This is it!

Yes, this is the last trading day of 2005. What an exciting year it has been. As mentioned yesterday, gold has been a great performer for the year. I trust that most of you have profited from the rise in gold.

DROOY is trading at 1.48 to 1.50 today. It is at a good profit level for me. However, I am reluctant to sell. Too many times in the past, I have sold out a bit early and missed even greater profit, so I am holding tight for the time being. Of course, I try never to sell out completely.

The general markets have not given much profit this year. Even the commodities have tapered off some during the last few weeks. I believe this is temporary. By the way, requests for new mortgages and refinancing have declined substantially recently. Possibly, this is a signal that the housing boom is tapering off.

My plans are to stick with physical gold and silver (pre-1965 silver dimes), the CEF, and mining stocks. Notice that silver has run up percentage wise above gold during 2005. My favorite silver stocks are PAAS and SSRI.

For those of you own no mining stocks examine Newmont (NEM), which has proven to be one of the safest to own. I would buy for myself on substantial dips. However, I enjoy the risky business of trading with low priced mining stocks, like DROOY. The game is fun and can be profitable.

The Lord in His wisdom has given us seasons and events; such as, the new weeks, the new months, and, particularly the New Year. We meet for corporate worship on the first day of the week. Often, we ignore the first day of the month, except for the new bills which must be paid. The New Year is always a big event.

These are times for reflection and times to start out anew with even greater goals and greater faith in the Lord. He gave us these opportunities to start out fresh, but at the same time to profit from our mistakes of the past. Remember, we profit much more from our failures than from the successes. That is, unless we ignore the past and continue to repeat the errors of the past.

Let us spend time to profit from the past, make plans for the 2006, commit these plans to the Lord, and move out in the faith that He will work out His will in our efforts. His is the glory for any success and for His redirection through what we perceive as our failures. Each "failure" is a lesson for future.

After all, there is nothing that can separate the people of God from His love which is in Jesus Christ our Lord. We live with faith and full confidence in Him!

A blessed New Year to each of you as you grow in faith in our Sovereign Lord and Savior Jesus Christ.

Doug

Gold is Moving Upward Again!

On December 21st, I reported that I was buying DROOY and I was. Of course, I failed to buy at the low of about 1.30, but got mine at 1.32 and 1.33. DROOY has traded today in a range of 1.44 to 1.52 and is currently at 1.47. That is about 11.25% increase in just over a week. This is what can, and often does happen with these low priced mining stocks.

For those of you with little tolerance for volatility, the Central Fund of Canada trading under the symbol CEF may be more to your liking. It holds both gold and silver and the shares represent an investment in the bullion metals. This is one of my favorite ways to hold the precious metals and be able to trade rapidly should the need arise. Late May the CEF was trading at a low of about 5.10. From there it has risen with only one small set back to 6.70 or an increase of about 31.4% in the six months. That, too, is not too shabby. I'm not selling this holding as I consider it a core in my portfolio.

Last year at this time gold was about 440 and though it was pushing above 540 about mid December, it is at 515.40 as I write. That is also a nice gain for the year. What about the year 2006? That is the big question.

I believe we will see gold climb even higher. The Fed under Greenspan has been increasing the money supply and has left a legacy of inflation rather than recession. This seems to be the approach of all politicians and bankers. After all, to stay in power, governments and bankers have to have the economy look rosey on the surface regardless of the long term consequences.

During Greenspan's term and as a result of his actions, manufacturing in the United States has been greatly reduced and we, consumers have become totally dependent upon foreign products. Even our automobile industry has suffered as has been carried in the major media. Both General Motors and Ford are in what appears to be deep financial trouble from the foreign, mainly Asian competition.

This all leads me to believe that the glowing government reports on our economy are suspect. Thus, an ever greater supply of dollars will be necessary. Equally important is the continued readiness of foreign banks to purchase our debt.

2006 will be another interesting year. In fact, each and every year is interesting and presents us with challenges and opportunities which we must overcome or recognize and accept.

The key to long term success is a trust in the Lord, diligence in studying His word, and applying it in every area of our lives. With Him is the wonderful eternal life of the future; as well as, peace and joy during our remaining years here on earth.

I am praying for a blessed and wonderful New Year for each and every one of you. Find it submission to the Lord Jesus Christ and His word.

Doug

A Wonderful Time of Our Year

As we celebrate the birth of the King of Kings, the Lord of Lords, the Mighty God,the Everlasting Father, we also experience one of the most weird times for the markets. Our attention, and that of many traders, is directed, correctly, more toward the celebration than to the markets.

