Moneynews. Written by: Dan Weil. Mar. 2, 2011. View Original Article
Stocks struggled Tuesday, while oil soared. But not to worry, says CNBC’s Jim Cramer, investors have a way out of this – buy gold, especially before it soars to $2,000.
“I can’t emphasize enough that gold is your antidote here to what’s going on,” he says.
“What’s interesting is this is really the first genuine deviation day where the oil companies are just getting killed,” he said Tuesday.
It feels like 2008, when the surge in oil prices pushed oil stocks down, Cramer says. “This is the nightmare scenario that the bears have been looking for.”
“Gold is extraordinarily poised to be able to go up better than every other asset in the world,” he says.
With interest rates low and stocks starting to drop, gold is “exactly what you should be in,” Cramer says. “I think you can see $1,550 (an ounce) very quickly and $2,000 within the next 18 months. I think between 10 and 20 percent of your portfolio should be gold.”
In terms of gold mining companies, Cramer favors Goldcorp because of its lower production costs.
Spot gold was bid at $1,432.90 an ounce early Wednesday, down from $1,433.70 late in New York on Tuesday, having peaked that day at an all-time high of $1,434.65.
Others are bullish too. “Spreading tensions in the Middle East have prompted gold safe-haven buying,” Mark Pervan, an analyst at ANZ Banking Group, wrote in a report obtained by Bloomberg.
Rising oil prices have “fueled concerns over inflation and rising costs, boosting gold’s inflation hedge appeal.”