Gold Above $585!

From a low yesterday of $565.30 yesterday morning, Gold has hit as high as $585.60 today and is now at $585.30 on a very strong move up some $12+ for the day. This is a very rapid move upward establishing a new high for 25 or more years. It is a further confirmation of the bullish trend.

The mining stocks: BGO 4.62; CEF 8.03; DROOY 1.54; GLD 58.13; HMY 16.32; IAG 8.58; MFN 8.15; MNG 3.55; NEM 53.79; NTO 4.66; PAAS 26.96; PDG 22.04; RNO 1.95; SSRI 21.66. virtually all are on the move with some up substantially.

Best to Each, Doug

Gold Posts a New High

Well, gold posted a new 52 week high of $573.70 at 1:18 this afternoon. That beats the $572.15 high of February 2, 2006. The low for the last 24 hours was $559.50 at 2:08 a.m. today. That is well above the 52 week low of $414.45 on May 31, 2005. It appears that gold may be resuming its climb.

Perhaps, the central banks and governments are beginning to lose their power to hold the price of gold down. They have been doing a rather good job of it for the last 15-20 years or so. Gold, the true money, is feared, because it allows citizens too much freedom. That is anathema to many in power.

DROOY dipped to $1.38 yesterday and to $1.35 today, but is up to $1.43 now. Almost every precious metal mining stock is in the green today. My silver stocks PAAS is $26.50 and SSRI is $20.97 as this is written.

Timing is the problem we have, because we do not possess perfect foresight. Therefore, it is important to seek quality in investments and follow the longer term trends which are fairly well established over time. The precious metals are in a long term bull trend and once again this has been reinforced today.

The Lord knows all about timing, because He is in absolute control of everything. He created everything and everybody, but, thankfully, does not leave it there as a watch maker does. He still is in control. Even our next heart beat and breath is directed by Him. That should be a sobering thought to us every minute of every hour of each day He gives us. He said, "If you love me, you will obey my commandments." Thus, we exhibit our love toward our God through obedience. Follow Him every day.

Best, Doug

Gold Still Bouncing, but in a Higher Range

For the last twenty-four hours, gold has traded at a low of $563.20 at 4:21 today and a high of $569.10 at 9:24 today (NY Time) compliments of Kitco.com. It is currently at $567.30 and seems to be climbing again. Silver is at $10.84 still moving upward as the new silver ETF goes on line before too long when (if) SEC gives it approval. That will place a very large demand upon the already short supply of silver -- Hold on to your pre-1965 U.S. silver coins!

DROOY is still trading around $1.40 as most of the mining stocks are off a bit from yesterday.

Beware of the reported protests by many people against closing our borders. The protests are in support of proposed generous amnesty and foreign worker programs. Personally, I wonder about the wisdom the protestors in view of the serious terrorist threat which is flaunted before us in support of Homeland Security and the War. It seems to me that it would be better to protect our borders and screen prospective immigrants. Also, many of the immigrants today no longer melt into our American society, but segment themselves within our borders. Thus, they are not contributing to the societal health, but staying outside of it. The long term consequence of this is for us to lose our society to the other cultures with which many Americans do not agree. This will have a long term economic effect upon our nation.

As always >> BUYER BEWARE!

Best, Doug

Gold $565+

DROOY is back above $1.40. If you got in at the low of about 1.22, you now have unrealized profit of $180 per 1000 shares. Not bad for a week of risk. That is how the gold shares can go. Do they always go up? NO! Long term, I believe they will be much higher. If you are selling into the rally, I suggest you use a 5 or so percent trailing stop. Since I bought more near the low, I have done this with a few shares. No, I am not getting back to full trading, except for a very few shares.

The general market measured by the DJI is down 30+ dollars now. Gold is now at $566.60 off a bit from the morning high of $568.10. It is bouncing around some, but at this higher level. I has broken about $8 above the short term down trend of lower highs which is, technically, a positive sign indicating possible higher prices in the near term.

I hope that you had a great day of worshiping the Lord in corporate service yesterday. We had a great worship service and time of fellowship in the early afternoon. It is such a joy to fellowship with the people of God.

