One Last or Just Another Opportunity????

Gold down below $610 is providing an opportunity for more purchase of metals, CEF and ETFs, and mining stocks for those of us who take the long term view on gold. It is an historic store of value while the unbaked paper currencies drop in purchasing power.



This 10-Year Graph of Gold prices reveals that at the end of August and early September gold prices have moved upward almost every year. That is quite a precidence which should follow this year as well with all of the unrest and danger around the world. People should begin to search for stability of purchasing power and protection of wealth. That usually means gold!

With DROOY around 1.29, BGO about 5.00, and other mining stocks similarly priced, we have another buying opportunity. Remember our priority should be for the metals, then CEF and the ETFs, and finally mining stocks.

Keep your eyes on the Lord and longer term investing for true safety. Do not let the concern over day to day price fluxuations worry you. Long term, the dollar will move down and it will take many more dollars to purchase gold and mining stocks.

Best to each, Doug

The above 1-Year Chart on Gold prices clearly shows that gold from a low of about $400 at the end of August last year, climbed through most of April of this year. Will there be a repeat of this beginning this week or next? Only the sovereign God of all knows for certain. However, the commodities are indicating a inflation in prices thereof. This seems to be the only sector of the economy which is rejecting a recession or worse.

For two plus years the U S economy has been supported by consumer spending based primarily upon the inflated price of real estate, particularly, homes. Not only did investors get into the act by early purchase and then flipping to the next investor at a higher price, but the housing market caused a major increase in employment in all areas of the real estate market. The increase dollar value of housing has slowed, leveled, and even begun to drop in many areas of our nation. This is strongly deflationary. The economy must slow and this is far from a rosy senario.

This blog is written not to make you rich, but to point to financial problems and situations for you to preserve and stretch whatever wealth you now possess. The fact is that the dollar will continue to go down in value. Historical money: precious metals, particularly gold will retain its value in the market place. Thus, it is a sure alternative to every paper currency in the world today. Facing this realistically will enable you to prepare for the future.

In investing, timing is critical. However, it is much better to be early than to be a day or a week too late. Gold around $616, as it is today, is very likely in a good buying range. However, the need for precious metals and mining stocks in your portfolio depends upon the composition of your present portfolio and your risk tolerance. There is no need to take risks which will cause you great concern and worry yielding in the extreme serious health problems.

It is wise to learn about personal finance and economics to prepare your family and friends for the world in which we live. The Bible has many references to money, debt, and finance. Remember this is the source of true knowledge. We are told to obtain knowledge and the wisdom to apply this knowledge. In the book of James, we are told that we do not have wisdom, because we do not ask. Have you prayed for wisdom recently? Each of us must urgently and diligently pray for wisdom from God.

He will provide freely great wisdom to His people.

Best to each, Doug

Gold Remains in Tight Trading Range

For the last 24, Gold hit a high of $623.70 today at 9:04 and a low of $617.50 yesterday evening at 9:17. It certainly is not very exciting at present unless you are interested in increasing your stake in gold and mining stocks. If you are, be cautious and buy slowly. We may see a little lower price during the next two weeks.

Soon, the fall season will arrive. With it, we are in hopes of RAIN, of which we have had very little for too long a time. But the period of fall through December has been a higher time for precious metal prices. This is something for which we must look forward.

Remember to keep your eye on the long term bull market for gold. Rather, it is a long term bear market for the dollar. Go to Kitco.com and look at their 1-Year Gold Chart. The bull market on gold remains solidly intact.

Gold was languishing around $400 an ounce a year ago. An increase to above $600 is still a good return. There will be more in the future!

The long term downward trend of the dollar and most other paper currencies is assured by the government trend of ever increased spending and by central banks of the world, particularly our Federal Reserve, continuing to create "money" out of thin air. They no longer need to print, but simply through the fractional banking system do it with computer blips.

