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Wall Street rally: Check out Goldcorp (GG) and Barrick (ABX) and buy gold

Today's Financial News - Posted October 13, 2008

Wall Street is celebrating today. It was the biggest rally in Wall Street history, yet it just a three-day high. The jubilation will not continue and gold prices will soar. Use today’s action to profit well after today’s action subsides.

By Andrew Snyder

Baltimore – (TFN): I am starting to think Wall Street must have eaten a lot of lead paint when it was a kid. If its short-term memory got any shorter, I would hate to see it.

It seems as though the Street cannot remember what it did yesterday, let alone last week.  This time last week, it was pure panic and investors were running to safety. This week, it appears as though nothing ever happened.

It is pure jubilation on the markets today. The Dow stretched for gains above 930 points. Floor traders were shrieking with joy. And everyday investors were calling their brokers and saying, “I am all in.”

Let’s not kid ourselves. We all know the world economy is in trouble. We cannot be fooled by today’s low-volume plunge because who knows what tomorrow brings. We are entering the peak of earnings season and all it will take is a few big names to issue scary forecasts or missed earnings and we will be right back in “plunge” mode.

Although today’s action may not look like it, we are in the midst of a recession. And just because the Fed lowered rates last week, does not mean inflation is not a very serious concern. Bernanke and his troops only lowered them because they were bent over a barrel and were forced to make the move.

Call it what it is

With investors scared of a shaky stock market and inflationary fears still breathing down our neck, it is a perfect opportunity for gold speculators. Gold will increase in value as the world’s economies falter.

But you would not be able to tell that today. The price of an ounce of gold fell by over $18 today and has dropped by over $60 in the last few weeks. It will not stay that way for long.

If you think today’s action was positive, wait until gold starts its bullish run thanks to a healthy recession. It has done it multiple times before and it will do it again.

Gold investors have a great opportunity to buy the rare metal at a fantastic price. Many experts are calling for prices over $1,500 per ounce.  Some are even calling for over $2,000 per ounce. Right now, you can buy the shiny stuff for just $840.  It is a deal that cannot be beat.

Now is the time to be buying gold-related stocks. Companies like Goldcorp (NYSE:CG) and Barrick Gold (NYSE:ABX) will see their share price rise right along with gold. Both are selling at discounts and both are worth taking a look at.

But if you would rather play the options market, and have the opportunity to increase your profit potential exponentially, I have created a fantastic hedge play for you. You know by my track record, I love playing the options market in situations like this.

As the price of gold soars in the next few months, so will these options. And as the economy finally rebounds and gold prices descend, the other piece of the hedge play will put even more profits in your pocket. You will have the chance to profit no matter where gold prices go.

While I can only give these picks to a very small audience, you can be part of that audience right here.

The markets are highly volatile right now. Gold is a fantastic way to put some stability back in your portfolio.


Next Article: Currency Reversal: Could the U. S. dollar be the next safe haven?

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Posted by Andrew Snyder · Filed Under Gold and Resources 

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