Best to each, Doug

Dollar Gained Some Temporary Strength

The dollar is up some in spite of the fact, that the U.S. needs to borrow $3 Billion per day to stay afloat. The total debt for our governments and ourselves remains some where above $40 Trillion. In the current economic thought, our dollar must be lower to make what few manufactured goods we produce more attractive to foreigners. However, the dollar remains higher for the time being.

I hope that some more of you got on board with DROOY as low as $1.20 or so this week. Frankly, I did not expect to see it below $1.30. It is going back up at present and trading at $1.36 now. Gold is currently at $556.60 and it has spent most of the last 24 hours in a very narrow range around $550. The low for the period was $545.90 at 10:21 yesterday and the high was $556.70 at 10:08 today (NY Times).

Examining the 1 Year Gold Chart of Kitco.com, it seems that the price of gold is approaching the upper trend line of lower highs since early February. Were it to break through this line with a price above $560, technical analysis tells us that it will go higher. Is this always the case? No, but it generally is.

Our two senators went to China to encourage the Chinese to lower the value of the Renminbi. In spite of their boastful rhetoric upon return, they accomplished nothing. It was just another expensive boondoggle. Guess what, all China had to do to give them lock jaw was to point toward the towering Chinese holding of U.S. dollar instruments. Were they to dump these on the markets, guess what the dollar would be worth? Almost nothing! We will not be able to force China to drop the value of their currency. They will do it in a measured pace over time as they see it beneficial to their economy. By the way, they have a substantial growing middle class with a huge appetite for the products they produce. With the opening of the EURO markets and with this burgeoning domestic demand, they no longer are as dependent upon the consumers in America as in months gone by.

The new silver ETF is nearing approval by the SEC. In anticipation of the additional demand upon the narrow supply of silver, the price has stayed above $10. It is now $10.70. I believe the current price it too high; that is, I believe we will see it some lower in the near future. Long term, I remain bullish on both silver and gold. I will not consider the silver ETF for my own portfolio, because of the management expenses. I prefer the Metals Direct opportunity offered by everbank.com and have moved some funds into their pooled gold account. You can check it out at the everback.com website. It is worth a look. See if it might be for you.

It is hard to realize that March, 2006, will end in one week. Time is really flying. Then comes the Income Tax month. By the way, your personal and trust returns are due on April 17th this year since the 15th is on a Saturday. A really fun time? It would not be so bad if our taxes were being spent in a way to give the glory to God. BUT, THEY ARE NOT!

Purpose to worship our Sovereign Lord on His day (March 26). This is but one part of recognizing and giving Him the glory due Him. After all, it is He who has made us and not we ourselves. Thus, we owe all to Him, including our next breath or heart beat. Our very life depends upon His will. Realize this and live to His glory!

Best to each from "wintry" San Antonio, Doug

Liquidity, Liquidity Where Will It Go Next?

For the last 24 hours gold remained in a tight trading range with a high of $554.70 yesterday at 6:28 p.m. and a low today of $547 at 10:13 a.m. (NY Times). It closed at $551.90. Nothing real exciting!

Silver on the other hand traded from $10.12 to $10.51 (a new high not seen since about 1983) and closed at $10.48. The news here is that the SEC is about to authorize the new silver ETF and there has been substantial buying in anticipation of the new demand it will put on silver supply.

The general market is still in the doldrums after being up most of last week. It still seems, to me, to be overbought. As mentioned on the 19th, there are too many negatives on the dollar presently. This must be having a negative impact upon the general stock market.

The home builders are suffering quite a bit now as interest rates are slowing down the purchase of homes. I do not expect a total collapse of the housing market, but there will be a drop in demand. By the way, it is possible that commercial real estate is not being hit yet.

While the Fed has been increasing interest rates, it has been increasing the supply of dollars or liquidity in the market place. By the way, this stealth increase in the supply of "money" will be more hidden as the Fed ceases to report M3 at the end of March. Do you wonder why this measure is being eliminated?

