More on Dubai & Gold

First, Dubai (UAE) seems be the best friend we have in the area. Our Navy uses their ports, and our Air Force refuels plans there. They also supply some 8% of the oil in the region. Their history of port management is reported to be very good. Security, such as we have in our ports, will still be our responsibility we are told. So after all, hiring them to replace the current British port management firm looks to be OK. However, I regret that once again from the White House, we hear only "Trust me!" How far can any politician be trusted? A lot of negative reaction to this plan could have been avoided had the full story been told.

Gold ended last week up fairly nicely. For the last 24 hours the high was $558.60 at 7:06 last night and the low $552.70 this morning at 9:40. It is now $553.40.

Some prices: CEF $7.63; DROOY $1.43; HMY $14.86; NEM $55.80; SSRI $16.91. Most are hanging in pretty well while we wait for the "gold rush." When is any one's guess.

Iran is still planning the oil market in EUROs in about two weeks. Will it happen? I believe it is likely, but plans often fail to materialize. If it comes in, there will be a negative effect upon the dollar and a positive affect of the EURO. This would be a first, and if successful, would be followed by more.

The Yen is gaining some and would gain more if there is a follow through with higher interest rates there. The possibility has been mentioned in the news.

For me and my way of approaching the current markets, I see the general market at levels which it will not maintain for very long into the future. I believe precious metals are the safest investment for the time being, second to them, I like the CEF Central Fund of Canada which invests in gold and silver bullion, and for leverage, I prefer the mining stocks. Many of the mining stocks have options available and for those of you more adventurous, the options are a way to trade. Educate yourself and make your own decisions. As always >>> BUYER BEWARE!

The future is certainly in God's hand, but He gives us wisdom as we seek to know Him better and learn to fear Him and bask in His love. He does not want us to ignore either the past or the future, but to depend upon Him for success in every aspect of temporal and eternal life.

Best to each, Doug

A Slight Increase Today

Well, gold went from a low of $547.10 yesterday evening at 7:43 to a high today at 1:15 of $559.40 and closed out the day at $558.40. Much of the time was spent above $550 and it closed nearer the high.

Some late prices: DROOY $1.46; HMY $15.34; NEM $57.97, and SSRI $17.47.

Another week has gone and the month is leaving us after Tuesday. The civil conflict in Iraq continues, as does the saber rattling about Iran. Also, the "pressure" on China to revalue the Renminbi continues. By the way, the Renminbi moved up to a new high over night. Every little bit helps, if you are into currencies, particularly, that one! Dubai has decided not to take over our 6 eastern ports and 2 Gulf ports for a while to allow President Bush time to settle the opposition in Congress. General. Pace, Joint Chiefs of Staff praises Dubai for its support of US by offering bases and allowing US to operate from them. That could be the reason behind the port deal.

We are moving into the time of the year in real estate when thoughts of moving up or remodeling often race through the heads of home owners and potential owners. As the real estate boom seems to be topping out, it will be interesting to see how it turns out this early spring.

The dollar has been holding up for a week or so, but seems under some pressure today. Iran is to open their oil trading in EUROs about the middle of next month and there are rumblings from others who would like to do the same. Will they or wont they? If it happens, that will put more downward pressure on the dollar.

Once again, we are looking forward to the weekend and the joy of worshiping the Lord and fellowshiping with His people. I would invite you to do the same. As Scripture tells us, "Not forsaking the assembling of ourselves together, as the manner of some is; but exhorting one another; and so much the more, as ye see the day approaching." (Heb. 10:25) I believe this, at least in part, refers to the joining together of the people of God for worship each Lord's Day.

Have a great weekend, even though it is only for two days -- not the three of last weekend.

Best to each, Doug

Uncertainty Reigns

More news to add to uncertainty of markets. Problems in Nigeria add to oil concerns. There is attempt to blame the Iraq Mosque bombing on Israel and US by Shiites. Bet we didn't do it! Today's headlines say Iraq is being pushed toward civil war, as the Shiites are angry over the bombings and attacks there.

