Thoughts on Markets

Thursday, April 10, 2008

Precious Metals Repeating the Play of Aril 8th


Both silver and gold seem to be repeating their paths of April 8th. Look at the similarity of the over night action and the action near the end of London trading and opening of New York.

Yesterday both gold and silver had stellar days, but today is a different story. We are in very volatile times in the precious metals and commodities markets. Crude was up strongly and closed at about $111. Supplies must be low, demand high. Look out for sticker shock when you arrive at the pumps. It takes a lot of dollars to feed the gas guzzlers these days and it is likely to higher over time.

Silver is down to 17.91 and gold to 925.20. I am searching the call options on, mainly, silver miners. Gold miners are also options. I bought some DROOY on Monday, and I believe it to be a good long term play. However, DROOY was downgraded from buy to hold by a major investment bank. It is wise to use caution in this market.

The direction of the general market is yet to be revealed. There is some good news and some bad news impacting on the market. Many are concerned, but we must wait and see how it goes. It is difficult to see how the world wide flood of paper currencies could do anything, but result in price inflation in everything, including precious metals and commodities.

It is likely wise to do a little stocking up on durable consumables when they can be found at discounts and bargain prices. That is one way to stay ahead of price inflation. Remember investments which enable you to cash them in and pay the higher prices of tomorrow also cost in income tax. Durable consumables purchased a lower prices and used when price inflation is raging have no taxable consequence. Therefore, you have profited without the burden of income tax. Think about it!

We can all rest assured that all of us and everything is firmly in the hands of the one true God of all. Nothing can separate His love from His people and He cares for them above His only begotten Son: our Lord and only Savior, King Jesus.

Best to each, Doug

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