This liquidity has to go some where. It will be interesting to see where it goes. I believe we will see a movement into assets, primarily, natural resources with emphasis upon energy (oil and natural gas), precious metals, and base metals. This vast amount of liquidity will give the residential housing more of a soft landing than many believe. Selected areas, such as, San Antonio will likely have a fairly firm housing market for the next few months into next year.

The United States, once a true melting pot as various cultures emigrated into the nation, is becoming more and more polarized into cultural factions. As our "open" borders attract more emigrants of a variety of cultures, we are losing the American "dream." We will soon be totally devoid of our American culture. Even the practical form of our government shows this. We have moved ever more toward a democracy never envisioned by our founding fathers. We were to be a representative republic under law. Democracy is in its basic form mob rule. The law is whatever the majority says it is. Thus, we are living under ever changing man's law without a firm foundation. This trend seems destined to continue. I would much prefer to live under God's Law given to us by the Sovereign Ruler of all. He and His law does not change.

Best to each, Doug

Back Again - Dollar Down - DJI Up

We have a mixed market! The dollar has been hit for a number of reasons. Several are, as follows:

1) The escalating trade deficit, 2) A fall in foreign purchases of U.S. securities for the past two months (Thus, we may be reaching the point at which this foreign financing will not support our deficit.), 3) Many analyst believe we have reached or are at the end of interest rates hikes with the difference between ours and the rest of the world shrinking, 4) Our overall debt of about $40 Trillion, and 5) There is a growing sentiment in Congress to "keep America American" with threat of barriers to foreign investment.

Due to these challenges and our War on Terror, the dollar took the largest drop in three weeks. For about 30 years, I have been expecting the dollar to head to the dump. This has yet to, if it ever will happen! Of course, one must realize that it is not in the best interest of other central and government banks for the dollar to drop precipitously. They would like to see the dollar continue slowly down over time to preserve the value of their reserve dollars.

China has moved more into the machinery and capital manufacturing sectors of late. This has been an area giving German industry a great deal of income. Thus, we see China expanding into yet another market area. We have spoken about China's wisdom in going around the world buying sources of natural resource, including energy. The Chinese have shown great wisdom in movement toward a freer economy and even opening theirs more to outside investments. Look at the way they have managed Hong Kong without interrupting one of the greatest free markets of the world. The middle class in China is showing great improvement, mainly in the larger cities. This has created a large domestic market for consumer goods.

Gold spent most of the week between the narrow range of $550 and $555 closing at $554. Gasoline at the pumps enjoyed an increase with the range here about $2.29+ on the lower side. That's up about fifteen or so cents from the week before. The DJI reached and stayed above 11,000 most of the week ending on the high side.

The Iranian situation has not cooled here and in Iran. However, much of the rest of the world seems to believe both sides should let it cool. On the surface, it seems that both the U.S. and Iran have rattled the sabers so much that neither could back down without "losing face".

By the way, I saw a mention that the Iranian Oil Bourse is on indefinite hold. That may temporarily ease another potential slap against the dollar.

We had a wonderful worship service today during which we praised the Lord for His goodness to us, confessed our sins, heard the word preached, sang hymns of praise, and celebrated the Lord's Supper in remembrance of Jesus Christ our Sovereign King. I hope an pray that each of you did the same.

Best to each, Doug

Gold Off Bottom?

Gold 24-hour high 546.40 today at 12:41 and low 539.90 yesterday at 400 p.m. The one year chart still reveals a continuation of the bull market in gold. Perhaps, the bottom for this correction has been set. We shall see!

DROOY is bouncing between about 1.38 and 1.41; HMY at 13.36, NEM at 48.90, SSRI at 17.58.

I believe we will see oil, precious metals, and other commodities up this week after a dismal last week. We are still not out of the woods as little seems to disturb the dollar bulls. Even the threat of the Iranian Bourse for EURO oil, should it come off on March 20. Reports are that some of the mid-East banks are adding EUROs to their reserves as some in Asia did in the recent past.

Still exciting times. I rejoice that the Lord is in control. That way, man can do his worst and still God will sit in His heaven and laugh at the folly of man.

Be back on Thursday if not before.

