By Gareth Soloway on June 7th, 2010 1:46pm Eastern Time
Gold continues to soar. The massive printing of money will ultimately make gold go higher and higher as the one true universal currency. SPDR Gold Trust (NYSE:GLD) is up another $2.01 (+1.69%) today. While gold gets more expensive almost every day, oil may just live up to its name as black gold and be the next store of safety and value.
In the next 10 years, there is little disagreement that oil demand will rise. China, India and other major emerging markets are using more and more each day. The fully developed world may be using slightly less due to the global slowdown and the major European issues right now, but that may just be the buying opportunity we have all been looking for. There is little doubt that in the next 10 years oil demand will only increase. This current global slowdown may last for a year or two but eventually countries will emerge. In addition, with Europe and the United States printing money by the trillions, a commodity like oil will rise in response, just like gold. The other benefit to oil is that it has true use. While gold is just a monetary denomination, oil is needed. This also gives it a safety side that gold may not have.
The key plays to look at will be stocks like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX) and even beaten down drillers like Transocean LTD (NYSE:RIG) and Anadarko Petroleum Corporation (NYSE:APC). There are many others as well. The key is to look for the first hint of inflation. As of now we are stuck in a deflationary environment. That means there is little near term risk of oil skyrocketing until global demand picks up. However, I expect that once global demand picks up, it will be a two headed monster as inflation will run wild as well. Once that happens, oil will act just like gold and run higher. $150 per barrel is a forgone conclusion in my mind. Most likely even higher when all is said and done. For more information, trades, guidance and education, join the Research Center.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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