Dollar Slips, so Gold Benefits

Now it takes more dollars to purchase gold and other items we need. Not because the price has increased, but because the dollar has lost purchasing power. Thus, we are using gold to preserve our wealth and protect us from further depreciation of the dollar. Even central banks are seeing this and taking action to preserve their currency wealth.

Central Banks are diversifying their reserves out of dollars. UAE plans to cut dollars by about half; the Swiss bank raised its holdings of yen and decreased dollars last month, and Russia seems to be headed for an increase in yen. Is this the prelude to an escape from dollar reserve by central banks or just a few getting ahead of the mass exodus? Time will revel the answer to us.

Gold is holding much higher than in recent weeks. It has stayed mostly above $600 and is now at $613.90 down a bit from a high of $616.90. The move seems to be quite strong, and is likely a precursor of a big upward movement after the election.

Nevertheless, I suggest 10% trailing stops on a portion of your mining stock holdings. As always, I hope these stops will not be hit for a significant time in the future. However, they are good insurance against a big correction. Remember, the trailing stops follow price rises and are not executed until there is a fall back.

All results of our investment and all other plans are in the hands of the Sovereign Ruler of all. Commit all plans to Him and give Him the praise for the results.

Best to each, Doug