Precious Metals at a Higher Level in Light Trading

Both silver and gold have been trading at a higher level since the beginning of the Christmas holiday light trading days. I was stopped out on a portion of my trading stock of VGZ yesterday when the price dropped beyond the 5% Trailing Stop. I do not like to see that happen, but it is a precaution that is necessary in volatile times, particularly with the light volume. It is much nicer to see the prices continue on the way upward followed by the trailing stops. Well, the stop protected some profit for which I am thankful. Will be looking for price of VGZ to move a bit closer to 1.00 to repurchase some for trading again.

With gold now 873.60 on a down tick and silver 10.91 on an up tick, the prices are holding up fairly well. Silver seems to be due for a strong upward move in the near future.

James Turk is very optimistic on the prices of the precious metals for 2009. He could be correct, but I believe there would have to be a big expansion of the Gaza War or the dollar to lose its world reserve status. Either would be very positive for metals, but devastating to the economy as we would see hyper price inflation here similar to the 1979-1980 period. However, the precious metals would be the only safe haven in either event. Here is an introduction to his article.

From James Turk:

Gold and Silver in 2009

By: James Turk, Founder & Chairman of GoldMoney.com
-- Posted Monday, 29 December 2008
(From the December 22, 2008 edition of James Turk’s Freemarket and Gold Newsletter)

This letter is the last one for this year, so it’s time to look ahead to 2009. It’s shaping up to be an ugly year for financial institutions and the economy, but a good one I expect for the precious metals. Here are my 2009 targets:

1) Gold will climb into 4-digits in the first quarter and this time will remain in 4-digits for the rest of the year. The potential high is $1800 per ounce ($57.87 per goldgram). I expect the low to be $850, which will be reached early in the first quarter. In short, 2009 is shaping up to be the key "break-out year" for gold. It will become a "break-out year" because the average investor will start becoming aware of gold and begin buying. Despite its remarkable performance throughout this decade, few people own physical gold. That will begin to change in 2009 as the financial disruptions will worsen and people seek a safe haven for their money.

2) Will silver finally outperform gold in 2009? Having been burned two years in a row, I am asking this forecast as a question rather than offering it as a statement. The underlying fundamentals for silver continue to improve, and we saw a spark of silver’s potential early this past year when it climbed above $20. I expect silver will again break above $20 this year, and I repeat my $30 forecast from last year.

Read the article HERE.

From Yahoo News:

Home prices plunge record 18 percent in October: S&P

NEW YORK (Reuters) – Prices of U.S. single-family homes in October plunged a record 18.0 percent from a year earlier, according to the Standard & Poor's/Case-Shiller Home Price Indices released on Tuesday that indicated a U.S. housing market in the throes of a deep recession.

The composite index of 20 metropolitan areas fell 2.2 percent in October from September. The price drops, both on a year-over-year and month-over-month basis, came in worse than expectations based on a Reuters survey of economists.

S&P said its composite index of 10 metropolitan areas declined 2.1 percent in October from September for a 19.1 percent year-over-year drop, also a record.

"The bear market continues; home prices are back to their March, 2004 levels." David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, said in a statement.

(Reporting by Julie Haviv, Editing by Chizu Nomiyama)

More discouraging news on retail sales from Bloomberg:

U.S. Weekly Retail Sales Fall Most in Almost 6 Years

By Heather Burke

Dec. 30 (Bloomberg) -- U.S. retailers’ sales declined last week the most in almost six years as steeper markdowns before and after Christmas failed to salvage what may be the worst holiday shopping season in four decades.

Sales at stores open at least a year fell 1.8 percent in the seven days through Dec. 27, the International Council of Shopping Centers and Goldman Sachs Group Inc. said today in a statement. That’s the biggest year-over-year drop since February 2003. Holiday comparable-store sales may decline as much as 2 percent, according to the New York-based trade group.

Read it HERE.

More from Bloomberg on the Gaza War:

Israel Hits Hamas as Gaza Campaign Enters Fourth Day

By Gwen Ackerman and Saud Abu Ramadan

Dec. 30 (Bloomberg) -- Israel bombed navy installations and other bases of the Islamic Hamas movement in the Gaza Strip as government leaders indicated the conflict aimed at stopping rocket fire on southern Israel may broaden.

See it HERE.

More from Yahoo:

Israel rejects truce, presses on with Gaza strikes

By Nidal al-Mughrabi Nidal Al-mughrabi – 56 mins ago

GAZA (Reuters) – Israel hit the Gaza Strip with more air strikes on Tuesday and warned its military action could last weeks, while its Islamist enemy Hamas vowed to keep up rocket attacks on Israeli cities.

Both sides rejected any notion of a ceasefire soon, three days after Israeli leaders launched bombing raids with the declared aim of halting rocket salvoes from the Hamas-controlled coastal enclave.

See the whole article HERE.

The Gaza War continues. With the rejection of ceasefire, there is much more to come. We must pray for a peaceful solution to the war. Neither side seems ready to compromise.

We are nestled firmly in the hands of the living God. He is in control and I am content to have Him run things. We, men, seem to always go the wrong way. In history, we see how Israel time after time left the God of Abraham, Issac, and Jacob, were disciplined by God, then repented, and were restored. How often we think, "Shame on them." However, do not we do the same when we sin against King Jesus? We should daily thank the Holy Spirit for calling this to our attention by His mostly gentle discipline. Praise Him for leading us to repentance and restoration into the loving arms of God.

Let us continue to pray that our nation will return to the God of our fathers and restore America to be the light set on the hill as it was planed. Do not be discouraged as you see we have fallen so far away from what we once were. King Jesus is working ALL THINGS together for the eventual good of His people. Praise Him!

Best to each, Doug