Governments are bent on ever increased spending for welfare and other unconstitutional causes. They are determined to avert recessions and depressions by increasing the "money supply". They hide this by manipulating statistics on unemployment, consumer spending, and all other market statistics. For example, the broad money "M3" was recently dropped to conceal the total "money" in circulation from the public. Thus, the dollar must lose some thirty to fifty percent of its purchasing power during the next few years.

Please, take a long term view which will reveal that things are better than dollars and, particularly precious metals which have retained value over time. Make plans accordingly and commit your plans to the Lord our God and He will see you through. (Ps. 37:5,6 and Pr. 16:3)

Best to each, Doug

Silver Ahead of Gold - Economy Not Rosy

Gold continues to bounce around with no consistency of short term direction. The high for the last 24 was $630.20 at 10:02 today and the low $620.60 yesterday at about the same time. Silver, which appears to be doing a bit better than gold, had a high of $12.63 today at 8:57 and a low of $12.06 yesterday at 10:28. (NY times)

Silver has remained in a trading range of 12 to 12.50 for almost all of this month. It is higher than it was in July. PAAS is holding at 22.01 and SSRI at 23.75. Both of these are sound silver mining stocks. On the other hand gold has been more volatile trading in a range of about 650 to 613. Quite a ride, eh what?

The precious metal mining stocks are up so far today. Of course, the market has been open only about an hour now. The DJI is off 11.12 to 11330+. There is a lot of indecision in the general market. It remains a dangerous place to play.

There is a lot of news indicating that the housing boom is beginning to lose steam. Mortgage companies are placing fewer new loans, foreclosures are up, and the inventory of new and resale homes is increasing. The economy has been fueled by the housing boom. Think about it! Mortgage companies and real estate agencies added employees. Builders added employees, as did suppliers of construction materials. Now all that is beginning to slow. There will be a reduction in employees which is already beginning. Thus, the economy will slow down.

On the oil front, most of the Venezuelan oil will now go to China as recent deals are being finalized. Also, much of the foreign oil is under the control of countries which are either enemies or not friendly toward America. So, even the oil situation will put more downward pressure on the dollar.

In spite of glowing manipulated reports on the economy, all is not well. Being forewarned is critical to financial survival. I still believe that precious metals, mining and other resource stocks are the hedge against financial loss. Of course, it is important to get out of debt. As scripture tells us, "Owe no man anything except to love one another."

Always, keep you focus upon King Jesus. He must be Lord and Savior for peace of mind and spirit.

Best to each, Doug

Gold Showing Some Signs of Renewed Life

For the last 24, gold hit a high of $626.20 this morning at 8:41 and a low of $611.90 yesterday afternoon at 4 pm and is now $624.70. These are not exciting prices, but the direction does appear to be upward after last week's aberration. Silver's high was $12.38 today at 10:01 and low of $11.95 yesterday evening at 9:21 and is now $12.35. All times are NY.

Almost all the mining stocks are in the green today. Here are some BGO 5.2301; CBJ 3.15; CDY 1.60; DROOY 1.32; EGO 4.49; GPTC 0.157; GSS 3.24; HMY 13.90; IAG 10.35; KRY 2.78; MRB 3.01; NEM 51.70; NTO 4.67; PAAS 21.14; QEE 0.33; RNO 2.25; SSRI 23.072, and XVE 9.50. CEF is at 9.07. These are not run away prices, but they are moving upward again.

Typically, the mining stocks and precious metals move up September through December. Will this be a typical year? Likely, but thus far the year has been strange for the precious metals. We have had a bumpy ride!

It is important to focus on the long term. All indications are that the dollar will continue downward and the precious metals will continue their bull run. Technical analysis tells us that trends continue until they end. That sounds trite, but is true. The long term trend for the dollar is currently down and up for precious metals. These trends would have to be broken for either to end and that does not seem to be indicated at this time.

Remember that it is certain that our Sovereign God is in control. However, He does give us brains which we must use to make plans. We should pray over our decisions and plans and commit them to Him for success.

