Gold Continues to Languish!

Gold is still meandering around $640-$650. It is providing us with more buying opportunity before jumping ahead. When will it return to its upward climb? That is the heart of the question on most folks mind. Gold is definitely oversold at present, but I still believe the price is being manipulated. It is a wonder that this still seems to be true. However, once again, the market forces will begin to take over normal control. Hang in there for the long haul.

Central banks and governments prefer their FIAT currency and have a great fear of gold as a monetary metal. They will do almost anything to destroy confidence in gold among the populace.

It is absolutely amazing that an ounce of gold historically would buy about 20 barrels of oil, but now it buys only about 9 barrels. That is absurd! Do the math. Figure what the price of gold should be now to buy 20 barrels of gold. Isn't tht remarkable. The equilibrium will be re-established some time in the near future.

Also, the great imbalance in the economies of the world will be adjusted. At that time, the mask of the dollar will be removed and it will stand naked before the world. There will be a balancing of the books at some time. The reserve currency of the world cannot be backed by a bankrupt nation forever. A day of reckoning will come!

Meanwhile, we are seeing some good buying opportunities in the mining stocks. Notice that the prices of the GLD and CEF have not fallen nearly as much as the price of gold. Even the mining stocks have fared pretty well. However, there are bargains if one will but search and study the precious metal market.

By the way, I normally read the Stratfor Intelligence Reports. Check them out at www.stratfor.com. You can obtain a free subscription to some of their reports. The most recent one was on China's plan to counter U.S. Naval Power on the cheap. It is worth a read!

Best to each, Doug

Gold Bargains Ripe for the Picking!

I suggested you check this blog early today, but it is already 8:09 and I am just starting. There was a good bit of reading to be accomplished to enable me to publish this missile. That is always a good excuse!

What a difference a little time makes! My prior two trips "resulted" in rain for Central Texas and a rise in the price of gold. Last week's trip "resulted" in no rain and a drop in gold price to about $645, a price I thought we would not see again. But I did "bring" the rain back with me, because we had some on Saturday night, the day of my return. I have yet to "fix" the gold price.

I am reminded of the Privateer's warning in his Gold Commentary. He always begins with a warning that in any consideration of gold, it must constantly be remembered that gold is a political metal. How true this is! Governments and central banks literally hate gold as a monetary metal in the hands of the public. They abhor the very thought of citizens being able to use gold in the market places of the world. They have absolute control of the fiat currencies of the world, but lack the absolute power over gold. While they lack absolute control over gold, they can certainly influence the price of the "barbaric metal" by sales of gold reserves and threats of sales. It may well be that behind the scenes manipulation of the price of gold is being exercised at present. Time will tell and it is my opinion that there will be a time in the not too distant future when the price of gold will be totally out from under the power of the manipulators.

The high for gold during the last 30 days was $725.75 on May 12th and the low was $630.75 on last Friday. What a drop! We are being offered an opportunity to add to our portfolio of the physical precious metal in the form of bullion coins, in such as the Central Fund of Canada (CEF), and in mining stocks at bargain prices. Yes, these are bargain prices.

As I drove around in the Houston area last week, I rejoiced to find gas AS CHEAP AS $2.75 a gallon. This was extraordinary as gas in Houston proper pushes $3.00. I put this in this commentary, because of my momentary excitement at my find. It seems to me that we must have the same excitement when we find a bargain based upon recent much higher prices in the precious metals. It the dark recesses of our minds, we recall gasoline at around a dollar and gold at around $250-$300. This tends to cloud our minds and to hide from us the reality of the situation. Thus, we would like to wait for gold to go lower before we buy. I suggest you look at it as you do when you find a bargain at the gas pump - "Fill 'er up!

As I mentioned several blogs ago, Russia is opening a market for oil and gold trading in rubles next month. Then, according to the Privateer, it will trade only in rubles beginning some time in July. This represents another blow on the dollar. Perhaps, soon Iran will complete its plan to have a similar bourse in EURO's.

Meanwhile, the US continues to prevent the exploration and tapping of vast oil resources in Alaska and the Caribbean. The environmentalists in concert with our "politically correct" government have accomplished this as well as blocking the building of modern refineries. We continue to shoot ourselves in the foot and remain ever more dependent upon shaky sources of foreign oil. Note to that while believed for some time, it is being more widely reported that the Saudis have a good deal less oil than they have reported. Yet, a further blow!