Gold is still struggling around the $550 level. It is interesting that there was another spike down to $550.60 today at 10:07 NY Time. That is similar to yesterday. It is currently trading at $551.50.

DROOY is down to $1.40 this morning. That looks very inviting to me!

James Turk has an interesting Founder's Commentary at Goldmoney.com. He presents a chart using a ratio between gold and silver. The chart is neat! I suggest you read the short article and examine the chart. There is often good information on the site.

The economic propaganda (some call them "reports") from the government seem designed to deceive more than to inform. The reports show little price inflation. I guess with the level of income that is enjoyed by those in power, they cannot recognize the price inflation we see daily at the gas pumps, malls, and pharmacies, as well as in our utility and property tax bills. Perhaps, it would be better if they did actual shopping rather than use the electronic crystal balls.

You might check for airline tickets, if you plan to travel soon. SW Airline is now accepting reservations through August 3rd. Other airlines must be doing the same. One can almost always save substantially with advance purchase. Look into the opportunity from time to time.

Make your day great! Start with the Lord and keep in touch all day long. It will put a smile on your face in spite of challenges He brings.

Best to each, Doug

Volatility Everywhere

The volatility continues in the general market, as well as in the precious metals and mining stocks. Oil bounces up and down, too. There is much uncertainty in the markets today. That makes for more volatility.

We are still trying to settle the Iran situation. The dollar has bounced up a bit against the EURO. Even the Islandic Krone has been hit some. Also, the pressure for Chinese upward revaluation of the Renminbi. Another car bomb at a mall in Iraq added fuel to the market fire. Harmony (HMY) and DRDGold (DROOY)are in court against price gouging in steel. Apparently, there are other companies involved.

Gold has been above $550 since Friday of last week until it dropped to $547.80 this morning at 10:47 NY Time. The high for the last 24 hours was $555.60 yesterday afternoon at 12:32 NY Time. The low this morning was a spike down and it is back up to $552.20 now.

DROOY is at $1.50; HMY $15.66; NEM $57.04; SSRI $17.08.

Nothing earth shattering so far.

Best to each, Doug

God Uses Life's Challenges for Our Growth

Over the long week end, gold moved a bit higher and is on a higher plateau than last week. The high for the last 24 hours was $556.20 at 9:52 a.m. and the low was $550.80 at 10:54 p.m., both yesterday and at NY time. Gold is currently at $554.90, so it is, far the time being, holding nicely.

The Iran situation continues to be of concern. Our support of the secular nation Israel, primarily, caused by the concern of many dispensational fundamentalist is contributing to our mid-east challenges. The number of attacks on our troops in Iraq is escalating. It is important to keep our troops in our prayers. Don't forget their families back home.

DROOY is higher today with the last trade up $0.04 at $1.54. SSRI is up $0.38 to $16.48 and CEF is up $0.18 at $7.60. I believe it is not too late for those who have hesitated to get in. Last week, I bought several batches of DROOY as the price went down. The downside risk does not appear to be great from even this level. Study and make your own decision. What is right for me may not be correct for you.

Congress is, as is the White House, still threatening China to raise the value of the Renmimbi. They must really be after a lower valued dollar. The money supply continues to expand in spite of the increase in our interest rates. Watch the housing market which is leveling off in many parts of our country. It takes longer to sell real estate now. The buyers must be feeling the pressure of higher interest rates. Foreclosures are increasing, as well.

We must arm our children and grandchildren with the Word of God. The true answers to all of life's challenges are contained therein. We are instructed to depend upon God for everything. However, that does not mean that we pray and then sit and wait for Him to provide. He uses means to accomplish His will. Therefore, it is up to us to prepare ourselves through sound education, make our plans, commit them to Him, and move out in accordance with these plans. Then give Him the glory for every result of our plans. Without Him, all is lost. Seek first the Kingdom of God, then blessings will follow.

