Could the Bottom Be In Now?

For the last 24 hours, gold hit a high at $586.90 early this morning at 3:48 up from a low of $580.20 last night at 10:12 (NY). It is now at $579.90 and seems to be headed back up. If it does go back above and stay above $580 today, one could say that there is support around $580, possibly between $576 or so and $580. That would be good news in the short term. The long term bull market in gold continues to be strong.

As mentioned in the past, I bought a Call option - GOXIH. This is the September GOX Call at 140. The GOX which is a composite of several mining company stocks is currently at $135.50. If you can take the risk, you might look into the GOX September or later calls. One thing about options, the amount of the risk is limited to the purchase price plus the commission. Therefore, one knows exactly how much he is risking.

I will be out of pocket most of this week. The FOMC meets this week for another rate hike. It is expected to be .25%. There is always the questions of how much it will be and will there be more. It is certain that Ben will confuse the issue with Fed speak after the meeting. He is almost as good at that as Greenspan was. Of course, Greenspan chimes in every now and then even though he is no longer directly involved. What an ego he must have.

Our markets will be closed over the 4th of July week end. That will have an impact upon trading this week. I may be able to post an update on Friday if I can catch up enough on what has happened.

It is wise for us to recall how many of our founding fathers suffered and died to create the government we initially had. Looking back on our founding document, The Constitution of the United States of America, it is a great document with very few faults. However, today, it is seen by almost all of our politicians as simply a piece of paper which must be ignored and replaced by a multitude of unconstitutional laws which limit the life, liberty, and property of the citizens.

We need statesmen and not professional politicians in elected offices. A good government always fulfills the responsibility, under God, of protecting the life, liberty, and property of its citizens from all threats foreign and domestic. It must protect the free market without involving itself is regulation and other meddling therein. Examine the USG today and compare it with these principles. What do you find?

To celebrate our Independence Day, let us those of us who are called by His name, humble ourselves before the Sovereign God, seek His face and pray to Him, turn from our evil ways, then He will hear from Heaven, forgive our sin and heal our land. (2 Chron. 7:14) That is His promise to His people. Let us pray these words to Him and see Him act in glorious ways.

Best to each, Doug

U. S. to Release a 24-K Gold Buffalo

News today at http://www.resourceinvestor.com/pebble.asp?relid=20983 is that the Mint is preparing to release a 0.999 Gold Buffalo $50 coin. The proof is scheduled to be sold at $800 and the others at 5% to 7.5% premium over gold spot price. THAT IS NO BARGAIN!

The summer doldrums remain in full force. Gold is struggling to climb, but is meeting some resistance. For 24 hours the high was $588.60 yesterday at 11:31 a.m. and the low $572 this morning at 8:25 (NY). It is now $580.20.

DROOY is off a bit to 1.29 and the mining stocks are mixed at this early time of the market.

Dollar is stronger, because of the hedge funds and central banks playing in the currency markets. The recent economic indicators are falling short of expectations, but the dollar bulls reign anyway.

Remember, each of us has the obligation and the opportunity to join in corporate worship this Lord's Day. Though it is our duty, worship is a privilege and becomes a joy with regular participation. Do not neglect the "gathering together of the saints as is the practice of some."

Best to each, Doug

Gold Holding Firm Higher

For the last 24 hours gold has been $594.70 for high and $580.30 for low. It is now $584.80. That is the good news.

The bad news is that those who missed out on DROOY at 1.16-1.17, it is now 1.32. Of course those who bought at 1.16 or so are rejoicing now. If you did and have quite a number of shares, it might be wise to put a 10-15% trailing stop on a portion of your shares. In mining stocks, I sometimes use the trailing stop and pray that it is never executed. Of course, the trailing stop follows the price of the stock as it moves upward locking in the profit as it goes.

Those of you with risk tolerance might consider purchasing calls on GOX an index several good mining companies. I purchased GOXIH which is a September call @ 140 today for 8.10. Gold should be higher in September and the mining stocks will follow. Of course, the past is only an indication of what the future MAY be.

It is not absolutely certain that history will repeat. After all, we are moving toward the end of time as we know it and the Great White Throne of Judgment. That will be a wonderful event for the all of the children of King Jesus.