Gold has been bouncing between about 440 and 505 per ounce during the current correction. Is the correction over? It may be, but remember we are still in a weird market time. To fully resume its upward bull trend, gold would have to exceed 550. Why is gold seemingly in an extended bull rally? To answer this, we must examine some basic economic facts.

First, all currencies of the world are unbacked with anything other than the full faith and credit of the nations and central banks. They are legal tender, as our dollar clearly declares "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE." Thus,the value of each currency is based upon the coercive power of the government to force its use and the acquiescence of the people to use it. In the world market place, individuals seek to hold, as a store of value, the currency in which they have the most faith.

Second, since the currencies are unbacked pieces of paper, banks can create as much as they desire by lending to the governments, businesses, and individuals through the fractional banking systems of the world. Due to the law of supply and demand, the more there is of anything, the less is the value thereof. Thus, when more dollars are put into circulation, the value or purchasing power of the dollar is decreased.

With these two facts in mind, examine the mushrooming debt of our governments, businesses, and individuals. Billions and trillions of dollars have been created out of thin air to support this debt. Therefore, the dollars have lost a commensurate amount of purchasing power. Thus, it takes more of these abundant dollars to purchase an ounce of gold. So the price of gold is going upward.

Most people concentrate upon price inflation, incorrectly calling it "inflation." This is commonly measured by the government measured consumer price index. Price inflation is what we see as we shop for groceries and other needed items. However, inflation is truly an unwarranted examine of unbacked currency in circulation. The price of gold reflects this and not necessarily price inflation. In fact, both the price of gold and price inflation of most other items in our economy are a result of inflation of the currency in circulation.

It is my opinion based upon these facts that there will be an increase in the dollars in circulation with the lowering of their purchasing power for the foreseeable future. This is required to mask the outstanding debt of our nation.

I would suggest that your understanding of the these economic facts can be used to guide you as you build your portfolio of savings and investments. Gold and mining stocks should be a portion of every portfolio. The percentage of the that portion is up to you.

Study, make your investment plans, commit them to the Lord and depend upon Him for the success. Then worship and praise Him for His mercy and providence.

A blessed Christmas to one and all, Doug

I'm Buying DROOY

Gold at 491.50 and DROOY at 1.31. Both are a BUY for me. During this volatile trading season, it could go lower.

Perhaps, we will reach the "sell the farm" level to plow much into gold and mining stocks. I do not believe it is that time yet, but I increased my holding in DROOY today and will buy more if the price drops further.

The government reports on inflation show that there is very little. However, the USG has a vested interest in under reporting such statistics. Ask yourself about the level of inflation as you shop for groceries, clothing, and gasoline. Also, check on it as you pay your utility bills. Is it low? It does not seem so to me and we have just been put on notice by our utility to expect much higher gas and electric bills this winter.

The housing bubble seems to have gotten another shot in the arm as new home construction rose above expectations in October. The bubble in condominiums has started to lose air. This is the most fragile part of the housing bubble. Perhaps, residential housing will hold on a few more months.

Be sure to put the Lord first in your thoughts and actions as we celebrate His birth. God's basic unit of society is the family. Thus, it is very important that we seek to fellowship with our families. Let us share with one another the many blessing we have received from the Covenantal God of all.

Best to each, Doug

A Rough Ride!

This correction in gold, though necessary as a prelude to further advances, has given us great volatility in the price of gold. It had in the last 30 days been as high as 537.50 on December 12th. and as low as 487.60 on November 23rd. During the recent volatility, neither the high nor the low has been breached.

This is the Christmas season and many traders are taking it easy. Of course, there is likely a good bit of selling of losing positions in preparation for income tax. That is not a bad idea! Look over your portfolio and cull out the poor perfomers.

DROOY has traded from about 1.38 today to the current 1.32. It is in my cautious buying range. Be careful as it may move some lower with the current volatility. However, longer term this seems to me to be a good price if you do not hold any. Of course, the percentage of your portfolio across the various sectors of the markets and media will impact upon your personal decision.

Also, do not forget to check out CEF, the Canadian Fund which invests in physical gold. It is currently trading around 6.22 per share.

Let's all keep our eyes upon Jesus Christ during this season. He is our Sovereign Lord and Savior. Praise Him, thank Him, and always give Him the glory!

A blessed Christmas to one and all,

Doug

Well, here is the correction!