For the last 24 hours, gold has traded between $653.70 and $646. It is a bit higher, but still low from recent highs. Perhaps, it is being manipulated down to allow the Asian central banks to increase their reserves in the "barbaric metal." What do you think?

It may sound to you that I am a doom and gloomer. I am decidedly am not. I know in Whom I have believed and am totally convinced that He is able to keep that which I have entrusted to Him until the final day. The Lord Jesus Christ is my rock upon Whom I rest very comfortably. I am content, because I know that He loves His people and is in absolute control of all that happens here. Thus, I am very optimistic and at peace.

This is the way, I see it at present. Investigate and make your own decisions. I will have more for tomorrow.

Best to each, Doug

Hope You Climbed Aboard!

Gold is in the process of making a recovery and run to resistance at $715. For the last 24 hours, the high has been $667.20 today at 9:49 am (NY) and the low of $647.10 three minutes later. It is now trading at a new high of $668.30. It has been above $650 for the 24 hours.

DROOY is back up to $1.67; QEE to $0.39 (If you missed it at $0.33 or $0.34, you really missed a good buy. I may begin trading in this one if it runs up fairly high.); BGO is at $5; MRDDF to $1.24; SSRI to $19.03; RNO is $1.90. All are up nicely!

Even the general market as measured by the DJI is up 36.84 to 11164.15. Thus, everyone is happy again.

The dollar has dropped against the Yen. The EURO lost a bit over night, but is still in nice territory.

The trade and budget deficits still are a bad situation for the dollar. They will come home to roost in a big way. Bernanke has his work cut out for him. He is resting on the horns of a dilemma: Raise interest rates to save the dollar and kill the economy or leave rates alone or reduce them to save the economy and risk increased inflation. Greenspan left him a MESS! By the way, do you remember that Greenspan was a hard money man long before he took over the power of the Fed to manipulate the "money" supply? Yep, his name should have been Goldspan in the early days, but he went to Greenspan at the Fed.

As of now, gold is $666.40 down a bit from the high. We may not be completely out of the woods as yet, but the movement upward is an encouragement.

We can never totally trust man, gold or ourselves for even financial security. Only the Lord Jesus Christ is dependable and only He deserves, rather has earned our total trust. He is the same yesterday, today, and forever. That is the certain conviction and sure hope of every child of His. What a joy it is to know Him: the Rock which never changes.

Best to each, Doug

How's the Correction? Near the End?

Gold spent time from about 10 am (NY) to US close above $650. It hit the low of $636.30 at 2:52 this morning. It did not break above the $660.90 high of last night.

Queenstake (QEE) closed at 0.37 unchanged, but did open briefly at 0.34 this morning. DRD Gold (DROOY) closed off 0.01 at 1.59 and hit a low of 1.50 during the day. Miranda Gold (MRDDF) traded as low as 1.16 and closed at 1.19 off 0.07 for the day.

Gold must continue to hold above $650 to get back on track. We might possibly have passed the worst of the correction. The next shorter term level of support is at $600. Only time will let us know for sure. The DJI were down 18.73 for the day, but were down much worst than that earlier.

Continue to hang tough! The bull market is still on track even with this temporary set back. By the way, note that CEF is off about 20% from its highs. This is still an investment in bullion and quite conservative. It does not have the leverage of the low priced mining stocks.

Best to each, Doug

General Market Still in Decline.

Gold is struggling to stay above $650. The DJA is down 100.50 at present and reads 11040.41.

Queenstake (QEE)traded as low as 0.34 this morning and is now 0.35. DROOY (DRD Gold) touched 1.50 and the last trade was 1.53. I had a limit order in to buy QEE @ 0.34, but it is yet to execute.

These are dangerous times in all markets, but gold remains in a long term bull market and the dollar remains in a long term bear market. There have been great paper losses in the market last week and it seems a bit more of the same this week. That will limit the future liquidity.

Have I lost value in the market of late. Yes! But I still see this as a buying opportunity. The drop has been very rapid and, particularly in precious metals, I see an oversold condition. Buying should be coming into the market now.

