Gold and Metals Signaling Trouble Ahead

The more I think about the increase in the price of gold and the other metals the more it makes me wonder where the US market is going. Roberto over at Nasdaqtrader has been bullish on gold for sometime and hints the rise in gold to a future world conflict (Iran, North Korea, terrorist attack...). I would pay more attention to unusual put/cat volume in the airlines, gold stocks, and insurance stocks. Roger Wiegand also has an interesting view on the metal stocks. His article is worth a read.

The $9 trillion dollars in US debt and the Fed policy would not make me a buyer of bills, bonds, or notes. The US in my opinion cannot afford to get involved in another war. We would need significant financial support from other nations. If we were to engage in another war I believe the US dollar will weaken significantly.

All this makes me a buyer of gold. If we can get a pullback in the metals I would be a buyer of Silver Wheaton (SLW), Goldcorp (GG), Bema Gold (BGO), or Northgate Minerals Corp. (NXG). I believe Northgate is one of the most undervaled metal stocks on the market. I already have over 27% of my portfolio in three metal stocks (BGO, TIE, & SLW).

Mining for uranium? Take a look at Fronteer Development Group (FRG)

I currently own shares of Bema Gold (BGO), Silver Wheaton (SLW), and Titanium Metals (TIE)