Just before the close I established a small ~1% position in gold through the ETF IAU. Over the next few weeks I plan to evaluate the position and potentially increase the size. I have become more bullish on gold and have waded back into it for the following reasons:
(1) The significant pull back in the price of gold during the month.
(2) Potentially increasing risk associated with the middle east, Europe and the US economy, resulting in investors looking for the perceived safety of the precious metal.
(3) Potentially escalating aggressiveness in US monetary policy reactions should the economy appear threatened.
I remain concerned that gold may continue to slide should the US dollar strengthen due to weakness in foreign economies.
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