Here we go again!

Whenever there's a Gold price break, the media proclaims the "end is nigh" for the 10 year bull market. Yet Gold always recovers and moves higher.

As seen in chart to the right, for 2010 to date, there have been nine Gold price slippages, varying in size from -12.3% after record high on 12/2/09 to a minor -2.9% in early May.

Gold has pulled back -4.5% from its $1,249 high, and investors should "get a grip". This is normal trading, and two facts should be kept in mind:

1) The media has a vested interest in seeing Gold fail, and will disparage the Metal forever. If the media ever concluded the truth, that Gold is the answer to the growth and inflation protection that investors need, there'd be no need for the stock market TV networks. This would mean many fewer jobs for the talking heads at CNBC, Fox Business, et al, and a lot less advertising sold.

So the media is "talking their book" when maligning Gold. They refuse to consider its record since being freed from $35 in 1968, and they continue fixated on its $850 one day blow-off high in 1980.

As the chart shows, if Gold had simply kept up with inflation since freed from $35/oz in Mar-68, it would now be at $225/oz. But in fact, Gold has gained over 4X more to $1,193/oz, protecting investors from inflation and yielding a return 4% above the CPI!

(As an aside, Editor was recently asked how Gold did versus the S&P500 did over the period. It's not on the chart, but S&P500 began the period at 89.11 and closed yesterday, 43+ years later, at 1115.05... a 6.05% compound rate of return. Over the long term, Gold has trumped stocks and inflation.)

2) The US Treasury will run $1+ Trillion deficits forever and the Fed will continue keeping interest rates low until well after the unemployment rate, 9.9% in April-10, begins to shrink. Many US states teeter towards bankruptcy. The Euro nations' budgets are all in deficit and the ECB is papering over their debt with $1 trillion of its own to bail out the PIIGS. Japan is an economic basket case with no growth and no ability to pay its aging population the benefits due (an early look at the US's coming problem). Governments world-wide have only one choice: Inflate the debt burden away, that's what we'll get.

We see the future clear for Gold. But in the short term, Gold stocks are stocks first and secondly derivatives on the Metal. When buyers disappear for all stocks, the falling broad markets take the Golds lower. The best protection is to keep some money aside for buying opportunities. Our many new subscribers can benefit from the "scale in" approach we suggest, and all can take advantage of the Top 10 being on sale.