Best to each, Doug

Bouncing Off A Double Bottom?

Take a look at the 60 day gold chart on Kitco.com. It looks as though we are beginning to bounce off a double bottom. I would say that it is not exact yet, but seems to be developing. That is the good news! Gold is a bit higher and the mining stocks are responding accordingly.

For the last 24 hours, gold hit a $579.20 high and a $568.30 low later today. It is now at $574.50. Silver is $10.57.

Gold and silver are both in over sold range. However, the summer doldrums have not fully run the course. The is historically a bounce in July, but the real climbs generally come later into fall and winter.

Some of the stock prices are as follow: BGO 4.73; CBJ 2.54; CDY 1.83; CEF 8.54; CGDF 1.40; DROOY 1.25; EGO 4.59; GSS 2.75; HMY 13.39; IAG 8.83; KRY 3.11; MRB 2.92; MRDDF 1.16; NEM 50.20; NTO 4.50; PAAS 16.76; QEE 0.36; RNO 1.73; SSRI 18.04; XVE 6.91. Almost everyone is higher today.

Even the DJI is up today to 11085. At least it is above the 11000 barrier. This remains a very dangerous market.

The dollar is not faring well at present, even though it may do so in the short term. Long term the trend is down and there seems to be nothing on the horizon to end this trend. The trade and budget deficits continue to grown each day. A day of reckoning will arrive. The books are always balanced in the end.

Whether the balancing takes place here or in Heaven, the Lord always remains sovereign in all things and neither He nor His word change. He and it remains steadfast forever. Depend upon Him and live in His way to have ultimate success. After all, He works all things to His glory and His people's good. Praise the Lord!

Best to each, Doug

It May Not Be The Bottom Yet!

I believe we are very near the bottom of the correction. However, we will likely have to suffer through June and July before there is larger movement upward in the price of precious metals. If true to history, the early Fall and Winter will produce higher prices.

For the last 24-hour period, the high was $574.20 yesterday at 11:13 (NY) and the of $558.80 today at 0:22. Silver high for the same period was $10.13 and low was $9.78 at almost exactly the same times. Gold is presently $567.50 and silver $9.93.

Almost all mining stocks are a bit higher today with DROOY at $1.17 which I still believe is a good buying price.

Buying always depends upon your existing portfolio and available cash. If you do make the decision to buy, I would recommend you use caution and ease into with a few shares at a time. At these prices, I do not recommend stop orders. Those should be used when we see the prices moving upward.

By the way, I have been asked several times whether one should buy collector or bullion coins. The difference is the "premium" which is charged for collector value over the bullion coins. Often, we have seen the collector value escalate very rapidly offering great profit potential as collectors place increasing value on the better coins. This potential exists and has been realized in the past by knowledgeable investors. However, I seek to buy the bullion coins with the least premium over the value of gold. In this way, one can obtain the most gold at the very lowest price.

If you have collector coin knowledge or a reliable dealer who does, you could choose the collector coins. If so, go for the coins in the best possible condition and most rarity. I generally avoid these, but that is my prerogative. You make your own decisions.

Best to each, Doug

The Correction Continues

For 24 hours, gold hit the high of $611 yesterday morning at 10:43 and a low this morning of $581.80. It has bounced off the low to $584.80 at present. The 200 Day Moving Average is approximately $544. The present correction has pushed the price closer to this average.

The Privateer said Friday that the Central Bankers of the world have begun to recognize price inflation that each of us has seen for several months. To combat that, interest rates are being raised by Asian and European banks "to combat price inflation."

This apparently is having two impacts: (1) Individual investors recognize the increase in prices at the stores and begin to cash out of paper assets to gain liquidity to meet cover the increased costs and (2) The increased interest rates attract cash from the low dividend paying stocks (paper assets) of all types into money market accounts and other higher paying instruments.

Liquidity is no longer available at "bargain" prices (interest), so it is obtained by the exodus from paper assets. The DJI is well below 11,000 to about 10,781 now and most other world markets are down substantially.

The debt level of consumers, businesses, and governments in the U. S. is so great that most have reached the end of their borrowing capacity.

The summer doldrums continue with a vengeance. We must weather the storm. As with all other corrections, this one will end and the liquidity will be flowing into gold and mining stocks again. The real question is when? I do not have that specific answer.

