December, Almost!

The fall rally in precious metals has finally begun with gold returning to bid/ask $647.40 - $648.40 and silver at $13.91. The rally is very strong and has reaffirmed the bull market. Silver is stronger than gold, because of consumption, continuing demand, and slowing supply. While it is not considered a monetary metal, as is gold, supplies are not meeting demand and stocks are dwindling.

I hold Silver Standard (SSRI) and have been trading some with options on Pan American Silver (PAAS). You might want to look into silver on any correction.

DRD Gold (DROOY) has been under some pressure even with the higher price of gold. It has been trading below 1.20 from time to time during the gold rally. This is not good, but the distractions should pass and DROOY once again move to higher ground.

The dollar has really taken a beating in the last several days with the EURO about 1.32. The EURO is up very strongly for the year, as are many currencies against the dollar. Personally, I continue to use EverBank.com World Market Accounts for securities. It is a simple way to get some funds out of the sinking dollar.

The end of the year is approaching and it is wise to gather all income tax data and make decisions on contributions, possible selling of under performing stocks & bonds, and expending funds for other income tax advantages. Be wise and move swiftly to care for these matters before December 31, 2006. Also, make plans for your IRAs: either Roth or Standard.

It will be December tomorrow. Please, try to sift through the decorations to concentrate upon the Lord Jesus Christ who came to earth to provide us reconciliation with the Father, an abundant life on earth, and eternal life in paradise with Him. He is the reason for the season whether we recognize Him or not.

Best to each, Doug

Hooraaaaaaaaaaaaaaaaaaaay it's Friday!

It may even be a significant Friday, because it is the beginning of the weekend before Thanksgiving. Trading is likely to be light until after the vacation time. However, it is Friday and the Lord's Day is only 24+ hours away. It is important for each of us to join in corporate worship of the Triune God of all. We must each give Him the glory due Him.

Gold has dropped a bit below $620 (mainly between $620 and $617 for almost 24 hours) and DROOY is again available at <$1.20. Now at $1.15. That is a good buying range in my view. The other mining stocks are providing further opportunity to add to or to begin investments in these areas. I believe this to be an apparition due to the approaching holiday. Of course, I could be wrong and this is just another correction. However, holidays generally have this effect with traders leaving their computers and desks a bit early.

I am still rejoicing that the election is over. Pre-election ads should push one into TIVO or some other program recording device. These permit later viewing and being able to fast forward through the sound bites the candidates use to maintain or achieve their power. They generally speak with forked tongues which promise each and everyone just what is desired to be heard. Once elected most simply relish the power and focus all attention on seeking reelection. Modern technology enables one to avoid the propaganda of the pre-election, and I am pleased to enjoy it to the fullest.

By the way, recent data from the USG seems to indicate a slowing of the inflationary pressures in the pipeline on the way to us. The lower gas prices at our pumps are giving rise to this. Even the slowing of retail sales of late is encouraging such thoughts. But we have a longer time for shopping between Thanksgiving and Christmas this year which should provide rather strong retail sales. For the consumers, the heating of the competition between WalMart and Target will likely provide some bargains. They seem to be getting up steam for a head to head battle. All you folks can do as the Flintstones did, run out the door crying, "Charge it!" Beware! Watch the danger of overcharging your ability to pay.

Best to each, Doug

Gold & Silver

Gold briefly broke below $620 to a low of $615.30 yesterday, but hit a high of $627.80. Thus, $620 remains as a short term resistance level. It is now at $624 and seems to be taking a breather before move in any direction. It could well be headed upward again, since the dollar continues to be under pressure.

Silver's low was $12.48 yesterday and high was $13.11. On the 1-year graph, silver peaked about the same time as gold did, but did not have as drastic a correction as gold. It also broke the trend of lower highs about the same time and remains positive. Both gold and silver have had a time of consolidation for the last few days. Time will tell if the breakout from here will be upward.

