The Correction Continues
For 24 hours, gold hit the high of $611 yesterday morning at 10:43 and a low this morning of $581.80. It has bounced off the low to $584.80 at present. The 200 Day Moving Average is approximately $544. The present correction has pushed the price closer to this average.
The Privateer said Friday that the Central Bankers of the world have begun to recognize price inflation that each of us has seen for several months. To combat that, interest rates are being raised by Asian and European banks "to combat price inflation."
This apparently is having two impacts: (1) Individual investors recognize the increase in prices at the stores and begin to cash out of paper assets to gain liquidity to meet cover the increased costs and (2) The increased interest rates attract cash from the low dividend paying stocks (paper assets) of all types into money market accounts and other higher paying instruments.
Liquidity is no longer available at "bargain" prices (interest), so it is obtained by the exodus from paper assets. The DJI is well below 11,000 to about 10,781 now and most other world markets are down substantially.
The debt level of consumers, businesses, and governments in the U. S. is so great that most have reached the end of their borrowing capacity.
The summer doldrums continue with a vengeance. We must weather the storm. As with all other corrections, this one will end and the liquidity will be flowing into gold and mining stocks again. The real question is when? I do not have that specific answer.
With the mining stocks in, what I consider, good buying range, one could cautiously begin adding to his holdings. Look at DROOY 1.16; HMY 12.49; IAG 7.99; KRY 2.64; NEM 47.90; NTO 3.93; RNO 1.69; SSRI 17.15; XVE 6.48. Even CEF 7.79. Use caution and buy very slowly if you do. Use funds for which you have no immediate critical need.
There will not be another post until this week end as I will be out of pocket. Hang tough on your holdings.
Look to the Lord for the only true security. Depend upon Him for the results, but do the best you can. Then praise Him for His blessings!
Best to each, Doug
The Privateer said Friday that the Central Bankers of the world have begun to recognize price inflation that each of us has seen for several months. To combat that, interest rates are being raised by Asian and European banks "to combat price inflation."
This apparently is having two impacts: (1) Individual investors recognize the increase in prices at the stores and begin to cash out of paper assets to gain liquidity to meet cover the increased costs and (2) The increased interest rates attract cash from the low dividend paying stocks (paper assets) of all types into money market accounts and other higher paying instruments.
Liquidity is no longer available at "bargain" prices (interest), so it is obtained by the exodus from paper assets. The DJI is well below 11,000 to about 10,781 now and most other world markets are down substantially.
The debt level of consumers, businesses, and governments in the U. S. is so great that most have reached the end of their borrowing capacity.
The summer doldrums continue with a vengeance. We must weather the storm. As with all other corrections, this one will end and the liquidity will be flowing into gold and mining stocks again. The real question is when? I do not have that specific answer.
With the mining stocks in, what I consider, good buying range, one could cautiously begin adding to his holdings. Look at DROOY 1.16; HMY 12.49; IAG 7.99; KRY 2.64; NEM 47.90; NTO 3.93; RNO 1.69; SSRI 17.15; XVE 6.48. Even CEF 7.79. Use caution and buy very slowly if you do. Use funds for which you have no immediate critical need.
There will not be another post until this week end as I will be out of pocket. Hang tough on your holdings.
Look to the Lord for the only true security. Depend upon Him for the results, but do the best you can. Then praise Him for His blessings!
Best to each, Doug
posted by Doug @ 9:16 AM
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