Gold Remains Undervalued vs. the Dollar

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Mark O’Byrne May 11, 2009 | about stocks: GLD / SLV

Gold and silver prices rose last week (gold was up 3.1% and silver rose sharply by 11.6%) as the US dollar fell sharply and broke down technically and US bonds continue to sell off aggressively.

Stock markets remained sanguine as ever and continued on their merry way despite valuations looking very ripe and the recent bear market rally looking long in the tooth.

Ostensibly the data was positive last week leading to more “green shoots” speculation but the jobs data was actually poor (previous months jobs number was revised upwards - March Nonfarm Payrolls revised to (699K) vs. prior (663K) - and much of the jobs were Bureau of Labour Statistics (BLS) imaginary jobs created through hedonic adjustments and the Birth/Death model magically added 226,000 jobs to the April employment report based on huge assumptions which are likely erroneous).

The fundamentals of the US economy are poor and deteriorating with Alt A, jumbo, commercial property and credit card debt to create the next wave of the financial crisis.

Gold Remains Undervalued vs. the Dollar -- Seeking Alpha

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