The dollar is still threatened by the reapportionment of central bank reserves out of the dollar. I expect the movement to be slow and very cautious with each bank attempting to discover what every other bank is doing. At some point in time, one of the banks is likely to make a large shift away from the dollar. Every bank is anticipating this and will be using all of their intelligence resources to detect any such action. No bank wants to be left holding the bag of worthless dollars if one major player dumps dollars.

A gradual shift from dollars favors us, too. A dramatic shift by one or more banks, would send the dollar to the trash heap. As long as the dollar remains the reserve currency for the world and is used internationally for most trade, it will have some purchasing power, although diminished.

There remains from the Greenspan era a vast amount of liquidity in the market place. That is the reason for the succession of highs in the DJI average. I believe the market to be topping out and in for a substantial correction before long. The prices of stocks in the general market have escalated beyond reason, except for the liquidity. Dividends on general stocks are very low, too. The liquidity has to go somewhere, and since the real estate bubble is deflating, the general stock market is the choice. But this is a dangerous overbought market which may temporarily go much higher before dropping, but it will drop. Timing is everything! However, it is best to be one of the first in the life boat rather than the last when there is no room left. Thus, to preserve wealth, the precious metals and mining stocks are a realistic life boat.

What lies ahead in the Mid-East Wars will be interesting to observe as it plays out. There is much discussion on beginning to withdraw some troops here at home. Those on the ground continue to argue that there are not enough troops there to continue the rather un-defined mission. Reminds me of the story about the tar baby. We are nestled rather uncomfortably on the horns of a dilemma. To withdraw will be to "lose face." And to stay will cost more in dollars than we can afford, and more importantly, will cost many more lives ours and theirs. I believe the saving of lives is more important.

I am very pleased that I do not have to make the decisions. Also, I am very thankful that the Triune God of all is in full control and working all of what we see as problems out in full concert with His Sovereign Will. Also, we rest in the fact that ALL THINGS are being worked out by Him for the eventual good of HIS PEOPLE - the New Jerusalem = His Church.

Best to each, Doug

Gold Pays Dividends!

Wow! Gold really does pay dividends. Well, almost. On November 13, 2006, the Central Fund of Canada (CEF) paid a small dividend which makes this investment even better. Of course, you will recall that the fund invests in gold bullion.

Gold is still bouncing around. It is trading between about 620 and 631. For early appearances, it is attempting to establish a resistance level at about 620. It has bounced off of that or just below it several times and is now at 621.40. The mining stocks have taken some hits today with DROOY trading less than 1.20 at times, and now at 1.19. I may have to add to my holdings.

Dollar has picked up a bit of steam, but is still very fragile.

Best to each, Doug

China Speaks Out of Both Sides of the Mouth

One of the high Chinese financial officials spoke out about diversifying reserves again. Then he "clarified" the statement by saying that they were not leaving dollars. Asked about reducing gold reserve, his answer was to the effect, "Why should we sell gold?" My sentiments, exactly! The dollar bulls thought that the dollar would be stronger with his clarification. They seem to be grasping at straws of hope from any source.

I would suggest that the central banks of the world, including China, do not want a sudden and drastic drop in the value of the dollar. After all, a good percentage (though smaller now) of their reserves are in dollars and would lose value were such to happen. Thus, all are hoping for a gradual decline in the value of the dollar allowing each to ease out over time.

A sudden, drastic drop in the value of the dollar would be disaster for us as well. We must pray that the Lord will allow a gradual fall over time. That would allow us more time to find alternatives and acquire them without a panic rush.

Gold has backed off a bit from recent highs. For the last 24 the high was $632.40 on the 12th and the low, also on the 12th was $520.40. It is now $625.90. Kitco.com's 1-Year Chart still clearly shows that the recent break out is upward.

The mining stocks have backed off a bit. By the way silver remains quite strong. Both PAAS at 22.75 and SSRI at 25.04 are staying firm. Silver is constantly being consumed, while virtually all of the gold ever mined is still on hand. Gold has it all over silver in the monetary area, but silver's demand currently exceeds the newly mined supply.

