Will Gold Rally Continue ?

Extract of article by Larry Edelson: Fed's Liquidity Gusher Seeks Inflation, Gold Will Rise further:
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On 12th October 2010 release of its September Federal Open Market Committee minutes, the USA's Fed officially announced that ...
"Unless ... underlying inflation moved back toward a level consistent with the Committee's mandate, they would consider it appropriate to take action soon." The Fed is considering "... possible steps to affect inflation expectations" and "targeting a path for the level of nominal GDP."

That's Fed-speak for a MANDATE TO CREATE INFLATION — with lots more money printing, and many more purchases of Treasury bonds, mortgage bonds, corporate bonds, commercial paper, even possibly equities or real estate!

No wonder the dollar is crashing toward new, all-time lows against ALL major currencies! .

Instantly after the Fed's meeting notes were released, the dollar started plunging again — to fresh record lows against the Swiss franc ... to nearly a new 15-year low against the Japanese yen ... and another record low against the Australian dollar. The dollar even fell to a 13-year low against the Thai baht!

And no wonder gold is soaring — again!

Overseas investors are clearly running scared of the endless supply of dollars the Fed will be printing ...So they are buying gold, hand over fist. Meanwhile, savvy domestic investors are also gobbling up gold, driving gold trading volume to record highs ... Piling into every conceivable gold investment under the sun — from gold coins and bars ... to mutual funds ... to gold ETFs ... and gold futures contracts.

Hardly surprising when you consider the dollar's downside fate is now virtually sealed ... that the Fed has officially admitted that it will take any measures it deems necessary to devalue the dollar and boost inflation — no matter how unorthodox those measures may be. Adding fuel to this fire ...

What to do now:

First, I feel you absolutely must hold a long-term core position in gold regardless of any short-term fluctuations. The most handy vehicles: Gold ETFs like GLD.

Second, if gold suffers a temporary correction — which would be completely normal — use it as a buying opportunity to ADD to your core gold holdings.

Third, for those who have interest in foreign currencies, one good choice is the Australian dollar.

The dream run of gold is set to continue. Thanks to FED.