Best to each, Doug

Gold Showing Some Signs of Renewed Life

For the last 24, gold hit a high of $626.20 this morning at 8:41 and a low of $611.90 yesterday afternoon at 4 pm and is now $624.70. These are not exciting prices, but the direction does appear to be upward after last week's aberration. Silver's high was $12.38 today at 10:01 and low of $11.95 yesterday evening at 9:21 and is now $12.35. All times are NY.

Almost all the mining stocks are in the green today. Here are some BGO 5.2301; CBJ 3.15; CDY 1.60; DROOY 1.32; EGO 4.49; GPTC 0.157; GSS 3.24; HMY 13.90; IAG 10.35; KRY 2.78; MRB 3.01; NEM 51.70; NTO 4.67; PAAS 21.14; QEE 0.33; RNO 2.25; SSRI 23.072, and XVE 9.50. CEF is at 9.07. These are not run away prices, but they are moving upward again.

Typically, the mining stocks and precious metals move up September through December. Will this be a typical year? Likely, but thus far the year has been strange for the precious metals. We have had a bumpy ride!

It is important to focus on the long term. All indications are that the dollar will continue downward and the precious metals will continue their bull run. Technical analysis tells us that trends continue until they end. That sounds trite, but is true. The long term trend for the dollar is currently down and up for precious metals. These trends would have to be broken for either to end and that does not seem to be indicated at this time.

Remember that it is certain that our Sovereign God is in control. However, He does give us brains which we must use to make plans. We should pray over our decisions and plans and commit them to Him for success.

Best to each, Doug

Another Correction in Gold?

Manipulation in full swing or just a temporary sandy spot in the road to higher precious metal prices? Regardless, today gold hit a high of 631.40 early at 4:50 and moved to a low of 613.80 about four minutes ago. The year chart still indicates a strong upward trend with this correction looking to be very near the bottom now. Were it to break below 600, then it will go farther.

This is providing another opportunity to add to your gold and mining stock holdings. Buying time is very near with HMY below 14 at 13.77; DROOY at 1.30 (below this price, it looks extremely good to me); BGO is off 0.34 at 5.06 now; IAG is holding well at 10.25, and QEE at 0.34.

As always be slow and careful to buy. The Canadian Fund (CEF) is holding well at 8.87. Both the silver stocks are still holding strong: PAAS 20.57 and SSRI 22.88.

Tomorrow is the option expiration date for August. Always strange things happen at that time. Those in want to make much on their options.

Best to each, Doug

Wild Ride in Gold Prices

Gold has gone from a high of 632.90 yesterday just after noon to a low of 620.30 at 8:39 this morning. It is now at 625.60. The dollar has been slightly stronger, but most paper currencies have moved sideways over the period.

I cannot help but believe that the dollar price of precious metals is still being manipulated by central banks. The price of gold is too low when compared loss of purchasing power of the dollar. Unbacked paper currencies have value based upon the FIAT power of governments to force their use as "legal tender" and the acquiescence of people to use them. The latter source of value dwindles as people (around the world) begin to distrust the currency. We are seeing the early stages of this as Russian and Asian central banks have started reducing the amount of dollar instruments in their reserve. Were oil to begin trading in currencies other than the dollar, this will accelerate rapidly. When will this begin? It does not seem to be far away.

Tomorrow we will be "treated" the both the consumer and wholesale price indexes. These are the "very accurate" government reports on inflation. Each is cooked so much as to leave them without credibility. However, it seems that investors will act in the markets using these as a guide.

BEMA Gold (BGO) just released second quarter reports. The revenue more than doubled from the second quarter of 2005. These record earnings were reportedly due to the increase in the price of gold and increased production. This is one of the stocks in my core holdings. The last trade in BGO was at 5.26.

The mining stocks are proving more buying opportunities at present with DROOY at 1.28. The silver stocks PAAS at 20.50 and SSRI at 22.53 are holding up very well.

