Gold Starting the New Year Right -- Up, Up!

Gold has moved to $847+, but is a bit down from there at $846.40. The bull market for gold continues to gain a bit of steam early today as it moves upward $13.10 on the day. This is a strong move toward the $850 level. It will be interesting to see how the cartel reacts to this move.

Apparently, they moved earlier this week, but the action was weak and ineffective. From the 24 Hour Gold graph, above, the volatility is apparent. The upward move has had a few sandy spots to overcome. However, the trend is solidly upward. Remember that trends continue as long as the fundamentals causing the trend remain intact.

Gold moves as paper currencies lose value and as people see or perceive world problems. Gold is now up against all paper currencies, as one can see in the Kitco.com exchange rates chart, below:

Exchange Rates
(Exchange rates displayed are the middle point between bid and ask)	[details]

Currency	Chg% X=1$USD	NY Time	X= 1$USD	X$USD =1	Gold Price/oz	Gold Chg	Gold Chg%
US Dollar	--	01/02-10:35	--	--	846.90	+13.60		+1.63%
Australian Dollar	+0.43%	01/02-10:30	1.1344	0.8816	960.79	+11.42		+1.20%
Brazilian Real	+0.90%	01/02-10:35	1.7590	0.5685	1489.87	+10.77		+0.73%
British Pound	-0.30%	01/02-10:34	0.5046	1.9820	427.35	+8.16		+1.95%
Canadian Dollar	+0.20%	01/02-10:30	0.9918	1.0083	840.01	+11.92		+1.44%
Chinese Yuan	+0.14%	01/02-05:20	7.2892	0.1372	6173.95	+91.20		+1.50%
Euro	+0.60%	01/02-10:30	0.6805	1.4696	576.27	+5.84		+1.02%
Indian Rupee	+0.06%	01/02-10:27	39.3900	0.0254	33359.39	+514.87		+1.57%
Japanese Yen	+0.97%	01/02-10:35	110.4200	0.0091	93514.70	+597.58		+0.64%
Mexican Pesos	+0.14%	01/02-10:35	10.8970	0.0918	9228.67	+135.07		+1.49%
Russian Ruble	+0.34%	01/02-10:30	24.4805	0.0408	20734.98	+264.80		+1.29%
S.African Rand	+0.25%	01/02-10:35	6.8082	0.1469	5765.82	+78.55		+1.38%
Swiss Franc	+0.99%	01/02-10:35	1.1219	0.8914	950.09	+5.92		+0.63%

Thus, we see that all paper "money" is losing value in relation to gold. Gold is real money and has been for centuries. It continues to be the preferred store of value to protect wealth. As we know the metals should be accumulated over time for this purpose. The mining stocks, on the other hand, provide leverage and can be used as investments for sale as the big third phase of the gold bull market appears.

For a glimpse into the future third phase of the gold bull market, I am considering the best use of funds realized from the sale of mining stocks at greatly inflated prices. The profits from the third phase could be used (1) to eliminate any remaining debt, (2) to buy up bargain assets and businesses, and (3) sound asset backed bonds which should be profitable as the price of the, then, gold bubble bursts. My son reminded me that bonds went into a good long term bull market in 1980 when the last bull market in gold burst. This requires a good bit more study. If you have thoughts on this subject, please, share them with me.

Gold is now at $848.90 and silver at $15.10. Both are climbing.

As always, we must examine the economic situation and prayerfully make plans. The plans must be committed to the Lord . Then we move out in accordance with the plans and give Him the glory for the results. After all, He is sovereign in all aspects of life.

Best to each, Doug