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Message:: [QUOTE="Smitty, post: 1338718, member: 35044"]One reason and one reason only ... to offset the devaluation of your dollars. The next obvious question is "How do I figure out if and when the dollar will devalue?" Well,  that's a little bit tougher. But in general terms, the theory is that  as long as they keep printing money the dollar will go down and gold  will go up. That doesn't mean the dollar won't go up intermittently. <a href="http://bespokeinvest.typepad.com/.shared/image.html?/photos/uncategorized/2007/12/06/dollargold1.png" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://bespokeinvest.typepad.com/.shared/image.html?/photos/uncategorized/2007/12/06/dollargold1.png" rel="nofollow">This chart</a> shows how the dollar and gold usually work in an inverse pattern. If you really want to understand what influences the gold market you'll need to  study monetary policy, money supply, how politics influences markets, who's doing what  in the precious metals market, human psychology, interest rates, and COMEX policies. The  easy way is to just be a gold trend follower and get out when the trend  changes. Pure trend followers tend to be wrong a lot near market  turning points, and they can get whipsawed out of their position easily,  especially in markets as volatile as precious metals, but can hit it  big when they join the trend at the right time. Personally, I've  bought and held gold for the past 4 years. I'm not going to try to time  this volatile commodity. However, I will keep buying a small amount of  gold on the dips (depending upon what's influencing the dips) until interest rates peak.[/QUOTE]

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