Best to each, Doug

Gold Up Friday Before Long Weekend

Gold has moved up over the last 24 hours. The low was $537.10 about mid morning and the high was minutes ago $552.60. Recall that last year started with gold just below $530, and the low for the last 52 weeks was $414.45 on May 31st. The high of $572.17 was on February 2nd this year. It certainly has not been a bad year for gold! The long term upward trend is still intact. There will always be corrections, and this one may not be completely over. It does appear to be ending as gold has move to a higher plateau.

The mining stocks have been holding fairly well in spite of the recent drop in gold price. DROOY is still in a nice buying range at $1.49; NEM $57.17; SSRI $16.47, and CEF $7.50. Virtually all are up today.

In the general market,we are still seeing the DJI struggle to stay above 11000. It is currently at 11078, down about 42 for the day.

By the way, do you feel that all of our presidents should be honored on Monday? President's Day has replaced George Washington's and Lincoln's Birthdays. I believe we have done a disservice to both of them, by relegating them to a mixed bag of men who have occupied the office. I particularly believe we should honor George Washington, without whom, it is unlikely we would even have a nation today. For years, he was honored as the "Father of our nation." However, I am certain that he would be disappointed in what remains today.

Remember to join in corporate worship this Lord's Day. It is our duty and joy, as Christians, to worship our Lord together and share in fellowship with other believers.

Best to each, Doug

Changes in Preference for Dollar?

The Financial Times of London reported a drop in Net Foreign Purchase of Securities (NFPS). The November amount was $91.6 Billion and December was $56.6 Billion. The trade deficit for December was $65.7 Billion, so that left a shortage of over $9 Billion. The purchase of U.S. Treasuries was down $18.3 Billion. The drop was primarily from Asian central banks and those of the oil Mid-East. China and other Asian banks have indicated that they will manage their reserves more closely. Does that mean less purchase of our securities? We will have to wait and see.

Industrial production was down 0.2% and capacity utilization was down 0.3% for January.

In the face of these negative reports, it seems that Big Ben's Report to Congress encouraged the dollar bulls who pushed the dollar a bit higher. One comment is that Big Ben does not use as much Greenspan speek. He speaks with more clarity which provides more understanding to the audience. We will have to see if his actions follow his words.

Meanwhile, gold has languished in its correction. For the last seven days, the high just over $550 was briefly touched two times and the low has been around $540. For the last 24 hours, the high was $544.50 and the low $535.40. It is now at $538.40. DROOY has traded from $1.38 to $1.47 and the last trade was $1.45. I made an additional purchase at $1.46 yesterday. The price looks good to me! You study and see if it is right for you.

The general market in terms of the DJI has been a bit above $11,000 for the last day or so. Were it to stay above and move much higher, most would say that is a good sign. There is much uneasiness among investors domestic and foreign (as was explained in the opening paragraph). This is negative for markets. Some of the uncertainty must come from the saber rattling over Iran.

Adding to uncertainty are those in Congress who are pushing for sanctions against China. This is in spite of the fact that we are dependent upon China and other Asian central banks for purchase of our debt. China now holds in excess of $800 Billion in reserve. Any substantial dumping of these dollars would send the dollar into the toilet. Of course, it is to foreign advantage to slowly replace dollar reserves to prevent a substantial loss in value. However, sanctions against China could cause a negative reaction.

As usual, we are faced with an unknown future. I am glad that the future is totally in the hands of the Sovereign God of all. Were it in our hands, we would make a mess of it. I often wonder if some of our individual and national sins are not the result of God's giving us over to our own devices as reported in Romans Chapter One. We must give Him the glory and be thankful to Him in all things.

Best to each, Doug

Gold Correction Still Evident - How Long?

David cried out to God asking "How long, O Lord?" He, of course, was referring to his enemies and sin in general. Knowing that each of us and everything is under the Sovereign Lord of all, we should learn to rest in knowing that He loves and cares for His people. He has told us that not a sparrow falls without His knowledge (actually, His will) and that he counts the hairs of our head. That is mind boggling to our finite minds, but it is true! David, properly, took his question to the correct person. God is aware of our doubts before we even perceive of them; therefore, we should never hesitate to share them with Him.

