Ever Thought of Trading Gold And Currency Futures?

Look at a gold futures chart, and you’ll see that the price of this “safe haven” investment has moved considerably higher the past five years. Can the market reach $500 or $600 per ounce? If this were to happen, the global economy would likely find itself in the midst of a serious geopolitical conflict or facing the prospect of runaway inflation. During the last major gold bull market, precipitated by the Iran hostage crisis in the late 1970s, both factors combined to propel gold from $300 to more than $800. If you think gold’s headed higher, the obvious play is to buy gold futures or call options. But are there other opportunities?

Switzerland’s longtime political neutrality as well as the fact that a significant percentage of its currency reserves traditionally has been backed by gold means that no major currency is considered to be as safe and stable as the Swiss Franc. In fact, if you were to compare charts of gold and the Swiss Franc, you’ll notice that the Swissie’s rise since mid-2001 correlates almost perfectly with the rally in gold. So, if you expect a rally in gold, you might also consider establishing a long position in Swiss Franc futures.

Canada and Australia are worth mentioning, too, since both countries possess substantial reserves of the precious metal and have very strong and well-developed mining sectors. Australia was the number two gold producer in 2004, accounting for more than 10% of worldwide production, and mining represents approximately 5% of its GDP. With respect to Canada, gold is its single most important mineral in terms of production value, and mining accounts for more than 4% of GDP. If the price of gold maintains its uptrend this year, both the Australian and Canadian currencies could follow its lead. Read More....