Top resource ideas: Gold and silver from the Aden sisters

Posted Nov 10th 2007 4:10PM by Steven Halpern
Filed under: Newsletters, Silver Wheaton (SLW), Silver Standard Resources (SSRI), Commodities, Stocks to Buy

This article is part of a 20 article special report on "Metals, miners and money".

"Gold's recent move to a new highs clearly reinforces that the metal's six year bull market is alive and well," say leading resources experts Mary Anne and Pamela Aden.

In The Aden Forecast, the sisters -- who have accurately forecast the bull market since its start in 2001 -- explain why they believe this upmove is part of a mega-trend that will last for many years to come.

"As the dollar falls further, gold will continue to head higher. And the unprecedented trade deficit nearly guarantees that the dollar will continue to slide. Lower U.S. interest rates reinforce this as well, and again that'll be good for gold.

"Meanwhile, U.S. dependence on foreign oil and the record high oil price means the trade deficit is going to stay huge. It'll also contribute to inflation by keeping upward pressure on consumer prices.

"So in a way, it's a vicious circle that goes something like this: high oil = large trade deficits = a weak dollar and high inflation. Spending and money creation = inflation, which all = higher gold.

"Not to be pessimistic here (remember we're just giving you the reasons why gold is rising and the dollar's falling), it doesn't help that 70% of the top oil producing countries are either tense or unfriendly toward the U.S.

"This makes the entire oil picture a wild card. In other words, growing tensions, talk of war, and ultimatums will push the oil price up and it'll keep upward pressure on gold too.

"China's growth and its booming economy is another huge factor that will continue to drive all commodities higher in the years ahead, as demand for everything keeps soaring. The same is true of India. This all amounts to a once every century or so development and it's changing the global picture as we know it.

"When gold first turned bullish in August 2001, we identified steps for the new bull market. The steps began to develop as the 1999 and 1990-96 prior peaks were surpassed. The big moment for the bull market was when gold broke above the $500 level in December 2005.

"This took gold into the fourth and final step, which is where it's been trading since then. This reinforced that the bull market was solid. With gold now at levels last seen in 1980, gold is on its way to completing this step.

"Once it rises above $850, the fourth step will be complete and that'll be the next big milestone. Gold will be at a record high and it will then enter a new super strong bull market phase.

"From there, it could eventually move up to $2,000+, which is near the top of its mega trading channel that began in the late 1960s. While that may sound extreme, that level is about the same as $850 was in 1980 in inflation-adjusted dollar terms.

"We now advise increasing your gold position to 40% of your portfolio. We think silver is ready to catch up to gold and is a good buy now.

"Among our core positions, we continue to recommend gold exchange-traded funds such as StreetTracks Gold Trust (NYSE: GLD). Among individual gold shares, the strongest is Goldcorp (NYSE: GG). Among silver stocks, the best positioned are Silver Wheaton (NYSE: SLW) and Silver Standard Resources (NASDAQ: SSRI)."

Each day, Steven Halpern's TheStockAdvisors.com website features the latest investment commentary and favorite stock picks of the nation's leading financial newsletter advisors.

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