Metals Reaching for Higher Plateau

The miners are going up in response to the higher level of gold prices. The stocks in which I was trading are much higher now >> DROOY 7.03; HMY 11.58, and VGZ 1.84. The silver stocks are moving, as well >> CDE 0.85; PAAS 18.62; SLW 7.36, and SSRI 20.55. These are good moves; however, the moves have been substantial in the last 2-3 days of trading and we should expect some consolidation before higher moves.
The graph on gold, above, is dated January 13th. It should be updated to show the current price of 909.90. Gold must remain above 900 for moves to the higher level. However, the move has been comforting for the time being.
The three day gold graph shows rather consistent moves to a higher plateau of price for the premiere monetary metal. This is leading the way for the mining stocks, but beware of a correction in the near future. I am not selling any mining stocks currently. We have yet to see the gold rush, but more folks are recognizing the true value of the metals and mining stocks and are jumping on board at present. The real rush is yet to come. It can be very sudden, though. Beware of selling too early. But also be very careful in buying. I will be a buyer on any dips. I am so thankful to the Lord for pushing me to sell the Renmimbi and adding to the Everbank World Markets Metals Select Account.

Silver is coming along for the ride, as well. It is currently 12.11. Patience in the precious metals is very important, but can be very rewarding. There are some very important articles, below. Take time to at least scan them.

Latest from James Turk Goldmoney.com:

Gold Breaks Above $850

Last week was a good one for the precious metals, as gold managed to climb back above $850, which has been a barrier for months. From their closing low the week before, gold climbed 11.0% in terms of US dollars while silver did even better, jumping 14.5%. The gains were even greater in other currencies as the dollar generally strengthened during this period.

The same factors continue to drive gold higher. In today's monetary and financial turmoil, people are looking for safe havens, and gold is the safest of them all. Read the article HERE.

From Bloomberg:

Gold Advances to Highest in Three Months on Demand for Haven

By Nicholas Larkin

Jan. 26 (Bloomberg) -- Gold rose to a three-month high in London as investors increased holdings of the metal as a haven on concern the global recession will deepen.

Bullion exceeded $900 an ounce on Jan. 23 for the first time since October and gold holdings in exchange-traded funds surged to records. Economists expect a report tomorrow to show German business sentiment slumped, while U.K. home prices had the biggest annual decline since at least 2001.

“All the comments you read about the economy are negative,” Wolfgang Wrzesniok-Rossbach, head of marketing and sales at Hanau, Germany-based Heraeus Metallhandels GmbH, said by phone. “There’s definitely safe-haven buying” and “this is going to continue,” he said. Read the article HERE.

More from Bloomberg:

Bernanke Risks ‘Very Unstable’ Market as He Weighs Buying Bonds

Jan. 26 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke and his colleagues may try once again to cure the aftermath of a bubble in one kind of asset by overheating the market for another.

Fed policy makers meeting tomorrow and the day after are exploring the purchase of longer-dated Treasury securities in an effort to push up their price and bring down their yield. Behind the potential move: a desire to reduce long-term borrowing costs at a time when the Fed can’t lower short-term interest rates any further because they are effectively at zero. Read it HERE.

From Reuters:

UPDATE 1-DRDGOLD mine loses 1,095 oz output after power outage
Mon Jan 26, 2009 7:07am EST

JOHANNESBURG, Jan 26 (Reuters) - South African gold producer DRDGOLD Ltd (DRDJ.J) said on Monday it had lost about 1,095 ounces of gold at its Blyvooruitzicht mine after a power outage caused by a lightning strike trapped workers and halted output.

DRDGOLD said in a statement operations at its biggest No. 5 shaft at the mine had resumed at the start of the night shift on Jan. 22. Read the article HERE.

From Brasschecktv.com:

"It's not like before"

This is a 5 minute video worth watching. See it HERE.

From the Daily Pfennig:

"A Chinese newspaper reported that Chinese officials are calling for Beijing to sell U.S. Treasuries... Whoa! This is completely different than people outside of China giving them their 2-cents worth of opinions on how they should run their economy (read, Schumer, Graham, Bernanke, Paulson, and now Geithner a.k.a "the cheater")... Let's go to the story...

"BEIJING (Nikkei)--Calls are growing in China for the government to reduce its holdings of U.S. Treasury securities, as some observers expect their prices to decline amid heavy issuance to fund U.S. economic stimulus plans.

Such sentiment -- in part motivated by indignation over recent American assertions that China is partially responsible for the global financial crisis-- threatens to cast a cloud over relations between Beijing and the new U.S. administration.

"China should sell some of its U.S. government bonds and increase its euro and yen assets," Yu Yongding, a former member of the People's Bank of China's policy board, wrote in a Chinese newspaper earlier this month. Yu warned that the supply of Treasuries may far exceed demand in the future.

Such remarks by Yu, who currently serves as director-general of the Chinese Academy of Social Sciences' Institute of World Economics and Politics, has sparked discussion within the government on how to manage its foreign reserves, according to a source familiar with the matter."

I told the boys and girls on the desk about the story, and Ty noted that the markets weren't really picking up on it... But by noon, you could tell something was going on, as the euro traded to 1.30 (+2 figures), Gold was up $40, and the Long Bond in Treasuries was down 2 whole points!

Now, I'm not saying that "this is finally the last shoe to drop" You see, just because a Chinese official calls for Beijing to sell their Treasuries, doesn't mean Beijing does. However, look at the damage done to the dollar, and Treasuries when we have a single individual within China calling for this!

So... Judging from the currency reaction overnight... There's been no follow up to the NIKKEI story... But what a performance from Gold! WOW! The shiny metal traded over $900 for a short time on Friday... I do see the Gold futures on the internet, and they are showing Gold will be over $900 today..."

This other shoe will drop sometime. Possibly as Chuck Butler says, above, this is a recommendation which Beijing may not heed. Beijing will make up its mind at some time in the future. When is the big question?

From Mineweb today:

Gold continues to uncouple, positively

Gold stocks and gold ETFs are increasingly a natural home for investors fleeing from banking stocks.

Author: Barry Sergeant
Posted: Monday , 26 Jan 2009

JOHANNESBURG -

Dollar gold bullion prices moved to three month highs, above USD 900 an ounce, in the past few days, and to all-time records in currencies such as the euro and Swiss franc, underpinning the ranking of listed gold stocks as the world's best performing equities subsector. At the same time, listed bank stocks, seen on a global basis, rank as the worst-performing subsector, with, however, material discrepancies between country bank performances. Read the article HERE.

The Bible tells us that we must be wise as serpents and harmless as doves. Since we are created in the very image of God, we have brains. Like any other talent or asset which God has entrusted to each of us, we must diligently exercise it or lose it. I suggest that you spend much time in study of the word of God. The Bible is the operation manual for every aspect of life. After, our Creator is also the Author of this manual. We must engage in daily study, memorization, and meditation up this value manual to discover God's way for each of us.

It will provide much guidance for our specific calling in life. More than that, it provides with the power of the Holy Spirit the way to recognize our individual sins, shows us that our only hope is in Jesus Christ, and leads us to submit to Him completely. We are each to be asked, "What say ye of Christ?" If we do not recognize Him as the Only Begotten Son of God and our Lord, we are choosing death. There is life in no other. Therefore, chose Jesus Christ for life.

At this point in time, gold is 905.30 and silver 12.07. Both are on up ticks.

Best to each, Doug