Are there bargains in the market now that prices have dropped? Yes, but be very careful on any purchases you make. Always use limit orders (Those that limit the price you are willing to pay. They will not be executed above your "limit price".) For the general market, watch out! It could be wise to put trailing stops, if you have not done so in the past on your general stocks. I have been selling the general market for the past month or so.

Stay close to your investments and seek out opportunities to sell and to buy.

Best to each, Doug

Before US Markets Open

It is difficult to believe that this correction would be so drastic. A correction was certainly due, but WOW! Looking at the 1-Year chart on gold at Kitco.com, it is easily seen that the long term bull market is still intact. For the last twenty four hours, gold hit a high of $660.90 last night at 10:21 (NY). The low was $636.30 this morning at 2:52. The current price $650.40. The low was a spike down from volatility around $640. A blessing of the current correction is that the volume has not been that great.

Likely, we will see an opening in the US near the current level which is down from Friday's close.

I still believe we have a long way to go in the bull market, but it may take some time to get back up into the lofty levels of the last few weeks. Several analyst are seeing $715 as resistance. The run up was rather extreme. However, there is much more news on gold in the general press and more folks are beginning to look at gold. We should reach a volume of buying in the near future.

India which is generally a heavy buyer of gold is experiencing the lowest price since before Christmas. Also, the China news carries thoughts on increasing China's gold reserves.

Russia is reported to begin trading on it own exchange Oil and other Commodities in rubles on June 8th. This will put some additional downward pressure on the dollar.

Remember only the Lord knows these things for certain. We make only "educated" guesses and depend upon Him for results.

Best to each, Doug

The Correction to almost $650!

For 24 hours now gold has moved from $691.20 down to almost $650 twice ($561.10 and $652+). That is real scary, but $650 may hold.

I still see this as a cautious buying time. Look carefully. I just bought more QEE @ $0.36. I favor the very low priced stocks which should give the most bang for the buck with the resumption of the gold bull after this correction. I may just begin some more trading in stocks like this.

Good hunting and the best to each, Doug

The Correction - How Far?

Folks take a look at the charts for gold at www.kitco.com. The daily, 30-day, and 60-day charts all look bad for gold. However, take a look at the 1-year chart. The bull market in gold is still very much intact.

Our questions now are, as follows: How long will this correction last? How deep will it go? I had thought that, perhaps, $780 was going to hold as it was tested and proved to be support for several days. But that has been broken and gold is currently $671.80 down from a high of $695 over the last 24 hours. It could test $650, but I doubt it will go that low. We are likely to see a rapid recovery over the next few weeks. Remember, only the Sovereign Lord knows with certainty. After all, He is controlling even this.

I see these corrections as a time to commit more dollars to gold and mining stocks. Presently, I am a looking to add to my holdings in MRDDF, QEE, JNRRF,and possibly DROOY. Remember Buyer Beware! You should make your own decisions.

Fasten your seat belts and hang tight! These corrections can give you the thrill of a roller coaster.

Best to each, Doug

The Correction Slows, Some That Is!

Well, I did buy the QEE (Queenstake) today at $0.42. It took patience and a follow-up limit order today. By the way, QEE traded as low as $0.41 today and closed at $0.43 which seems to me to still be a reasonable buy. After all, it was above $0.55 a few days ago and is likely to return and even go higher. One does not need more than a few pennies increase in price to have a sizeable gain in percent and dollars.

CGDF (Columbian Goldfields) has traded recently as high as about $2.85, yesterday it closed about $1.95, and today closed at $1.88. This was recommended by Ken Coleman in a Special Flyer advertising The Investment Tracker. I purchased shares of CGDF at $2.42, $2.33, and $2.25. The prices followed the my normal success >> Buy and down it goes!

Gold has been trading between $675 and $691 with one downward thrust to $674 for the last twenty-four hours. It seems to be signaling an end to the current correction, but we will have to wait and see the action tomorrow. Silver has corrected in concert with gold.

These are exciting times, but I still see these corrections as a time to add to our stock of precious metals and mining stocks. By the way, the mining stocks are holding up well in spite of the rather serious drop in gold prices. That is encouraging.

