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Not only are we still bullish on the prospects for gold and gold stocks, our
outlook has been vastly boosted by the overwhelming optimism shown in recent
months. Remember, gold is storming out of a bear market that endured for 21
years. The phrase "pent up demand" applies and in spades, at that. Even when
gold bulls measured over 90% and most were calling for a correction on what one
would have to admit was a sound contrarian basis, the metal not only remained
firm but rose sharply again, until very recently.
There seems to be much more to this market than meets the eye. Despite the
many stories in recent weeks about commodity bubbles in oil, metals and
particularly gold, we see this interest as a groundswell move, recognition that
demand for oil and metals is going to increase quite dramatically in the decade
ahead. We believe this recognition is just beginning.
Our inflation adjusted chart clearly illustrates that gold's bull market
commenced coincidentally with 911. Some observers
have pointed out that the world changed with the terror attacks on the World
Trade Center, and it has. But in more ways than one. The Twenty-First Century
has brought the Chinese economy into view as a new superpower that will someday
easily exceed the influence of the U.S. And where China leads, India will
eventually go. Between the two countries, three of every eight people on the
face of the planet harbor the same wishes for the same goods and services
enjoyed by Americans. The theme for the decade ahead is demand, demand and more
demand.
 
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