Best to each, Doug

Dollar Down Again

Check out this post on by James Turk on Gold Money. He clearly indicates a lower dollar. http://goldmoney.com/en/commentary.php

Gold has been as high as $651 and is now trading at $650.30. Most of the mining stocks are headed higher, but the rush is yet to begin. The DJI is now 11217.54, but still has not returned to its high. The general market is a dangerous and difficult play ground these days.

If you want to play in the general markets look for dividends and defense stocks. High dividend payers; such as, ACG, FAX, DSU, VVR, and Canadian Oil Trusts (BNEUF and NOIGF) might be considerations for those interested in income. Defense stocks like AAMU (ammo producer) and FRPT (armored vehicles) are possibilities. Perhaps, JNRRF (Uranium)and PHO (water). I stay heavily in mining stocks.

The recent economic reports, doctored as they are, failed to reach optimistic estimates and are clearly showing a slowing of the economy. John Mauldin's muddle through economy is exhibiting itself more each week. The summer doldrums are not yet over.

The frugal people will have low debt and spend less to free up funds for emergencies and investments these days. It is not a time for high debt and free spending, as many are doing. Also, it is wise to maximize income where possible. However, the income is never the true key for success. Whatever the income, it must be managed to get the maximum value regardless of the amount. The amount left over after necessities are covered is the measure of financial success. Remember savings is
foregone consumption.

I suggest you plan this way. Commit your plans to the Lord and trust Him to provide the success. Be sure and thank Him!

Best to each, Doug

Dollar Reserves Are Shrinking by Design

From Reuters, today: The Bank of Italy reduced its dollar reserves from 84% down to 63% during 2005. "Our expectations of Fed policy did not play any role," said an unnamed bank official.

"The emerging market economies of Asia and the Middle East have already started lowering their dollar exposure. . . .The broad point about the reserve story is that it is about diversification out of dollar given the risks. The pound seemingly is increasing in prominence as an alternative." (Tim Fox, forex strategist at Dresdner Kleinwort in London.)

Countries such as the United Arab Emirates and Russia have said they are shifting out of dollars and into other currencies like the euro.

From these reports, it seems that the shift is underway. We must pray that it will not culminate in a massive exit from the dollar. That would be a financial disaster for us and for much of the rest of the world. The central banks of the world know this fact and would like to sneak out of some dollars over time to prevent a sudden great loss in the dollar value and their reserves in dollars.

As always such news is good for precious metals and mining stocks. Gold has been showing more life over the last week. For the last 24 hours, gold hit a high of $653.50 this morning at 8:42 and a low of $638.60 yesterday at noon. Gold is currently at $650.10 and looks to be moving upward. Silver has been showing signs of life, as well, with a high of $12.58 today and a low of $11.95 last evening.

Mining and gold stocks: BGO 5.73; CBJ 3.39; CDY 1.72; CEF 9.26; DROOY 1.44 (Glad to have added some at 1.33 the other day); EGO 4.81; GPTC 0.19; GSS 3.13; HMY 14.31; IAG 9.96; KRY 2.73; MRB 3.18; NEM 52.90; NTO 5.31; PAAS 20.58; QEE 0.38; RNO 1.88; SSRI 21.63; XVE 8.35. All are responding fairly well.

The DJI have moved above 11,00 to 11,310 or so. That is good news for those in the general market. But I still believe there is great overall risk in general stocks. I stay with gold and silver bullion; mining, natural resource, and defense stocks; high dividend trusts; and foreign currencies. For foreign currencies, I use World Markets of Everbank.com. For the stocks, I use discount internet brokers which offer quick trades and low commissions.

Once again, we are looking forward to worship service on the Lord's Day. As Christians, it is our responsibility to meet together with the household of faith in corporate worship. Certainly, we can each go to the Lord directly, but He commands us to join in corporate worship. He even gave us an example of this as He lived on this earth. Dare we insult Him by not joining in corporate worship? We must not!

Best to each, Doug