With the mining stocks in, what I consider, good buying range, one could cautiously begin adding to his holdings. Look at DROOY 1.16; HMY 12.49; IAG 7.99; KRY 2.64; NEM 47.90; NTO 3.93; RNO 1.69; SSRI 17.15; XVE 6.48. Even CEF 7.79. Use caution and buy very slowly if you do. Use funds for which you have no immediate critical need.

There will not be another post until this week end as I will be out of pocket. Hang tough on your holdings.

Look to the Lord for the only true security. Depend upon Him for the results, but do the best you can. Then praise Him for His blessings!

Best to each, Doug

Short Term Gold Suffers the Doldrums of June and July.

For the last twenty-four hours, gold hit a high of $611.40 at 9:28 this morning and a low of $601.30 at 3:31 earlier at 3:31 (NY times). Gold continues to languish short term. I say short term, because there are too many influences which long term will force the bull trend to continue for some time into the future.

The www.resourceinvestor.com pointed out this morning that gold adjusted for inflation compared to the $800 it was in 1980, is only about $252. Thus it is much lower than it should be. This source listed as positive to gold easier participation by investors through the ETFs; conversion of Middle East petrodollars to gold; Asian central banks adding gold to reserves; declining production of gold due to delays and shortages of equipment and manpower; continuing global political and religious tensions; and others. I have no doubt that the bull trend will resume and remain intact for many years in the future. There will be corrections along the way.

The mining stocks are in, what I believe to be, reasonable buying ranges for adding to portfolios. DROOY 1.32; HMY 13.41; IAG 8.72; KRY 3.72; NEM 49.68; NTO 4.15; PAAS 17.24; QEE 0.36; RNO 1.79; SSRI 18.05; XVE 6.95. CEF is currently 8.72. We could see them lower, but I believe we are very near the bottom of this correction. According the past history, we are in a down two month period. Follow the prices rather closely and make buy decisions based upon early upward price movement.

As this is written, gold is at $610.30 on a last move up slightly.

I trust that each of you joined with others in corporate worship yesterday. This must be a very important part of each Christian life. We notice a "hole" in our lives when we must miss corporate worship due to illness or other unavoidable situations. We are told "not to forsake the gathering together of the saints." We are a very special family: the family of the Living God.

Best to each, Doug

Short Term Gold Suffers the Doldrums of June and July.

For the last twenty-four hours, gold hit a high of $611.40 at 9:28 this morning and a low of $601.30 at 3:31 earlier at 3:31 (NY times). Gold continues to languish short term. I say short term, because there are too many influences which long term will force the bull trend to continue for some time into the future.

The www.resourceinvestor.com pointed out this morning that gold adjusted for inflation compared to the $800 it was in 1980, is only about $252. Thus it is much lower than it should be. This source listed as positive to gold easier participation by investors through the ETFs; conversion of Middle East petrodollars to gold; Asian central banks adding gold to reserves; declining production of gold due to delays and shortages of equipment and manpower; continuing global political and religious tensions; and others. I have no doubt that the bull trend will resume and remain intact for many years in the future. There will be corrections along the way.

The mining stocks are in, what I believe to be, reasonable buying ranges for adding to portfolios. DROOY 1.32; HMY 13.41; IAG 8.72; KRY 3.72; NEM 49.68; NTO 4.15; PAAS 17.24; QEE 0.36; RNO 1.79; SSRI 18.05; XVE 6.95. CEF is currently 8.72. We could see them lower, but I believe we are very near the bottom of this correction. According the past history, we are in a down two month period. Follow the prices rather closely and make buy decisions based upon early upward price movement.

As this is written, gold is at $610.30 on a last move up slightly.

I trust that each of you joined with others in corporate worship yesterday. This must be a very important part of each Christian life. We notice a "hole" in our lives when we must miss corporate worship due to illness or other unavoidable situations. We are told "not to forsake the gathering together of the saints." We are a very special family: the family of the Living God.

Best to each, Doug

Short Term, Gold Suffers the Doldrums of June and July.

