choppy trading action in the nearterm Very Weak Downtrend with very tight stops.Based on a pre-defined weighted trend formula for chart analysis, GDX scored -60 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

     
+10 Last Hour Close Above 5 Hour Moving Average
-15 New 3 Day Low on Monday
-20 Last Price Below 20 Day Moving Average
-25 New 3 Week Low, Week Ending June 20th
+30 New 3 Month High in June
-60 Total Score
 
SPDR GOLD TRUST ETF (PACF:GLD)
Smart Scan Chart Analysis shows the current downward trend is at a crossroads and has possibly ended. Look for choppy trading action in the nearterm Very Weak Downtrend with very tight stops.Based on a pre-defined weighted trend formula for chart analysis, GLD scored -60 on a scale from -100 (strong downtrend) to +100 (strong uptrend):
     
+10 Last Hour Close Above 5 Hour Moving Average
-15 New 3 Day Low on Monday
-20 Last Price Below 20 Day Moving Average
-25 New 3 Week Low, Week Ending June 20th
+30 New 3 Month High in June
-60 Total Score

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