Gold & Crude Hit New All Time Highs

Well, folks, gold finally broke to a new high above $865. It has backed off some, but still is playing with $860. Do you think the cartel is trying to keep the price below $860 or is this simply market action? I don't know, but it seems somewhat strange that in view of the depreciation of the dollar, the true price of gold in a free market (none truly exist) should be approaching a minimum of $2000 in my opinion.

After the significant rise yesterday, I would have expected higher prices today. Perhaps, the prices below $860 are another consolidation phase for another run at even greater highs this year. If so, we are in or very near another buying opportunity. If you purchase at this level, move in slowly and carefully.

Physical gold is a pure play, while buying the mining stocks is an indirect play on the producers of gold. Of course, in the third phase when gold streaks upward in a parabolic run, the miners will outperform the metal by great margin.

Crude hit an all time high of $100, but backed down of bit to close at $96 and change. We will have to watch the price at the pumps. It is almost certain to react. What about the summer vacation driving? We should thank the Lord that there are a few months until we face that. The price then will depend upon the demand during the winter for heating oil. Supplies of crude are beginning to be lower. Perhaps, we have or are no passing the peak oil supply that has been touted so loudly of late.

A commentary on why silver? http://www.investmentrarities.com/weeklycommentary.html
I continue to believe that silver will catch up with and possibly outperform gold in the longer run. Contrary to my thoughts, Richard Russell sticks with gold because it is true money and silver has become more or less a commodity metal. Certainly, silver is playing less of a monetary role than it once did.

The general market in the form of the DJI and the Transportations is giving some mixed signals. In November, both hit lows as follow: 12743.44 for the Industrials and 4366.78 for the Transports. We should keep these lows in mind as we examine the market. Neither has returned to these lows. In fact, most days they have remained well above the lows. It causes one to wonder if the lows were really a true bear market signal. We shall have to wait and see what the market intends to do. Historically, the market for the year is often defined by what it does in the first month and quarter of the year. Yesterday's drop was a significant one, but failed to violate the November lows of either index.

The people of God can rest in the assurance that our Sovereign Ruler of All is in total charge of the world, oops!, the Universe. He meets all our needs. What a wonderful relief to do the best we can from what we learn in His Word and leave the results to Him.

Best to each, Doug