Gold 1055 Over Night

Here is GOLD on an upward sprint which continues as of today. The boyz have been active, but not too successful as of now. This is a very strongly bullish graph with all indications that gold will move higher. Aren't you glad you are heavily into gold and mining stocks? Even the mutual funds in the precious metals are sprinting upward, as well. Everything about this graph is positive. Gold seems destined to be moving forward. Is this anticipated gold rush? Could be!

Each time the price moves upward, the hammers swing but not nearly as effectively as in the past. Gold is now back up to 1054.
Silver is following gold and is now 17.74.

From MineWeb.com:

Gold will continue to set new highs - Blanchard

Analysts at gold dealer Blanchard & Co. see the recent upwards trend in the gold price as sustainable and likely to continue.

Author: Lawrence Williams
Posted: Wednesday , 07 Oct 2009

LONDON -

U.S.'s largest gold dealers, Blanchard & Co. In New Orleans reckon that the current upwards trend is not only sustainable, but also that it should continue long term.

Blanchard's chairman and CEO, Donald W. Doyle, comments that "The current rise in the price of gold and its projected sustainability can be attributed to the decline of the U.S. dollar and mounting pressure from the continuing rumble for it to cease being the currency of choice for oil trading. Whether or not that will happen remains to be seen. However, it does show how fragile the dollar is right now."

The jump up in the price was possibly precipitated by a report in the UK's Independent newspaper - since denied by some of the countries quoted - that the Gulf States, along with China, Russia, Japan and France are seeking an end to the oil trade being undertaken exclusively in U.S. dollars with the dollar being replaced with a basket of currencies including the Japanese yen, the Chinese yuan, the Euro and gold. Although as noted above this has been denied officially, there is probably little doubt that such an option has, at the very least, been the subject of some discussion. Read it HERE.

This could be the Gold Rush, but it seems to me a bit early for it. The Lord knows for certain, I can only make some educated (hopefully) speculations.

From MineWeb.com:

Record gold price makes Jim Rogers wary

The renowned gold bull said he does see further gains in the long term but doesn't like to buy things at record prices

Posted: Thursday , 08 Oct 2009

SINGAPORE (Reuters) -

Renowned investor Jim Rogers, one of the biggest bulls on this decade's commodities rally, is not so bullish on gold a day after the precious metal set a record high, although he does see further gains in the long term.

"Gold has hit a new high and I don't like to buy something at record prices unless there are extremely strong fundamental reasons. I am not jumping on board," said Rogers, whose bearish views on the dollar and bullish views on commodities and China have been widely broadcast for years.

"I can't say what will happen to gold tomorrow or next month. But if you ask me whether gold will go up in the long term, maybe in the next decade, I would say yes," he told Reuters by telephone in Singapore, where he now lives as an independent investor.

Spot gold prices surged to a record above $1,040 an ounce on Tuesday, topping the previous March 2008 peak as investors moved to preserve the value of their dollar-denominated assets against the weakening currency and the risk of inflation. Read it HERE.

When Jim Rogers speaks, I listen carefully. Though I do not always agree, I respect and appreciate his perspective and comment. They should be weighed carefully. I, too, am concerned about jumping into more mining stocks, but have decided to purchase options on Harmony and Hecla. Through the options there is leverage and one can keep the risk low, but still participate in increasing prices for the miners. I am a cautious buyer of a few November options for HMY (HMYKG Nov 11 call) and HL (HLKQ Nov 4 Call).

From MineWeb.com:

Will gold become the new reserve currency?

As the dollar's dominance fades gold's neutrality puts it in a good position to benefit

Author: Chikako Mogi (Reuters)
Posted: Thursday , 08 Oct 2009

TOKYO (Reuters) -

As the dollar's dominance fades with the emergence of a multipolar world, gold may stand to gain the most of all assets, thanks to an unlikely quality -- neutrality.

While no major currency is likely to replace the dollar any time soon, the need for an alternative is clear, and growing. China among others is considering how to diversify its more than $2 trillion in foreign exchange reserves, and talk of using other currencies to trade oil or commodities continues to circulate.

Supply constraints mean there is no chance of a full revival of the gold standard era, when currencies were pegged directly to gold, but investors say gold's duel role as both currency and asset make it an almost irresistible buy for years to come as financial geopolitics add risk into global markets.

