Possible Break Out of Gold

On Friday, gold had broken through the upper edge of the downward trend trough on the 1-Year Gold Chart from Kitco.com. This is a positive technical sign of a break out on the up side. For 24 hours, gold traded as high as $610.30 and as low as $598. The low was reached in overnight trading yesterday afternoon and the high about 10 a.m. today. It is now at $603.90. However, it must stay above $600 for a while and move toward $620 for any substantial rejoicing.

Almost all of the mining stocks are up today. Both the major silver stocks are doing well with PAAS at 21.60 and SSRI at 23.53.

I still have 10% trailing stops on some, not all of my DROOY holdings.

We must be patient and wait to see what happens in this crazy election. We should all rejoice greatly once it is over. The advertising will cease for a time. I started to say much of the false advertising would cease. The rhetoric is too superficial for me. And what the candidates say is seldom, if ever, what they do. Oh well, I said it anyway. Go out and vote for Tweedle Dum or Tweedle Dee if you like. Your vote certainly validates the system with which we are saddled. The right to vote is not equivalent to freedom. We retain the right to vote while our freedoms are being stolen away in the quest for power and personal gain.

There is increasing pressure upon the Asian nations to continue replacing the dollar in their central banks, and likely in individual bank and investment accounts. Speaking of the dollar continuing down the recent domestic product figures reported by AmericanCapitalist@taipangroup.com are 1st Quarter +5.6%; 2nd Quarter +2.6%, and 3rd Quarter +1.6%. Within the last quarter figure, the automobile industry accounted for +0.7% which is one of the lowest for the industry in many months. This does not seem to be a growing economy, but one struggling to stay alive.

Nevertheless, our Sovereign Lord Jesus Christ reigns supreme over all. Nothing can separate His people from His love and He works everything for our eventual good. We must praise and thank Him daily.

Best to each, Doug

Gold a Bit Higher

Gold has moved up to a high of $595.20 as of yesterday with a low of $579.30 also of yesterday. It is now at $593.50. The price is approaching the perceived resistance of $600. It must move beyond that and stay there for it to go higher. Perhaps, after the election, we will see the move.

Silver is at $12.60 which is a nice upward move, too. We will see more movement in both directions over the next few months.

The recent prices on mining stocks are still remaining at levels above recent lows. BGO 4.33; CBJ 3.65; CDY 1.54; CEF 8.35; DROOY 1.32; EGO 4.31; GSS 2.82; HMY 15.17; IAG 8.81; KRY 2.91; MRB 3.03; NEM 44.98; NTO 4.62; PAAS 22.12; QEE 0.24; RNO 2.70; SSRI 23.64; XVE 9.50. The reaction of these stocks prices were not as pronounced as were the prices of precious metals during this correction.

The general market, even though the DJI has moved and stayed above 12000 (now 12147.89), is still a dangerous place. The dollar is living on borrowed time, but may do so for months ahead. It has dropped a bit in the last few days against other paper currencies. We must keep in mind that all of the paper currencies are just that - paper. The precious metals should be the preferred store of value. The paper will depreciate and is subject to the whims of governments, but mostly to those of the central bankers.

We must place our trust, not in man and his changeable character, but in the Lord Jesus Christ Who is changeless.

Best to each, Doug

Gold a Bit Higher

Gold has moved up to a high of $595.20 as of yesterday with a low of $579.30 also of yesterday. It is now at $593.50. The price is approaching the perceived resistance of $600. It must move beyond that and stay there for it to go higher. Perhaps, after the election, we will see the move.

Silver is at $12.60 which is a nice upward move, too. We will see more movement in both directions over the next few months.

The recent prices on mining stocks are still remaining at levels above recent lows. BGO 4.33; CBJ 3.65; CDY 1.54; CEF 8.35; DROOY 1.32; EGO 4.31; GSS 2.82; HMY 15.17; IAG 8.81; KRY 2.91; MRB 3.03; NEM 44.98; NTO 4.62; PAAS 22.12; QEE 0.24; RNO 2.70; SSRI 23.64; XVE 9.50. The reaction of these stocks prices were not as pronounced as were the prices of precious metals during this correction.

