A GI Who Cares - Providence of God - Precious Metals UPWARD
I was reminded, once again, of the providence of God in watching over his people. My dear friends the Seargeant's four older children were on their way to work today, when the Lord used Ashley, the driver, to narrowly avoid a head on crash with a truck in her lane. She was not at fault in any way. Their van was damaged, but the young people, though shaken, received no serious injuries. We should always be amazed at how God protects His people. We do serve an amazing God before Whom we stand in awe. These events give us a great appreciation for the amazing providence of our God. This is another example of His grace and once again should remind us to praise Him daily. It reminds us of His love and care for His people and helps others to come to know Him. "Praise ye the Lord."
This is the story for last week and today. We see in GLD, our proxy for gold, that the price has broken above the upper side of the trading trough. This is very technically positive for gold, and it is also similar for silver. The fundamentals for gold and silver remain the same >> upward and onward. The upward trough lasted for the entire month of May and was only challenged on two days about the 8th and 11th when the price hit resistance at the lower side of the trough.
Very closely following the metal, we see a similar pattern in the movement of the Gold Bugs Index. They are running into a slight sandy spot today, but are still at the high side of the trading trough. Here are some of the prices: DROOY 10.13; HL 3.82; HMY 12.06; SLW 10.77, and VGZ 2.68. I am not trading in the mining stocks at present. Neither am I using trailing stops. I do not want to get in a position of feeling locked out as prices rise. I will be adding to my portfolio when/if prices drop.
Gold ran into some capping today, but seems to be rising again as the buying side is remains strong. 
Silver is in a similar pattern of recovery after some capping. Silver is 15.71 down 0.13 and gold is 981.60 up 2.00. Gold is on an up tick and silver on a down tick.
From the Daily Pfennig this morning: "It more importantly is simply the fact that the thing that drove up the dollar's value beginning last July until March of this year, is simply Treasury buying... And now those Treasury purchases are showing HUGE losses for those holders that "thought" they were "safe"! And... As I kept telling you, once holders grew weary of paltry yields, or the losses, the reversal of those Treasury purchases would be as swift as the move to Treasuries last summer...So... The move in the Big Dog, euro, overnight in Asia and now in the European session has produced yet another move through a line of resistance at 1.42... And we all know that when the Big Dog leaves the porch, all the other smaller dogs get to stretch their legs too... And so it is that Swiss francs are 94-cents, Aussie 81-cents, and so on...
And, as Hannibal Smith used to say... I Love It When A Plan Comes Together! Not that I'm cheering on the losses in Treasuries... I'm patting myself on the back for telling you over and over again that it would happen!"
Currently, the Euro is the offset currency for the dollar. I believe it very likely that the Euro will be the largest reserve currency replacing many dollars across Europe. That gives it a big advantage as the dollar continues its downward moves. The dollar should be going down for a long time since the Fed and the U.S. Government are involved in rapid expansion of the supply to support binge spending, bail outs, and buying of Treasury Issuances. There is no let up of all three on the horizon and this is very positive for the Euro. Of course, I sold my Euros several months back during the last big upward move of the Euro.
From MineWeb.com:
Gold at the $1,000 door
Gold investors know all too well the psychological importance of $1,000 gold and at $980 it's awfully close again. According to John Kaiser, editor of the Kaiser Bottom-Fishing Report, "we're getting very close." Interview with The Gold Report.
Author: The Gold ReportPosted: Monday , 01 Jun 2009
VANCOUVER, BC -
The Gold Report: John, you have said that you believe gold may go up to $1,300 to $1,400, but probably not higher. Can you give our readers an overview of how you achieved those targets?
John Kaiser: I think we're ready for a real increase in the price of gold, which is why I am looking at more modest targets, such as $1,300 to $1,400, happening fairly quickly, probably bouncing plus or minus $200 or $300, around that level, but it's a real price increase without a corresponding catastrophic collapse in the U.S. dollar or hyperinflation descending upon us. Read it HERE.