Best to each, Doug

Gold a Bargain at $540

Wow! What a rocky road we are traveling! Gold hit a new low for recent times at $533.80 at 9:31 this morning. That brought DROOY momentarily down to 1.33. Of course, I was busy reading the other news and missed that exceptional buying opportunity. Gold is at $540.50 now and has been fairly steady closely around $540.

Looking at today's Kitco.com 24-hour chart the spike down at 9:31 was followed by a second spike down about and hour later forming a double bottom or "W" as some chartist call it. This is considered a good sign and often predicts a rise in the price. Will it this time? Wait and see! The movement since that low has been a stair step climb. This is quite a correction in the price of gold this time around. The 30-day high of $568.60 was reached only one week ago on March 3rd. This has been a WOW correction!

The mining stocks have been slowly and cautiously following the upward movement of the price of gold. On the other hand, they have NOT crashed as gold moved down. I am still partial to the Canadian bullion ETFs -- CEF and CLGLF. By the way, Everbank.com world markets has way to invest in gold other than the gold CD. I haven't checked it out yet, but you can if you are interested.

Meanwhile the January trade deficit came in at $68.5 Billion which is 5.3% above the last months record and higher than the previous record by some $750 Million. Of course, we are told that this is no problem, because "this time it is different.? Do you believe this?

Well, this needs to get out.

Best to each, Doug

New Trading Range

It looks as though gold is in a temporary trading range with a low of about 540 and a high of about 550. How long will this last? Well, there is much concern in virtually all markets. Even the emerging markets, including the Asian Tigers are becoming erratic.

Spending here in America is out of control from the lowest consumer to the highest level of government. The debt to support this spending is also out of control even though interest rates have climbed for some time now. In spite of the high level of debt drag on our economy, San Antonio and Bexar County are considering vast sums of dollars and incentives to attract professional baseball and/or football teams. This will be of doubtful value to the area, but certainly will lay a heavier tax burden on the serfs, oops, I mean citizens.

By the way, have you ever thought how much the communities pay for these subsidized sports? Normally, the community builds an expensive stadium or play ground for the team. There are very few other businesses which receive such an abundance of tax money from the community to support the owners and players. For the owners and players it is a win-win situation. The poor citizens who cover much of the expenses can not even afford to attend the games. Nevertheless, they consider the "home" team, "their" team. Shakespeare said, "What fools we mortals be!" or words to that effect. Think about it, we taxpayers make millionaires of owners and players.

The housing industry is suffering a severe down turn in profit and even building in many areas of our nation. Condominiums are being hit particularly hard. Remember that vast numbers of employees among builders, mortgage companies, insurance, and real estate companies have been employed during the recent bubble in this sector of the economy. What happens as it slows down? Where will these folks find employment?

Speaking of employment, the new merger or take over between SBC and AT&T will put many into the unemployment lines.

The Mid-East situation is turbulent. More deaths reported in Iraq over night. The new Iranian Oil Bourse looms near by. It is scheduled to open about March 20th -- that is only 11 days away.

The continual threat to oil production and delivery in the Mid-East is of great concern. Most of the heavy demand for heating oil has passed by now easing some of this concern, but the threat is very real. Any major interruption in oil supply will be felt by all of us.

These are some of the world situations which are weighing heavily upon markets. The concern is world wide.

The new trading range of gold is offering opportunities for others to climb on board.

Gold has traded from a low of $539.40 last night to a high of $550.10 today. It is now at $545.50 in an upward direction. The prices below $540 have been steep spikes indicating increased buying there and around $540. Thus, $540 could be considered as a short term resistance level. Even the breaks above $540 have been brief spikes in the last 24-48 hours.

It is time for us to hang tough. We need to get out of debt and protect our capital.

Best to each, Doug

Gold Lower!

Gold over the last 24 hours: High 553.60 yesterday at 1:25, low 542.50 today at 5:44. Now at 543.50. Below 540 would look quite bad on the 30-day and 60-day charts. The long term bull trend on the 1-year chart is still confirmed. The shorter term is in doubt at present. Watch the price of gold. If it goes below 540, I would expect it to go a little lower. However, it would have to approach 500 to direct the long term trend a bit lower.