I still believe the general market is much too dangerous for much investment and bonds are suffering, because of rising interest rates. By the way, do you believe the government estimates of the "low" price inflation. Check prices of the food and other consumables you buy each day. Price inflation seems to be increasing except in real estate. Observe the drop in value of condos these days. WOW!

It takes courage and commitment to hang rough during these times and to take careful action. Once again, we must prepare for these times by studying the trends and markets and making careful plans. Then we must commit them to the Lord, act on our plans and expect Him to give us the results or point us in a different direction.

Best to each, Doug

The Correction, The Correction!

Well, the first "real" correction seems to be here. For 24 hours gold hit a high of $720 at 10:39 last night (NY) and a low of $685.10 this morning at 10:11 about fifteen minutes ago. It is now $690.10.

I put in a limit order for QEE at $0.42 about 10 minutes ago. It has yet to execute. QEE traded for $0.44 on the last trade, so I may have missed it.

This the time to pick a few more buys at lower prices for the time being. At least that is what I am doing.

Best to each, Doug

Gold to $730!

Wow! What a run up to $730 at 6:20 am (NY). Since then it has backed off a good bit and is now trading at $716.80.

These aberrations are to be expected. I am still not a seller, and in fact I am searching for buys. We can buy in to low priced stocks speculations which drop a good bit when other people get nervous about gold price falls. A couple at which I am looking are CGDF Columbia Goldfields, Ltd. currently $2.15 (Which I bought yesterday at $2.33 and $2.12) and QEE Queenstake Resources Ltd which I own and am trying to buy now at $0.46 (This year it has traded from a low of about $0.25 to a high yesterday of $0.55,). As I said these are speculations and should only be purchased with speculative currency which is not essential to your welfare. BUYER BEWARE! You are on your own on this. I am only reporting which I am trying.

By the way, I suggest you examine the low priced internet brokers. I use both E*Trade and Scottrade. There are others you might want to research before you make a final decision. While I pay about $7-$10 per trade, others pay $40 or more through full service brokers. Over time, the savings has been substantial for me.

How low will this "correction" go? I do not know! How high will gold eventually go? I do not know. However, it is fact that the dollar is down a good bit now and there seems to be nothing on the horizon to stop the down hill slide. The budget and trading deficits are certain to come home to haunt us in time. No person or government can defy the immutable laws of the Sovereign God forever without His wrath being poured out upon the rulers and people of that nation. Our time is here or will come in God's fullness of time. Put your trust in Him, because He has proven to be unchangeable and full of love for His people.

Best to each, Doug

Gold Staying Above $700

Gold continues to romped. It is hanging above $700, and I expect $800 to be easily passed before the end of the year. The 24-hour high was $725.90 at 9:21 this am (NY) and the low was $699.50 yesterday at 2:19 pm. Now it is $720.10. Silver is $14.94 pushing for $15.

So called "corrections" have thus far been momentary and short. It is rare for even gold to move up so rapidly without some type of larger correction. I see any as an opportunity to buy more. I bought CGDF this morning as a speculation (Paid 2.33 and it promptly dropped to 2.20, as usual). You might look at it.

DROOY is up to 1.85, so my GTC buy at 1.45 is very likely to die a natural death without being executed.

If you own gold stocks, or any other stocks which have options, there is a way to profit without selling your stocks. You can sell CALL options against the box (putting up the shares you have on hand). You will receive cash in your account for the CALL options and then hope they expire before they are executed. Always try to sell options with shorted expiration dates with strike prices (the price at which they could be executed - calling for your stock) that are high enough that you would be pleased to sell at the strike price. If the options are executed, your stock will be sold for at the strike price. If they expire without being executed, you can do the same thing over and the cash you received for the sale of the options is yours free. This is a technique which has little risk and gives you instant cash to use.

If you are worried about the rapid runup in the price of gold and mining shares, you could put trailing stops on some of the shares. I am not now using the stops. If you do, I would suggest you leave a lot of space >> perhaps up to 25% trailing stops.

The following quote was contained in GATA communication this morning. It may or may not be It correct. I do not know. "It is our understanding that long-term gains in the gold (silver) ETFs would be taxed as collectibles at 28 percent, according to the gold ETF prospectus. However, Ian McAvity pointed out that Central Fund of Canada (CEF) is considered a passive foreign investment company with shares not convertible into bullion. CEF is believed to qualify as a PFIC to enable the 15 percent capital gains tax treatment, which can be an important factor for investors."