The Fall weather here is very nice. The cool nights are great for sleeping and the recent rains have turned most yards green again. We have to mow again, but had most of the summer off from that exercise.

The Lord continues to bless in His time. We are often too impatient to just commit it to the Lord and wait for Him to deliver as He always does in His way and His time. Maybe He is teaching us patience.

Best to each, Doug

Thank the Lord, the election is over!

What an election we had. The people elected the big spending party to the house. Wait a minute; for the last few years, the Republicans have been the biggest spenders ever to come to the United States government. So, what lies ahead?

There will be more spending, greater debt, and larger trade deficits just as we have seen in recent years. There will be little change in America's present course. Perhaps, there will be greater pushing toward "protective" tariffs and import quotas. That would be a disaster.

No tax cuts are on the horizon, but how often have tax cuts been just additional taxes? I would hope to see a discontinuation of the alternative tax, but doubt it will be ended soon.

Gold is having difficulty in deciding whether to go up or down. For twenty-four hours, the low today was $618.50 and the high yesterday was $628.80. It is now down to $622.70 from yesterday's close of $625.70. The trend seems to be up at present.

The mining stocks are mixed, but seem to be turning positive. BGO 5.12; CBJ 3.77; CDY 1.65; CEF 8.78; DROOY 1.20; EGO 4.77; GSS 2.91; HMY 15.57; IAG (another merger planned) 9.01; KRY 2.86; MRB 3.56; NEM 45.31; NTO 4.31; PAAS 22.19; QEE 0.27; RNO 2.90; SSRI 24.63.

Yesterday, I purchased DROOY as low as 1.17 and BGO as low as 5.14. Both are still in what I consider buying range. The dollar is headed lower long term and gold and mining stocks will be good insurance in this financial environment.

The Lord has moved into power those He has selected. We must pray that He will raise up statesmen who will put Him first and move are lows more closely to His law from the present unjust laws under which we now suffer.

Best to each, Doug

DROOY and BGO are in Buying Range

Today, I bought DROOY at 1.17 and BGO at as low as 5.14. I believe both to be good buys.

DRD Gold (DROOY) has not been as profitable as it could have been and I believe most of their temporary troubles are over. Bema (BGO) is about to merge with Kenross to make a very large mining company. BGO shares are scheduled to be replaced at .441 per share of the new combined companies.

It will surprise me if the Democrats fail to gain the House in the election. The Senate is still up for grabs in my opinion. The results will be coming in quite soon and then we will know for sure.

You might want to consider purchases of the mining shares particularly if the Democrats take the House. That would be negative for the dollar. That coupled with the current exodus of the dollar by a growing number of central banks will spell even more trouble for the ailing dollar.

Keep your eyes on Jesus Christ and dig into His word for answers to all of life's challenges and troubles.

Best to each, Doug

Dollar Slips, so Gold Benefits

Now it takes more dollars to purchase gold and other items we need. Not because the price has increased, but because the dollar has lost purchasing power. Thus, we are using gold to preserve our wealth and protect us from further depreciation of the dollar. Even central banks are seeing this and taking action to preserve their currency wealth.

Central Banks are diversifying their reserves out of dollars. UAE plans to cut dollars by about half; the Swiss bank raised its holdings of yen and decreased dollars last month, and Russia seems to be headed for an increase in yen. Is this the prelude to an escape from dollar reserve by central banks or just a few getting ahead of the mass exodus? Time will revel the answer to us.

Gold is holding much higher than in recent weeks. It has stayed mostly above $600 and is now at $613.90 down a bit from a high of $616.90. The move seems to be quite strong, and is likely a precursor of a big upward movement after the election.

Nevertheless, I suggest 10% trailing stops on a portion of your mining stock holdings. As always, I hope these stops will not be hit for a significant time in the future. However, they are good insurance against a big correction. Remember, the trailing stops follow price rises and are not executed until there is a fall back.

All results of our investment and all other plans are in the hands of the Sovereign Ruler of all. Commit all plans to Him and give Him the praise for the results.

Best to each, Doug