The general market, even though the DJI has moved and stayed above 12000 (now 12147.89), is still a dangerous place. The dollar is living on borrowed time, but may do so for months ahead. It has dropped a bit in the last few days against other paper currencies. We must keep in mind that all of the paper currencies are just that - paper. The precious metals should be the preferred store of value. The paper will depreciate and is subject to the whims of governments, but mostly to those of the central bankers.

We must place our trust, not in man and his changeable character, but in the Lord Jesus Christ Who is changeless.

Best to each, Doug

Gold Bouncing Around

It has been too long since last I wrote. However, I was out of town last week and now am back trying to get settled in and up to speed.

The price of gold has done a bit of bouncing around over the last ten days. Of course, this is not unusual these days before the election next month. Speaking of the election, we are always told that it is patriotic to exercise our "right" to vote. Sometimes I wonder about that when all that we are offered is a choice between Tweedle Dum and Tweedle Dee. We need to have the opportunity of selecting "none of the above." Every day we must pray for the Lord to raise up statesmen who are God fearing and supportive of the best parts of our great Constitution. However, it seems as though the Lord is not doing that today.

Back to gold: For the last 24 hours, gold hit a high of $586.20 yesterday afternoon at 3:54 and a low of $572.60 earlier at 10:02. It is currently at $581.40. The mining stocks have not followed gold down by the same percentage of the spot price of gold. The mining stocks seem to be holding a bit firmer. Still it is likely wise to put in some trailing stops to prevent substantial loss. I like the 10-15% trailing stops if your broker permits.

I will try to post more often for a time. Hang tough on a substantial portion of mining stocks and keep physical gold to preserve wealth. The dollar is bound to fall.

Best to each, Doug

Gold Pushing Toward $600

Gold is at $593.40 now which is higher for the time being. It must break and stay above $600 to be on its way again. I really do not expect much excitement in the precious metals or oil until after the election. Both will be under pressure.

Of course, worsening relations with Iran or North Korea would instantly change things. All natural resources, particularly, precious metals should get a big upward thrust, because of the uncertainly and fear.

Meanwhile the DJI are again at 11967.75 pushing toward 12000 which many see as a magic number. This must bring encouragement to the general market investors. I still believe the general market to be a dangerous place for investments. I am not at all comfortable with the recent run up in the DJI. The optimism is misplaced as I see it.

Also, I have begun putting trailing stops on a portion of my mining stocks. 10-15% trailing stops are for insurance against a strong downward move. It is comforting to have this insurance from time to time. Trailing stops are neat, since the stop price follows the stock price as it moves upward. However, on a strong correction, the stop will be hit and the stock will be sold giving you more funds available to buy at or near the bottom of the move. Many of us will sleep better with the stops in place.

Make your week really great as you give praise and thanks to the Lord your God.

Best to each, Doug

Defying gravity!

The dollar is floating higher these days in spite of all the negative facts. Thus, the dollar price of gold is under pressure. Gold for the last 24 hours has gone down from $581.40 at 3:14 this morning to $569.20 at 9:27 and is now at $571.40. Richard Russell says that the question is whether the dollar is over bought or the gold is over sold. The markets will have to reveal this to us over time. I believe the key time will be the election.

Silver's high was $11.40 yesterday morning at 10:48 and the low was $11.07 at 9:25 this morning. It is currently at $11.14. Both precious metals showed some spirit over the weekend, but that could be discounted, because of the holiday here in America.

Just think, in 1492 Columbus opened the way for America. As I view the movies made of the past, I have come to realize the struggles of our forefathers. Just think of spending months on a tiny little sailing ship crossing an ocean. Or of weeks and months crossing a land without roads in a Conestoga Wagon. And we think times are hard now. We are soft compared to those of the early days in our country. Our biggest physical hardships are when the air conditioner or automobile goes on the blink. They really had it hard!

By the way, the DJI remains very high and fairly strong. To me, it is still a very dangerous market out there. One must use a great deal of caution.

Thomas Friedman wrote "There's no denying a need for a change." He hoped the democrats would win both houses of Congress by a very narrow margin (one seat in each). This way, the system would be balanced and it would be difficult for either party to steam roll much through. He has a point. We do need a change!