The volatility of the gold and silver prices over the last couple of weeks has been very great. For the last 24 hours, gold was as high as $551.40 at 9:51 (NY) this morning and as low as $543.60 at 11:17 last night. It is now $548.80. Silver is at $9.34. The volatility is still there and the direction is in doubt. Of course, it is still early in the trading day.

This from The-Privateer.com: "Speaking of the global financial system, as you undoubtedly know, Gold has had quite a week. It had a $US 19 fall on February 7 followed by a $US 14 rise on February 9 and a $US 14 fall on February 10. The $US 19 fall on February 7 came, not so coincidentally, on the first day of the Treasury's quarterly refunding auctions. It was inaugurated and pushed through in New York, the London AM Gold fix on the day was only $US 1.50 lower than the PM fix on the previous day. These refunding auctions are the LAST which can be done with the Treasury's debt limit at its current level of $US 8.184 TRILLION. The Treasury's Mr Snow is pointing out in a louder and louder voice that the debt limit will be hit at or about "mid February" and that the Treasury will run out of manoeuvre room under the present limit by "mid March".

This sudden Gold sell-off was an obvious ploy to make SURE that the refunding auctions went through without any "gremlins" getting in to mess things up. Mr Greenspan pitched in too, including in his first speech as a "private citizen" the contention that the rising Gold price was merely a result of heightened fears of terrorist attacks."

In the case of the precious metals now, none of us really know how long and how deep the correction will go. We can only speculate or maybe offer "educated" guesses. I really prefer to just examine the trend and take advantage of buying or selling opportunities as they present themselves to us.

For my situation, I have sufficient mining stocks in my portfolio. Therefore, I will not buy more until I see definite signs of a bottom and a turn upward from it. If I had no mining stocks, I would be slowly buying in as the prices became more attractive. I say slowly, because it does not appear to be a "sell the farm" or "mortgage the house" time in the market. It does not yet appear to be an all out buy time. In fact, such a time is difficult to spot. This is what I would do, you decide for yourself what you should do.

Here are some of the last trades: DROOY 1.56; CEF 7.22; NEM 54.94; HMY 12.72; SSRI 15.80. As one can see, the prices are down, but not as drastically as the price of the actual metals. The DJI is at 10920.17 and the S&P500 is 1264.12.

I still expect to see gold at $600 this year. However, it may take more time than it looked earlier. Once again, I believe it is easier to detect a long term trend than it is to predict short term swings in prices.

Your comments and suggestions are welcomed; rather, they are solicitated.

Best to each of your and yours, Doug

Gold in a Battle to Stay above $550

This is another volatile day for gold and the market in general. For the past 24 hours gold as been as high as $568.30 and as low as $547.70. It is now at $548.70 and silver is at $9.33. The range for gold has been very great!

The long term upward trend for gold is still in place, but it is these times which test one's metal. DROOY is at $1.55 which is a reasonable buying price in my opinion.

The general market measured by the DJI is off 38.33 now. Currencies are in a narrow trading range with the dollar a bit stronger. Some are predicting that the dollar will remain strong for a time, but almost all see it remaining in a long term down trend.

Barring a major event during the week end, we should see more of the same today and likely through Monday or so.

Rain is again predicted for us here in Alamo City, but we are yet to see it. We are in bad need of rain. The ground is like powder and the grasses are suffering badly.

Remember to join in corporate worship on the Lord's Day. It is demanded by the Sovereign God of all and a particular duty of all Christians. Do not delay to daily and, specially, on Sundays worship the Lord our God.

Best to each, Doug

Is Gold Going Up Three Steps This Time?

With gold at $560+ one wonders if it is jumping to exceed the last high of about $575. This is always a good question for which one really has only guesses. It is best to watch the trend, currently up, and to realize that all trends continue until they turn. That sounds trite, but is very true. We must follow the major or long term trend which can be more easily defined than the short term.

