Gold is in a Strong Breakout

The 60 Day Gold graph, above, clearly shows a upside breakout from the pennant triangle which was formed during the consolidation phase from late October through about December 24th. Gold has climbed to records against many major currencies confirming the breakout. It almost reached an all time high against the dollar before dropping slightly. Thus, it may yet make it to more new records.

The under reporting of price inflation by the Federal government paints a rosy picture on the economy. It is not rosy at all! The fact that the central banks of the world are pumping in billions and trillion of dollars and dollar equivalents into the markets emphasize their dire concern. Of course, the inflation of the supply of currencies (true inflation) via the printing presses and expansion of credit is the root cause of the world financial problems.

No nation can continue forever to borrow and not pay back debts. The Bible tells us, "The wicked borroweth, and payeth not again. . ." (Psa. 37:21) America has been and continues doing just that now. We have enjoyed a prosperity from borrowing from the world to buy their less expensive products to the extent that our governmental, business, and personal debts far exceed that ever seen in the world since the creation of Adam and Eve.

America has also enjoyed the benefit of controlling the reserve currency of the world. Coupled with the gigantic debt and the devaluation of the dollar, we are reaching a crisis point when the world will no longer support our borrowing and will change to other reserve currency or currencies. I believe this point in history is on the horizon, but we will have to await the timing under control of the Sovereign God of all.

At this time, gold is bid at $835.60 and silver at $14.80. The DJI is off some 44+ at 13321.83 and the S&P 500 is off almost 6 at 1472.71. The mining stocks are yet to catch up with the upward move of gold prices. They are mixed today with most still in a reasonable buying range.

The gold miners index (GDX) is at 46.60 with the number of sellers greatly exceeding the number of buyers. The street tracks gold ETF (GLD) is at 82.58; the Canadian gold & silver Trust (CEF) is at 10.81.

This is the last day of 2007 which has been an eventful year. It has certainly been good for the precious metals. Gold is up about 199.40 or 31.35% over the year. Silver is up 1.98 or 15.415 for the year. Yes, it has been a good year for both. Silver has lagged behind while in the past it has generally led gold to higher levels. I believe it will catch up over time. Remember, that both should be at much higher levels given the true rate of currency inflation throughout the world during the past years.

Our God has given us seasons, times, and particularly, the New Year. It is an encouraging time for renewal. We have the opportunity to review and learn from our mistakes of the past and correct them or avoid then in the New Year. He knows us better than we know ourselves and He realizes our frailty which we are want to ignore. It is very important for us to read and study His word for answers to all of present temporal life and, most certainly, eternal life. Let us all commit to a deeper and more diligent study of the God's word and to being obedient in every aspect of our lives 24/7.

Best to each for a great 2008, Doug
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