The "news" is the near-$100 per ounce decline in gold over the past month. This price weakness has a lot of investors stressing out and searching for an explanation for what's happening to the No. 1 form of "real money." Here's why stressing over the decline is crazy…
Remember, gold is one of the world's most volatile assets. The metal cannot be valued like a piece of real estate (using rental yields) or a share of stock (using book value). It can trade on all kinds of wild emotions. Thus, huge gold price swings have proven to be the norm… not the exception.
Given gold's volatile nature and the recent price weakness, we again urge folks to take "long view" (aka the "rich man's view") of gold… and note that gold could fall all the way down to $900 per ounce and still remain in the confines of its bull market. It would also be a wonderful chance to buy more.
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