I rejoice in the fact that the one and only God of all is in absolute control and knows precisely what He is doing. He is the Creator and Sustainer of all.

Best to each, Doug

Gold Off 21.20!

Wow! Gold is taking another hit today. It is down 21.20 at 576.40 as this is written.

While we had hoped that the fall rally had begun, this shoots holes in that thought. We will have to wait some longer for the rally. There really seems to be no reason for gold to be dropping, but that is the way markets are.

The stack of evidence supporting a weaker dollar is very high. However, the reserve status of the dollar and its wide acceptance keeps the dollar bulls at their party. It will end! But we do not know when.

Long term the dollar will go down and the price of precious metals and mining stocks will rise as it will take more dollars to buy them. By the way, I was at our local Sun Harvest (health food store) this morning and noticed that Buddy's organically raised chicken quarters were $1.25 per pound which was a an increase of 26+% over the last week price of $0.99. That is just a sample of Doug's measure of price inflation. The manipulated CPI published by government fails to reveal the true among of price inflation we consumers see in the market place. I trust that you have noticed the same.

Of course, gasoline prices are down to just above $2 per gallon and that is some fuel for rejoicing. That too, is likely temporary. Much will depend upon what happens in the Mid-East. Hopefully, the Iran situation will be solved without an escalation of the wars in that region. It is yet to be fully settled.

Keep your eyes upon Jesus Christ and trust in Him for the only real security. He is King and Ruler of all.

Best to each, Doug

Gold May be Climbing Back on Track

Well, I am back and almost on track again. It is good to get away for a break, but great to be back again.

First, your attention is called to the 30-Day Gold Chart from Kitco.com. Notice that since September 22nd. Gold has been trading in a tight range from about $590 to $605. That is a higher level than during the previous two weeks. This could be the early beginning of the fall/winter rally. Almost all of the mining stocks are again moving up, albeit, slowly. It is a bit early to tell, and we have had a good bit of news about central banks playing their game of gold bashing by reporting gold sales. Yes, they are still at it. However, it is difficult to blame them. Were the public to realize the lie of paper currencies, they would be out of business. Yes, they are businesses. I hope you realize that the Federal Reserve is owned by the member banks. What a beautiful racket they have! Produce dollars out of thin air, lend them to governments, other banks, businesses, and individuals and collect interest. We could do it too, but the government would call that counterfeiting and put us in jail.



There is no doubt in my mind, because the evidence clearly shows that the dollar direction is down over time. It will take more dollars to buy everything as the supply is increased. Thus, we must seek the wealth preservation of precious metals and things which are necessary to sustain life.

John Pugsley wrote a book called "Alpha Strategy". It was an interesting book with a sound principle. During times of inflation, people begin to realize that everything will cost more in the future. His strategy was to buy necessities in bulk on sale at every opportunity. Then store them for use over time. Each time the prices of those items increased, you would have saved the difference. Not a bad approach.

Applying this principle while in Tennessee in about 1980, paper towels and toilet paper were at an extremely good bargain price during one of my trips into town. Therefore, I went to the store and bought multiple packages of both. The idea was really great as we had an abundance of storage space on the "farm". However, I was driving a small Opel Kadet station wagon at the time. Loading all of the paper into the wagon was a job, but I managed it. Then came the task of driving home. There was barely enough room for me to get into the drivers seat. I can even now see the sight as viewed by the other drivers. How they must have laughed! I would have too, but driving and barely seeing out was all I could do at the time. Even that paid off during the next few years. Yes, we even moved some when we relocated in 1984.

The principle is sound, so it is likely wise to prudently lay up non-perishables for the future if inflation is on the horizon.

The often asked question is whether we should expect a recession or inflation. I believe the Federal Reserve and the USG are totally against recessions. Even if our economy slows further, as seems likely, the money spigots will again be opened full blast early on. The extra supply of unbacked currency (which is in traditional economic terms inflation) will result in price inflation. I believe that in the mean time we will continue with John Mauldin's "Stagflation". We will continue to muddle through.

Continue to rest in the Lord. He is in control of all and works everything according to His plan. Remember not a Sparrow falls or a hair from your head without His will and knowledge. He really pays constant attention to every detail. Study His word, the Bible, and prepare your self for all of life.

Best to each, Doug