For the last twenty-four hours, Kitco.com reports the low for gold at $548.50 at 3:32 yesterday afternoon and the high of $560.50 today at 10:06 (NY Times). Silver low of $9.37 yesterday afternoon at 1:02 and high of $9.60 at 9:53 this morning. That is quite a trading range.

DROOY is responding nicely to the increase in the price of gold. I bought more at $1.46 yesterday and the last trade so far today is $1.62. It is my hope that those without mining stocks did pick up a few shares. We will be watching the trend.

Gold is still bouncing around the $560 level. The dollar strength is likely to be short term as the longer term is down.

Best to each, Doug

Correction Well Under Way!

Gold dropped about $20 yesterday. That is some drop! For the last twenty-four hours, Kitco reports the high of $559 yesterday at 10:00 a.m. NY Time and a low of $545.10 today at 8:28 a.m. This should give Barrick an opportunity to rid itself of some hedging of forward sold gold. That would be a positive outcome of the drop.

The dollar rallied for no real good reason other than some very aggressive dollar bulls pushed it up. Do you think that maybe, possibly there was some covert manipulation of currencies? There always is by the central banks. Of course, the FOMC did raise the interest rate another .25%. Likely that was priced into the currency markets well before. The dollar remains the reserve currency for most of the world. However, it is still in a downward trend which has yet to end.

Looming on the horizon is the Iranian EURO oil market which is scheduled to open next month. This would be negative for the dollar. The rhetoric about Iran has not cooled very much in the last few days. We must pray that a diplomatic solution surfaces very soon.

Gold ran up so rapidly that there was likely some profit taking. As Russell said, this was likely a good thing to rid the market of speculative investors taking profit and moving to other investments. Now maybe most of the mining stocks will be in hands of those who are in for the longer haul. The long term bull market in gold has not been broken and this is only a temporary correction.

I thought that $550 had a good possibility of holding, but it was taken out with ease. Gold is now at $549.10 and seems to be crawling back up. Two steps upward and only one step down >> I hope!

Almost in concert with gold, silver had a twenty-four hour high of $9.47 at 9:59 yesterday morning and a low of $9.22 about 10:00 yesterday evening. It is now at $9.38 and seems to be rising.

DROOY is trading at $1.49 at present. So, if you are not on board, it could be a good time to jump in. I will likely pick up some more at these prices. You make your own decision.

It is a cooler day in San Antonio. Of course, it has been a very warm "winter." There has been almost no winter at all. There is a forecast for freeze later this week and possibly some needed rain. Of course, our last freeze day is about March 15, so there is more time. The Lord has blessed us with wonderful clear weather since Thanksgiving. It has been a wonder!

We must always remember to pray without ceasing and in everything give thanks to the Lord for His grace toward His people. We must have an attitude of prayer and praise for Him at all times.

Best to each, Doug

Maybe I Should Have Been Trading

Gold has hit 550 today. Now at 550.70.

Using hindsight one can always make the correct decision. I have traded in and out of mining stocks a great number of times. However, I have also been one of those who traded almost all and then observed the price continuing up. In a sense, I felt locked out at those times. In the last few weeks, I decided not to trade in and out again for the time being. This, today, does not seem to have been the best decision.

Gold was due for a correction! It had gone up to rapidly. Now the correction is in. From a high of 572.60 at 1:15 NY Time this morning, it has dropped to as low as $550.10. It is now back up slightly to 550.30 at 2:19 p.m. NY Time. However, it continues to bounce about the 550 level and will likely penetrate that some today.
I had thought that 550 would hold, but?????????

I hope those of you who were waiting to get on board are getting ready to jump in. Remember BUYER BEWARE!

Best, Doug

Gold Corrected Early Today

Getting this out to let you know that gold dropped as low a 555, and continues to bounce around that price. It is now 555.70. DROOY has traded as low as 1.55, so far. I bought more at 1.57.