For the last twenty-four hours, gold hit a high of $611.40 at 9:28 this morning and a low of $601.30 at 3:31 earlier at 3:31 (NY times). Gold continues to languish short term. I say short term, because there are too many influences which long term will force the bull trend to continue for some time into the future.

The www.resourceinvestor.com pointed out this morning that gold adjusted for inflation compared to the $800 it was in 1980, is only about $252. Thus it is much lower than it should be. This source listed as positive to gold easier participation by investors through the ETFs; conversion of Middle East petrodollars to gold; Asian central banks adding gold to reserves; declining production of gold due to delays and shortages of equipment and manpower; continuing global political and religious tensions; and others. I have no doubt that the bull trend will resume and remain intact for many years in the future. There will be corrections along the way.

The mining stocks are in, what I believe to be, reasonable buying ranges for adding to portfolios. DROOY 1.32; HMY 13.41; IAG 8.72; KRY 3.72; NEM 49.68; NTO 4.15; PAAS 17.24; QEE 0.36; RNO 1.79; SSRI 18.05; XVE 6.95. CEF is currently 8.72. We could see them lower, but I believe we are very near the bottom of this correction. According the past history, we are in a down two month period. Follow the prices rather closely and make buy decisions based upon early upward price movement.

As this is written, gold is at $610.30 on a last move up slightly.

I trust that each of you joined with others in corporate worship yesterday. This must be a very important part of each Christian life. We notice a "hole" in our lives when we must miss corporate worship due to illness or other unavoidable situations. We are told "not to forsake the gathering together of the saints." We are a very special family: the family of the Living God.

Best to each, Doug

Gold is Showing A Little Life!

For the last twenty-four hours, gold high was $617.10 at 10:40 (NY) and gold low was $603.50 at 3:43, both prices this morning. It is $615.20 as this is written.

Gold has moved slightly higher today and the mining stocks are responding very well. Here are some examples: DROOY 1.38; HMY 13.77; IAG 9.00; NEM 50.37; NTO 4.33; PAAS 17.48; QEE 0.37; RNO 1.83; SSRI 18.10.

If you looked up the referenced web site posted yesterday, you saw that gold historically for a few years has been down in June-August, and then has rebounded in September and through the fall and early winter. Given that the report is accurate, as it seems to be, we are seeing typical behavior. However, the drops this time around are quite substantial. As often noted, the long term trend is still intact and that is the way that I look at my portfolio. Maybe we will see a greater rebound this time around.

I would suggest that the current flight from stocks to the U.S. Dollar is temporary. It seems to the uninformed as a safe harbor for funds, because it had been in the past. However, more central banks, the latest is the Russian, are slowly and cautiously diverting reserves into other currencies, mainly EUROs, and gold. This trend should continue and encourage lower purchasing power of the dollar in relation to other currencies and the precious metals.

Investing is always an exciting and challenging business. Keep yourself informed and make the best possible decisions.

By the way, I added shares of Crystallex International (KRY) @ $3.94, currently $3.93, and Viceroy Exploration (XVE) @ $7.05, currently $7.20, to my portfolio yesterday. These were recently recommended by Bob Bishop who constantly stays on top of natural resource investments.

Be sure to join with other Christians in corporate worship on the coming Lord's Day. It is not an option, but a duty we can joyfully fulfill. The fellowship is a foretaste of the eternal fellowship with believers of all times in Heaven.

Best to each, Doug

More Downside Ahead?

Yes, gold is down again today! It has and seems to be continuing a series of lower lows on a daily basis, and even on a weekly basis. From a 24 hours high of $631.10 yesterday mid afternoon, it has successively moved farther down to $610 and change. It is now at $613.10. But continues to bounce around at a lower level today.

The longer term bull market remains intact, but the short term is dismal. We will likely see even lower prices in the short term. Too many times, I have traded in and out of mining stocks only to feel blocked out by rising prices after I had sold. Therefore, I do not trade very often, but hold to follow the long term trend.

Once this shake out has come to an end, I believe we will see a return to the long term trend over several years. As one considers the fact that gold has dropped significantly from the $740+ highs of a month ago, it is a scary situation.

Looking at the broader markets, and even international markets, it is obvious that they are doing no better. The DJI remains below 11,000 to about 10,900, and today is off about 30 points.

