Gold Mid-Year 2008 Review

11 July 2008

An update by John Hathaway

Gold and gold shares continue to be in a consolidation phase since the dramatic rescue of Bear Stearns by JP Morgan Chase at the end of the first quarter. Credit and capital market stress continue at a high level as evidenced by the weak performance by financial sector shares during the first half of 2008. Such concerns tend to drive capital market flows into safe haven areas including gold. Following the current pause, we expect gold to achieve new highs later this year. We believe that gold shares are awaiting leadership from the metal itself. Once gold attains new highs, we believe the shares will break out of their consolidation mode. The $1000 per ounce threshold for gold is at present a psychological barrier for investors. Once that level is viewed as a floor rather than as a ceiling, we expect a significant rerating of gold shares.

There are several reasons why gold should still have considerable upside...”

Click here to view the whole article.


John Hathaway 
9 July 2008