Best to each, Doug

The Big Kahuna?

Jim Sinclair said, "The question you have is simple: Is this the BIG ONE? The answer is YES! It is so reminiscent of the move from $400 to $887.50 in the 70s that this must be the Big Kahuna of $400 to $1650 in the “Gold Bull Market of the Millennium.”"

The upward moves in the price of gold have gone ballistic. They are moving exponentially. From About March 22 to April 13, gold moved from $550 to $600 in the 22 days. Then from April 13 to May 9, gold moved from $600 to $700 in the 26 days. This shows a significant and rapid increase in upward momentum.

The substantial moves have been credited to the Iranian nuclear situation with the growing tensions between the US and Iran, and even with Europe. It may have also received a push with China'announcementet of a move to purchase more gold for reserves. China has also declared a program to increase strategic reserves of most needed minerals and oil.

I doubt that there will be substantial corrections in the price of gold along the way. However, I would certainly consider any as buying opportunities. By the way, there are rumors (I emphasize "RUMORS") that the ETFs on precious metals are not fully backing their shares with gold. Such has happened before.

For me, I will be adding to my stock of metals and mining stocks along the way. There will be a time to sell the stocks, but it is not now in my opinion. At times, it will take courage to resist the temptation to sell.

Timing is the critical part of investing into which we have very limited insight. Technical analysis always tells us that trends continue until they end. Emphasis is given to the movement of price and the volume of sales. Sage advise is do not fight the trend, but attempt to follow along with it.

For the last 24 hours, gold hit a high of $704.40 at 10:02 (NY) this morning and a low of $690.60 at the same time yesterday. It is now at $698.90. Silver is at $14.72.

Most mining stocks are off a bit today from yesterday's close. For example, DROOY is down 3 cents to 1.56; CDY is off 4 cents to 3.15SSRIRE is off 12 cents to 23.83. However, the prices are up from the recent lows.

We will see if this is really the Big Kahuna over time. Timing is always in the hands of our Sovereign God. Of course, He is in control and laughs in derision at the folly of man. A major folly is the Federal Reserve Notes which we use as money. This is a violation of scriptural law which thoroughly condemns the use of unequal weights. These notes are out and out fraud! That is why they are losing value as the Fed attempts to exercise control. The dollar will decrease in value as the supply increases and then accelerates as foreign banks slow or stop supporting our debt. Then, the Lord will really laugh. But He is giving you this forewarning.

Best to each, Doug

Gold Continues to Glitter!

Gold romped upward again while I was away for a few days. There was rain in middle Texas, too, as usual when I'm traveling. One of these days, I will be around for the rain of which we have had far too little for a long time.

Gold hit $686 in overnight trading about 7:45 pm (NY) yesterday. It spiked down to 671.60 at 10:12 this morning and is now at $676.60. I believe more people are starting to see the substantial loss in purchasing power of the dollar.

Silver is at $13.71, which is not too shabby, but well below the recent highs which exceeded $14.00. Silver will continue to shadow gold, but is a little depressed at present.

The following are some of the prices of mining stocks I generally own and follow: BGO 5.63; CBJ 3.61; CDY 3.41; DROOY 1.50; EGO 5.24; GSS 3.41; HMY 15.69; IAG 9.58; MFN 8.76; MNG 3.80; MRB 3.20; MRDDF 1.75; HEM 55.29; NTO 6.10; PAAS 21.60; QEE 0.43; RNO 2.18; SSRI 21.73. The lower priced among the group are more speculative, but may in the long run offer the greater profit during the "Gold Rush."

The better way to protect wealth is to own the precious metals as bullion coins, but the Gold Rush, when and if it comes will give you a much bigger bang on the mining stocks. There are very few of them in comparison to the broader market shares and capitalization. Thus, when there are many more buyers chasing them, the prices explode upward.

As always, BUYER BEWARE! What seems correct for me, may not be correct for you. Study and learn before you leap or invest.

Keep your eyes and focus upon King Jesus and always submit your life and actions to Him >> Completely.

Best to each, Doug