The dollar has shown a bit of strength against most currencies this week. In spite of the strength, there is just too much against the dollar long term and it will continue to drop in purchasing power against most other currencies. I believe the current strength is temporary.

I am looking for an end to the correction in gold, and am cautiously looking for opportunity to change more dollars into this reservoir of value. That time is most certainly getting closer each day. We must exercise patience and wait until the short term trend is more positive. The time will come and it may be soon! This web site gives a perspective which is worth consideration. Buy in June and July and walk away! Check it out! http://www.usagold.com/analysis/doldrums.html

Loses in investments are never fun! The saying, "Misery loves company." may be correct, but it is of little compensation when all investments are negative. This, too, shall end.

Keep you attention upon the Lord for complete peace and focus upon the long term view.

Best to each, Doug

Answer to Yesterday's Question is NO!

The correction was not over yesterday. For the last 24 hours, gold hit a high of $644.40 yesterday just after noon. The low is $625.50 today just before noon. While it traded in a narrow range of about $640 to $644 yesterday, it has dropped lower.

The 30-day Kitco.com chart gives a very bad picture, the 60-day looks slightly better, but the 1-year chart clearly shows the longer term bull trend is well intact. Thus, we must conclude that short term is showing weakness. So it is time for caution. I am still reluctant to sell, but could sell some call options with near term expiration dates on some of my mining stocks. That way, I immediately collect funds for use and do not have to wait long for expiration. Hopefully, there will not be a loss of the stocks to the buyer of the calls.

Exercise caution on any purchases. I favor purchase of bullion coins, Central Fund of Canada, and Metals Direct of Everbank.com. In this way, one is purchasing the metal and not the mining stocks.

By the way, though prices of mining stocks are somewhat lower, they have not fallen on extremely bad times.

This further correction is evidence of the fact that the masses had little interest in the rise of gold prices last month. There was some hype, but not nearly enough to warrant a beginning of the "gold rush." I am not selling, but holding for the long haul. The long haul may last for the next few years. I do expect this correction to end before we get into the fall, perhaps, as early as July or August. Prediction is dangerous, as there are many factors of which we are not aware. Only God has perfect foresight, because He is in absolute control of all. I am very pleased that He is in control.

It is time for very cautious buying if you are risk tolerant. I believe we should track the price of gold and wait until we see a positive change. We need a strong double bottom formation (W) with a pick up in volume.

I believe gold will go much higher long term, but unless you are without gold and mining stocks, it is a time for waiting. Study the markets and make your own decisions.

Best to each, Doug

Is the Correction Over?

For the last 24 hours, we have seen gold down to $636.80 yesterday afternoon and up to $645.30 early this morning. It is now at$643.10. For most of the time, it has bounced radically between about $640 and $644.

Is this correction over? Only time will reveal this to us. However, there are signs that it is at or near the bottom since there has been some heavy purchasing at the recent lows. It seems, however, that many shorts have not been covered. That is negative, but the market does tend to be deceptive at times. I do not believe that the precious metals will go much lower during this correction. However, there will be more corrections as the bull trend continues to dominate. Expect this volatility to continue, but perhaps at higher levels.

Though gold has dropped substantially over the last two plus weeks, the mining stocks have not dropped as significantly. More of the mining stocks must be held in "strong hands."

Examples are BGO 5.40; CBJ 3.17; CDY 2.34; CGDF 1.45; DROOY 1.60; EGO 5.011; GPTC 0.26; GSS 3.00; HMY 14.76; IAG 9.94; MFN 7.87; MNG 3.78; MRB 3.24; MRDDF 1.46; NEM 54.61; NTO 4.94; PAAS 19.48; QEE 0.40; RNO 2.06; SSRI 19.36. Central Fund Canada (bullion) is at 9.35.

The broad market remains very scary with the DJI off 80.92 @ 11160+. It is a jungle out there! The yield (dividends) on most of the general stocks is quite low. Bonds seem to be in trouble, as well.

All FIAT currencies, including the dollar, have no solid backing are valued only in relation to other currencies. Thus, investments in currencies have profit potential only in relation to weaker currencies. Selection, as someone said in a newsletter today, "It is like trying to pick the best among lepers." I believe it may not be quite that bad, but the quote does convey the truth.