DROOY has been below 1.40 which is in excellent buying range. It could go lower, but who can accurately always buy at the low? Or who can always buy at the high? When we get close, that is great!

As always, buyer beware.

Best to each, Doug

Wow, Gold a Bargain at 550!

24-Hour Report on gold: High 556 at 11:12 yesterday and Low 549.90 at 10:39 today. Now Gold is 550.50 and silver 9.37.

The mining stocks are lower, too. DROOY 1.41; HMY 13.16; NEM 49.56, and SSRI 17.20.

The correction continues. It takes strong hands to hold on when these corrections spring upon the markets. The DJI is below 11000 again this week. There is a great amount of worry over the markets.

Gold, particularly, and silver to some extent are real money. All the paper FIAT currencies are manipulated by governments, and primarily, by central banks. Our central banking system. The Federal Reserve System is corporately owned by the member banks. It is neither a governmental agency nor audited by any government agency. It is autonomous! It is the primary cause of the loss of dollar purchasing power since 1913. Since August 15, 1971, the dollar has not been redeemable in gold as it was before and since that time, the price of gold in dollars has gone from $35 an ounce to above $800 in late 1979 and early 1980 and is currently about $550. Thus, it does not take a rocket scientist to see that gold does retain value over time unless one buys on the spikes (1979-1980). When one considers inflation of the currency via the printing press and debt instruments, today the value of gold in current dollars should be approaching $1000 per ounce. Thus, even at $550, gold is a good buy. That is for the longer term, as there will be up and down movement in the price. Just such a downward movement as is now being experienced is not uncommon.

I consider each of these corrections as buying opportunities. Each of the corrections are establishing higher lows and over time, we will see higher highs. Timing is very critical for short term traders in the markets. However, those with a longer term outlook, can lock on to a major long term trend and ride it to the end. Gold remains in a bull market and the price of gold in dollar terms will continue to rise long term.

After all, a $20 gold coin in the late 1800s and into the early 1900s would buy a fine man's suit. That was true of paper dollar which was redeemable in gold as the early dollar became available. However, the same $20 gold coin will today buy a $550 man's suit, but try that with a $20 Federal Reserve Note and receive the scorn of the sales clerk. Which has retained its value? The $20 paper bill or the gold coin?

That is the basic reason for individuals to own precious metals (not jewelry) bullion coins. It is to preserve wealth over time. The reason for owning mining stocks is for the leverage as the dollar drops in value. Then the proceeds from sale of the mining stocks may be used to reduce debt and to take advantage of opportunities to buy other assets at bargain prices.

This is the rationale supporting the precious metals. However, most of the people in the United States are unaware of this. When the masses begin to realize this, there will be a "gold rush" to trade dollars, at any cost, for anything that is gold or has gold in its name. Not today, nor tomorrow, but at some time in the future. We must be prepared to supply their needs.

Best to each, Doug

Big Drop, Possible Correction!

Gold off almost 12 to 553.90.

DROOY -.07 to 1.51; HMY -.63 to 13.70; NEM -2.64 to 50.53, and SSRI -.55 to 17.67.

All moving into almost my buying range for additions to portfolio.

Best to each, Doug

Since last night gold was High $568.20 at 5:10 and low $564.00 at 8:59 at today's NY time. It is trading in a narrower range and establishing the higher plateau of last week. The narrow trading range possibly indicates an accumulation phase from which there will be a breakout. The question is always, will the breakout be upward or downward. Long term, it seems headed upward.



This chart on gold futures with 25, 50, and 200 day moving averages compliments of www.The-Privateer.com, shows a very healthy performance. The last correction took the price below the 25 day moving average, but the price has broken upward through that average again. The 50 and 200 day averages were not threatened during the correction. The Privateer is a great newsletter published by Bill Buckler in Australia. I consider it one of my best resources for political/economic analysis.

Additional buying in India and China's opening trading for gold in dollars have added to the demand for gold. Gold is currently pushing upward at $566.60. It must push some above $570 to establish another upward breakout.

Some early prices today: DROOY 1.58, HMY 14.33, Nem 53.27, and SSRI 18.34. Silver is holding nicely at 10.24.