$1000 Gold is a psychologically important mile stone for gold. This must be exceeded and held for gold to reach its true value in terms of the paper currencies of the world. That would bring the lemmings in at the last moment as the "gold rush" gathers steam.
From MineWeb.com:
MINING FINANCE / INVESTMENT
Gold, and gold stocks, fever
By popular demand, a glance at the world's hottest 100 gold stocks, now worth an aggregate $283bn, and merrily leading the recovery in global stock markets.
Author: Barry SergeantPosted: Friday , 29 May 2009
JOHANNESBURG -
More than ten of the world's 100 "hottest" listed gold stocks traded within 1% of, or at, 12-month high prices on Friday, supported by a falling dollar that assisted the boost of commodity prices across the board. The theme was further lifted by gradually more positive sentiment in markets generally.
The 100 gold stocks mentioned were trading 14% below high stock prices, on average, measured on a weighted basis. This can be compared, in the broadest sense, to the benchmark all shares MSCI world equities dollar index, which was trading nearly 40% below its highs on Friday. There was also something of a sense of fever out there, with gold bullion apparently targeting a break through the $1 000 an ounce barrier. Read it HERE.
The mining stocks are very hot these days and have been throughout the month of May.
From MineWeb.com:
The crucial dollar question
While the greenback may be oversold, with short-term retracement a possibility, the Bank Credit Analyst believes that the world's biggest currency's cyclical decline has further to run.
Author: Barry SergeantPosted: Friday , 29 May 2009
JOHANNESBURG -
The Bank Credit Analyst this week echoed demonstrable market sentiment, and action, in calling down the dollar. "While the US dollar is becoming oversold and a short-term retracement is possible," stated analysts at BCA Research, "we believe that the cyclical decline has further to run."
The dollar's performance cannot, as such, be measured against the dollar itself, but the dollar index - using dollar performance against the euro, yen, British pound, Canadian dollar and Swedish krona - has until recent months been in something of a bull market, from around the start of the second quarter of 2008.
The dollar index reached a cyclical high early in 2002, after a multi-year bull market, and swaggered through years of a bear market, assisting the boost for commodities, during the so-called commodity supercycle. The dollar index rallied substantially from its April 22 2008 low of 71.33 points to as high as 89.62 points, and has since fallen sharply, with current values seen at around 80 points. Read it HERE.
The Bank Credit Analysts are most often right on target. When they speak, we should listen. Perhaps, the dollar is in for a bear market rally in the near future. This is a possibility which could provide a temporary buying opportunity in the metals and mining stocks. There will be fewer and fewer such opportunities as the bull market in gold continues.
From MondayMorning.com:
Bankrutpcy Will Let General Motors Move Forward
By William Patalon III
Executive Editor
Money Morning/The Money Map Report
By the time investors read this today (Monday), embattled U.S. automaker General Motors Corp. (NYSE: GM) Motors Corp. could be operating under the protection of the U.S. bankruptcy code, a strategic move made in an effort to transform the once-dominant firm into a leaner and more competitive player.
GM has lost an aggregate $82 billion in the past four years even as it slashed production capacity, nameplate brands – and more than 100,000 U.S. jobs. It needs to cut another 19,000 workers by 2012 to bring its domestic employment down to 72,500 jobs.
GM on Saturday passed a major milestone ahead of a bankruptcy filing planned for today (Monday) as the deadline passed for bondholders to accept an exchange offer brokered by the Obama administration. Read it HERE.
A leaner, more stable GM. I hope the management changes policies that led to the losses and bankruptcy. The U.S. is moving down the ladder in automobile manufacturing, because of management's inability to change and satisfy the consumers. The foreign companies had a better view of the consumer desires and they had a better playing field with fewer government regulations, less taxation, and less demands from labor unions. The American manufacturers, even if management were better, would have less advantage in the lack of a freer market.
Make your day great with the Lord in control. Best to each, Doug
posted by Doug @ 7:52 AM
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