"That gold has a currency aspect without being tied to any country is key to enhancing its value as an asset," said Koichiro Kamei, managing director at financial research firm Market Strategy Institute. "The realization that gold can be turned into anything spread quickly and widely as people used it to raise dollars last year when they were short of dollars." Read it HERE.

This may be a pipe dream, but is a possibility for the future. This would seem to be in the more distant future with several other substitutes for the dollar along the way. I often wonder if China plans to back their currency with gold and then propose it as the reserve currency for the world. That might work if the Renminbi were backed with gold. Even if it were not the reserve currency, it would be a preferred currency.

From MineWeb.com:

Taking a shine to copper

Consumption, speculation and growing demand by emerging economies add up to a rather rosy outlook for copper, says Steve Parsons, Senior Research Analyst for Wellington West Capital Markets. Interview with The Gold Report

Author: The Gold Report
Posted: Wednesday , 07 Oct 2009

VANCOUVER -

The Gold Report: Steve, it's often said that copper is a great way to play a period of economic growth. Do you agree with that?

Steve Parsons: I absolutely agree. Copper is an essential metal for developing nations. Generally speaking, an increase in GDP/person coincides with an increase in copper usage. The story here is that China and India are still coming from a low base. If you look at where copper usage is in developed nations, it is upwards of 9 kilograms of consumption per person annually. China's consumption currently weighs in at approximately 3.5 kilograms per person. So China is still at an early stage of development. The move to urbanization should keep upward pressure on copper usage. By 2025, it is projected that China will have 221 cities with a population of more than one million. At present, Europe only has 35. Read it HERE.

I have played Dr. Copper through options on PCU several times for profit in recent years. It may be time to look at copper again. China has procured a lot of copper and is consuming a great deal as they rebuild and expand their infrastructure.

From Bloomberg.com:

Central Banks’ Dollar Diversification Quickens, Barclays Says
By Ye Xie

Oct. 6 (Bloomberg) -- Central banks are diversifying away from the dollar “more aggressively,” according to Barclays Plc, the world’s third-largest currency trader.

The dollar accounted for 37 percent of the $115 billion foreign reserves central banks amassed in the second quarter, after adjustment for exchange-rate changes during the period, compared with 52 percent in the euro, according to a Barclays analysis of data that the International Monetary Fund released on Sept. 30. That was the first time that the dollar’s share fell below 40 percent in the new accumulated foreign reserves of $100 billion or more since the euro’s 1999 debut. Read it HERE.

Folks, these folks are on the inside of all the good, bad, and ugly. Don't you think they know the sad plight of the dollar? It is time to face up to the fact that the Federal Government and Federal Reserve are on a path, of no return, to devalue the dollar as the only way that there is even the remotest hope for repayment of our astronomical debt. I do not believe it will ever be paid!

From Casey Ed Steer's Gold and Silver Daily:

"Well, I've finally got some volume and open interest numbers that are worth the paper their printed on. Volume in gold trading on Tuesday was staggering 233,572 contracts, with open interest rising a stupendous 32,955 contracts to 484,307 in total... probably the biggest one-day jump in gold o.i. in the last ten years! In silver, open interest rose 4,884 contracts on volume of 48,440 contracts, which is a lot. Total o.i. in silver is an extremely large 131,801 contracts! As I said yesterday... Tuesday's big day for both gold and silver did not go unopposed. That has now proven to be the understatement of the year!"

The boyz were active and each rally was followed by a down move as the boyz chimed in. They are not being able to control the price as effectively as before, but are working at it.

A view worth your 5 minutes of time. A perspective on the risk of the dollar and movement away from dollar from Russia. View it HERE.

This commentary from abroad is great and you should here it.

The times are becoming more exciting day by day. We may be looking back soon on the great buying opportunity in precious metals and mining stocks when gold was a mere $1,000 and silver only $17.

I am content to let our Sovereign God run the markets, as He does everyone and everything else. He determines the future; therefore, knows full well what He will do. After all, isn't that what sovereign means? Rest secure in His grace and providence for His people. King Jesus rules all and deserves our praise, thanksgiving, and obedience. Study His word to learn what He requires. "He has shown you, O man, what is good; and what does the Lord require of you but to do justly, to love mercy, and to walk humbly with your God?" Micah 6:8. To walk with God is to obey Him.

Here are the miners:

Gold is 1054.60, silver 17.76 with both on up ticks. The DOW is up 95+ to 9821.1.

Best to each, Doug