This is the second day of the new week. I trust that each of you was blessed by corporate worship in a sound Christian church yesterday, as was I. Would that we could dwell in the house of the Lord all of our temporal life. However, as the Spirit brings us to life and sustains us, we will walk with the Lord here and for eternity as we each cross our Jordan into the promised land.

Best to each, Doug

Gold Has and Likely Forever Shall Be True Money!

Some of you may have heard of the great Austrian School of Economic Theory and its prime writer and spokesman, Ludwig von Mises. He has gone now, but has left a legacy of great writings. Here is an excerpt of one of those on the "new" (It was relatively new at that time, since Nixon had closed the gold door severing the tie of the dollar to gold in 1971.) FIAT money policy. "The most remarkable thing about this allegedly new monetary policy, however, is its complete failure. True, it substituted fiat money in the domestic markets for sound money and favored the material interests of some individuals and groups at the expense of others. It furthermore contributed considerably to the disintegration of the international division of labor. But it did not succeed in eliminating gold from its position as the international or world standard. If you glance at the financial page of any newspaper you discover at once that gold is still the world's money, and not the variegated products of the divers government printing offices. These scraps of paper are the more appreciated the more stable their price is in terms of an ounce of gold. Whoever today dares to hint at the possibility that nations may return to a domestic gold standard is cried down as a lunatic. This terrorism may still go on for some time. But the position of gold as the world's standard is impregnable." (L. von Mises, The Theory of Money and Credit (Liberty Classics, 1980), p. 461)

It is interesting that central banks and governments always profess that gold has not the slightest relationship to money. They say it is a barbaric relic of days gone by. However, both entities retain a reserve of gold in their respective vaults. I am reminded that their actions speak much more loudly than do their words. What do you think?

When one understands the significance of this fact, he must favor gold as a preserver of purchasing power. There was a time when the $20 Gold Eagle would purchase a handsome $20 man's suit. Today, that same Gold Eagle is worth a handsome man's suit, but one can not buy the suit with a $20 Federal Reserve Note. Of course, the Gold Eagle is worth about $700 in Federal Reserve Notes. Not a bad preserver of purchasing power is it?

Gold continues to languish at levels I thought we would not see for a very long time.
For the last 24 hours the high has been $644.90 this morning and the low $618.30 very early this morning. It is currently $634.80. Almost all of the mining stocks are marginally up today. DROOY 1.59; IAG 9.72; NEM 53.30; SSRI 18.91, for a few.

This is Friday and the U.S. markets will be closed for the weekend. It is also time that each of us should prepare ourselves for corporate worship with other members of Christ's Household of Faith: Our churches gathering together on the first day of the week. This is important and I pray that each of you will take this as encouragement and will participate in worship of and praise to the Sovereign Lord of all.

Best to each, Doug

Gold at Bargain Prices I Never Imagined!

For 24 hours gold has traded as low as $620.90 and silver at $12.03. What bargains! Will they go lower? Possibly, but both are greatly oversold at these levels. The speed of the drop and the depth of the drop is significant. A bounce to the upside should be forthcoming soon.

The long term bull trend in precious metals is still intact, but this is a serious set back.

BGO @ 5.38; CBJ 3.08; CDY 2.26; CEF 9.18; CGDF 1.44; DROOY 1.52; EGO 4.91; GSS 2.98; HMY 13.94; IAG 9.33; MDRRF 1.28 (w/o a trade today); MFN 7.49; MNG 3.51; MRD 3.19; NEM 50.93; NTO 4.75; PAAS 18.67; QEE 0.39; RNO 1.90; SSRI 18.25. All are suffering at present.

Be cautious about buying! If you are buying, ease into each position and use limit orders. If you are without mining stocks, I suggest you consider purchasing now. If you are holding mining stocks consider increasing your positions as the prices come off these bottoms.

We are finally getting some rain and more is predicted today. Hopefully, the Lord will supply a good bit of rain to relieve this drought. It is amazing how a little rain will turn the grass green almost immediately. What a blessing from above!

I am not selling mining stocks at this time and will likely add some more today or tomorrow. We must follow the trend; that is, the long term trend.

Note: I corrected the prices in yesterday's blog post.

Best to each, Doug