We needed a correction after the rapid run up in the price of gold. Where will the correction end? I don't know; however, I do not expect to see 550, but it has gotten close. I could be wrong on this. We will wait and see.

Best to each, Doug

No Gold Rush Yet!

Gold closed Friday at about $567 and traded over last night at a high of $572.20. It is now at $569.60 and has been trading today just under $570. The mining stocks have yet to jump into the stratosphere, but they are holding well. It seems more time above the 570 price for gold will be required. We seem to be having a small correction at this time. The price of gold has gone up very rapidly, and one should expect a correction. However, I believe we will see $600 gold before summer and very likely much sooner.

I had thought that prices above $550 would have brought more folks on board, but the was almost a non-event. Even $560 and $570, though these prices brought some into the market, the gold rush seems to be in the future. It is a wonder to me that so many fellow Americans are oblivious to the plight of the dollar and long term value of the precious metals.

The situation in the Mid-East could escalate as/if the current rhetoric continues. A loss to the market of Iranian oil would send oil prices much higher. This is of concern to many of us. We must pray that the situation would cool through diplomacy and not involved military action.

Meanwhile, I see this as another buying opportunity. DROOY is in the $1.63 - $1.64 range which certainly seems reasonable to me. (Remember BUYER BEWARE! There is always risk in any investment, but there is also risk in not investing during a time when the value of the dollar is in a downward trend.)CEF is off a bit to $7.65, but most mining stocks are up today in early trading. The first hour of trading is the crazy market time. Most of the general indexes are virtually neutral with the DJI at +6.58 and bouncing around.

I hope that you took advantage of the opportunity to join in corporate worship yesterday. Whatever we do must be done to the glory of God. He has done so much for us, that our hearts and minds should be filled with gratitude toward Him. We express some of that by regularly joining with other Christians in the worship service. This is far more important than any Super Bowl.

Best to each, Doug

Gold Coasting at Higher Level

Gold posted a new 25 year high in Asia at over $575. Then, according to Kitco.com, it hit a high of $574.90 on February 2nd at 10:37 a.m. NY time. The low for the last 24 hours was $567.60 at 8:43 a.m. today. For this period it has traded above $570 except for three short dips below. It now looks to be going a bit lower, but still well above $560. Silver is down some for the day at $9.66.

There is an ongoing gun battle between the German Finance Minister and the Bundesbank about the sale of some of the bank's gold reserve. The minister wants some gold sold and the funds invested to bring the interest into the government coffers. The bank does not want to sell and seems inclined to take the matter to the EURO central authority. We will have to watch this situation and see who wins. The outcome may temporarily impact upon the price of gold.

Our DRDgold (DROOY) continues to trade around $1.70. To me that is not a bad buying range, particularly for those without mining stocks. The mining stocks are not yet jumping up in concert with gold, but seem to be holding at higher levels this year.

The Central Fund of Canada LTD. (CEF) is trading around $7.60. It more closely tracks with the price of precious metals. This is because it is invested primarily in bullion gold. I like this fund and hold some shares. It is more conservative than the mining shares, but will not give the leverage of the mining shares as gold continues to rise in price.

This report is always written to report what I am doing in the markets and to encourage you to educate yourself and make your own decisions. As always Buyer Beware.

There is not much news for the currencies. The EURO has returned above $1.20, but is not moving up much higher at present. The dollar is holding in spite of the government pushing for the Chinese to let the Renminbi float. The rhetoric from our government supports a stronger dollar, but the pressure on the Chinese is for a lower dollar. Perhaps, we would have a better understanding were the politicians to speak the same from both sides of their mouths. Of course, that is wishful thinking. They never do!

Once again, we are headed into a weekend. I pray that each of you will joyfully attend corporate worship of the Lord Jesus Christ. Fellowship with Christians, particularly, in worship is a foretaste of the heaven we will enjoy when the Lord calls us home.

Best to each, Doug