We had a wonderful worship service yesterday which always serves to refresh the people of God and to challenge us to living in accordance with the Law-Word of God. I hope and pray that you had the same wonderful experience and look forward to next Lord's Day for more of the same.

Best to each, Doug

Gold in a Tighter Trading Range

For the last 24 hours gold reached a high of $565.50 yesterday at 11:23 a.m. and a low of $561.10 at 10:05 p.m. Now it is at $564.60 and looks to be going a bit higher. Note that for all of this time it has stayed above $560 and spent most of the time above $562. Is it consolidating for another run at $570+? It does appear likely, but we will have to wait and see.

For investments in precious metals above the physical metals, consider the Central Fund of Canada (CEF) invested in both gold and silver bullion and the Central Gold Trust (CLGLF)invested in gold bullion.

Bush stopped over in Afghanistan on his way to India and stated that we would still get Osama.

Most currencies were up against the dollar. The Canadian dollar was above $0.88 showing good strength. The other commodity currencies in New Zealand and Australia joined the parade. The Renminbi moved up again, as well.

The DJI has been fighting to stay above the 11000 level. It has been a difficult struggle, losing at times.

The Europeans meet today to decide on a raise of interest rates as the economies heat up some. Germany seems to be picking up steam.

The housing market is slowing with buyers in some of the "boom" areas backing off in anticipation of lower prices. Many have sold homes in these areas of overly inflated prices and moving to lower cost areas of the country. We are seeing here what has also been seen in Great Britain and other parts of the world.

The consumer continues to spend. I would have thought that he had been maxed out in credit and slowed buying. It seems not. When will he stop? With total debt in our economy approaching $40 Trillion, he should be near the end of that road.

News reported that Toyota posted a rare sales decline in February. Camry sales fell 14%. Analysts suggest that buyers are waiting for the new models. What do you think? Is it just possible that the buyers are feeling the pinch of higher prices at the pumps and in the malls?

We always live in challenging and interesting times. How wonderful it is to depend upon a God who cares for His people. This does not mean that we are to just put everything on Him and do whatever we like. It means that we are to study, prepare, and move out in accomplishment of the work He has given us. To be sure we are in the work He has designed for us, we must prayerfully under the power of the Holy Spirit to study His written word, accept and follow it. Then commit our plans to Him, work, and give Him the glory for the results.

Best to each, Doug

Another Step Up for Precious Metals

Welcome to the new month of March. Where did January and February go so quickly? A new week ahead always gives us a feeling of new beginnings as does a New Year. How about a new month? Do you rush into it with new vigor? We should! I believe the Lord gives us these new times and, also, seasons to encourage us to look back on the past and lessons learned and look forward to accomplishing more in the new time ahead.

24 Hour Gold >> High $564.10 today at 9:37. Low $555.50 yesterday at 9:58 almost 24 hours ago. Currently $563.50 very near the high. Gold seems to be establishing a new plateau of trading. Virtually all mining stocks are responding with upward movement >> CEF $7.72; DROOY $1.42; HMY $14.14; NEM $53.38, and SSRI $16.83.

Currencies are rising against the dollar with the Canadian dollar jumping. Reports from Europe concerning Germany's economy are positive for the EURO. The Yen and Renminbi are both higher.

Looming ahead this month is the threatened Iranian oil market trading in EUROs. This will be negative for the dollar should it materialize. The saber rattling with Iran has cooled a bit after an agreement between Russia and Iran over joint nuclear work.

The general market looks overbought and very dangerous. In fact, with the volatility most markets are risky. One has to be very selective. I feel safest with precious metals, the Canadian bullion fund (CEF) which holds both silver and gold, as well as the Canadian Gold Trust (CLGLF) which holds only gold, and then some speculative mining stocks. By the way, silver has the potential to excel the performance of gold according to many. They could be correct as silver has many industrial uses and the new ETF in silver, if it makes it through SEC, will add more demand. I like both PAAS and SSRI as silver mining stocks.

Seek ye first the Kingdom of God and His righteousness and He will add to you all your needs. Put Him first, far above whatever you see in your life as second. He is our all in all.

Best to each, Doug