Alex’s Notes: This is a development I find particularly interesting.

Usually a secular bull market has three main phases.

Phase 1 is sophisticated investor buying.

Phase 2 is when institutions come in to play.

Phase 3, and final phase, is when “mom and pop” come in to play, which usually is when there is a top and its time to sell.

We have been watching for this Phase 2 activity for some time, and it looks like it may have arrived.

***

Excerpt from Bloomberg article:

Greenlight Capital Inc., the $5.1 billion hedge fund based in New York, said earlier this month it was buying gold and gold- mining stocks for the first time as protection against the Federal Reserve’s attempts to revive the U.S. economy by devaluing the dollar.

“Our guess is that if the chairman of the Fed is determined to debase the currency, he will succeed,” Greenlight said in a Jan. 20 letter to clients. “Our instinct is that gold will do well either way: deflation will lead to further steps to debase the currency, while inflation speaks for itself.”

Eight years of gains for the metal is the longest winning stretch of the 19 commodities tracked by the Reuters/Jefferies CRB Index.

Gold futures for April delivery rose $16.50, or 1.9 percent, to $906.50 an ounce today on the New York Mercantile Exchange.

Full Article

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