Gold & Silver
Gold briefly broke below $620 to a low of $615.30 yesterday, but hit a high of $627.80. Thus, $620 remains as a short term resistance level. It is now at $624 and seems to be taking a breather before move in any direction. It could well be headed upward again, since the dollar continues to be under pressure.
Silver's low was $12.48 yesterday and high was $13.11. On the 1-year graph, silver peaked about the same time as gold did, but did not have as drastic a correction as gold. It also broke the trend of lower highs about the same time and remains positive. Both gold and silver have had a time of consolidation for the last few days. Time will tell if the breakout from here will be upward.
The dollar is still threatened by the reapportionment of central bank reserves out of the dollar. I expect the movement to be slow and very cautious with each bank attempting to discover what every other bank is doing. At some point in time, one of the banks is likely to make a large shift away from the dollar. Every bank is anticipating this and will be using all of their intelligence resources to detect any such action. No bank wants to be left holding the bag of worthless dollars if one major player dumps dollars.
A gradual shift from dollars favors us, too. A dramatic shift by one or more banks, would send the dollar to the trash heap. As long as the dollar remains the reserve currency for the world and is used internationally for most trade, it will have some purchasing power, although diminished.
There remains from the Greenspan era a vast amount of liquidity in the market place. That is the reason for the succession of highs in the DJI average. I believe the market to be topping out and in for a substantial correction before long. The prices of stocks in the general market have escalated beyond reason, except for the liquidity. Dividends on general stocks are very low, too. The liquidity has to go somewhere, and since the real estate bubble is deflating, the general stock market is the choice. But this is a dangerous overbought market which may temporarily go much higher before dropping, but it will drop. Timing is everything! However, it is best to be one of the first in the life boat rather than the last when there is no room left. Thus, to preserve wealth, the precious metals and mining stocks are a realistic life boat.
What lies ahead in the Mid-East Wars will be interesting to observe as it plays out. There is much discussion on beginning to withdraw some troops here at home. Those on the ground continue to argue that there are not enough troops there to continue the rather un-defined mission. Reminds me of the story about the tar baby. We are nestled rather uncomfortably on the horns of a dilemma. To withdraw will be to "lose face." And to stay will cost more in dollars than we can afford, and more importantly, will cost many more lives ours and theirs. I believe the saving of lives is more important.
I am very pleased that I do not have to make the decisions. Also, I am very thankful that the Triune God of all is in full control and working all of what we see as problems out in full concert with His Sovereign Will. Also, we rest in the fact that ALL THINGS are being worked out by Him for the eventual good of HIS PEOPLE - the New Jerusalem = His Church.
Best to each, Doug
Silver's low was $12.48 yesterday and high was $13.11. On the 1-year graph, silver peaked about the same time as gold did, but did not have as drastic a correction as gold. It also broke the trend of lower highs about the same time and remains positive. Both gold and silver have had a time of consolidation for the last few days. Time will tell if the breakout from here will be upward.
The dollar is still threatened by the reapportionment of central bank reserves out of the dollar. I expect the movement to be slow and very cautious with each bank attempting to discover what every other bank is doing. At some point in time, one of the banks is likely to make a large shift away from the dollar. Every bank is anticipating this and will be using all of their intelligence resources to detect any such action. No bank wants to be left holding the bag of worthless dollars if one major player dumps dollars.
A gradual shift from dollars favors us, too. A dramatic shift by one or more banks, would send the dollar to the trash heap. As long as the dollar remains the reserve currency for the world and is used internationally for most trade, it will have some purchasing power, although diminished.
There remains from the Greenspan era a vast amount of liquidity in the market place. That is the reason for the succession of highs in the DJI average. I believe the market to be topping out and in for a substantial correction before long. The prices of stocks in the general market have escalated beyond reason, except for the liquidity. Dividends on general stocks are very low, too. The liquidity has to go somewhere, and since the real estate bubble is deflating, the general stock market is the choice. But this is a dangerous overbought market which may temporarily go much higher before dropping, but it will drop. Timing is everything! However, it is best to be one of the first in the life boat rather than the last when there is no room left. Thus, to preserve wealth, the precious metals and mining stocks are a realistic life boat.
What lies ahead in the Mid-East Wars will be interesting to observe as it plays out. There is much discussion on beginning to withdraw some troops here at home. Those on the ground continue to argue that there are not enough troops there to continue the rather un-defined mission. Reminds me of the story about the tar baby. We are nestled rather uncomfortably on the horns of a dilemma. To withdraw will be to "lose face." And to stay will cost more in dollars than we can afford, and more importantly, will cost many more lives ours and theirs. I believe the saving of lives is more important.
I am very pleased that I do not have to make the decisions. Also, I am very thankful that the Triune God of all is in full control and working all of what we see as problems out in full concert with His Sovereign Will. Also, we rest in the fact that ALL THINGS are being worked out by Him for the eventual good of HIS PEOPLE - the New Jerusalem = His Church.
Best to each, Doug
posted by Doug @ 9:05 AM
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