I believe gold is in a primary bull market, but the price move to $544 was too quick. The correction was due. I would hope that $500 would hold. This morning gold was as low as $509, but has returned to $511.30 as I write.

Mining stocks are not moving in concert with gold. This is true as gold goes up and, also, as gold goes down. There is just not sufficient interest in gold to move the mining stocks. When that interest develops, the mining stocks will move more rapidly than gold.

The Central Fund of Canada (CEF) which invests in physical gold has moved in concert with gold. Early November the price was as low as $5.62. It moved as high as about $6.66 on about December 9th. It is now at $6.25. It does track the price of gold quite closely. This is a closed in mutual fund which trades on the AMEX. I believe it is a convenient way to invest in gold. My preference is physical gold, but this is a close second.

DROOY is $1.41 now and was as low as $1.38 earlier today. It seems to be hanging into the $1.30 to $1.50 trading range. For a few days, $1.38 is the low.

Remember to study and make your own investment decisions.

Celebrate the Lord's Birth with corporate worship and family gatherings. In everything, we must give God the glory and enjoy Him forever. Remember true lasting joy comes only through having the King Jesus and your Lord and savior.

Best to each, Doug

Target 550?

It seems that each time I leave for a while, gold jumps upward. Maybe I should take more trips to help the cause.

Looking back at the price history for the last months up to about two years ago. Gold traded at a high of about $300, then $350, then $400, and now it has broken through $500 in a heart beat. During each of the periods, it corrected back some, but very seldom through the lower maximum. The central bankers seem to have had a significant impact on this price movement. They would talk it down with threats to sell gold and actually sold some at various times. Each of these devices impacted negatively on the price of gold for a time. However, at each step upward the bankers seemed to back off and allow the price to reach the next level. What is their new target?

I would suggest that there is a target of $550. In my mind this is nothing more than a guess. Hopefully, an educated guess. This target seems reasonable, because of the way the price rushed through $500. If my guess is accurate, the following target could be $650. What would you think of that price?

At the same time, we are seeing the mining stocks react rather slowly behind the price of gold. There is still a lack of interest in mining stocks even with gold above $500 (to $536 up almost $10 today). What price will cause the late comers to gold to join in the party?

My trading stock DRD Gold (DROOY) is up nicely to the high for the day >> $1.47. You might consider it on dips, if there are any. The recent trading range has been from about $1.31 to $1.48. I will buy more at near $1.31, but am not, presently, selling at $1.47.

Remember, you are the one most interested in your financial success. Study, learn, and plan. Then commit the plans to the Lord and move out smartly depending upon Him for the success or redirection.

We, Christians should rejoice at the impact Christ has had on Christmas. Whether others realize it or not, King Jesus is the reason for this joyous season. What an impact He has had!

Don't buy a "Holiday Tree". Buy a "Christmas Tree". Of course, my Christmas Tree is artificial. My children would prefer a dying tree (cut tree), but they are a bit too much trouble for me.

Best to each, Doug

Will Gold Hold Above $500?

The very rapid run up of gold price to over $504.75 (December 2nd) during last week gives some cause for concern. It closed the week at $502.90 and only momentarily touched below $500 briefly during one day.

One has to wonder if the $500 price will hold. I am enough of a contrarian to believe that there could be a correction. In fact, a correction could be a needed prelude to further highs in the very near future. This would be another great buying opportunity for us.

It is important to remember that gold has historically been real money. It was so back in biblical times and has been until governments and banks found that paper legal tender would be considered as money by the naive populations. Then they advanced to the fractional banking system which enabled banks to keep only a small percentage of the deposited cash and to create additional currency out of air to lend to the naive.

Through this mechanism, the United States government has accumulated a funded debt of over $8 Trillion and has a total debt approaching some $40 Trillion. These levels of debt have never in the past been seen. Some time, the piper will have to be paid. When is the big question. We are not alone in this madness, as all other nations and central banks have joined in this questionable party.

The masses have yet to recognize what has happened to paper currency and they are still in love with it. Once they do, real money will be the media to which they will turn. However, one must wonder if all the present news on gold will force a correction before it moves on upward. This is a likely event. We will have to wait and see how it plays out in the near term.

The future is completely in the hands of the Sovereign God of all. He determines the future, but we are to use our god-given brains for contingency planning. It is wise to study the political and economic situation into which God has placed us. Then we are to make our plans and commit them to the Lord for the outcome. The results are totally up to Him. Regardless of the results He provides, we are to be thankful and give Him the glory.

Best to each, Doug