Gold Pushing $1060 - Silver $18

Here we go again folks, the precious metals are starting the week at a sprint! The dollar is trashing and the metals are retaining lost value of the dollar and other unbacked currencies. Aren't you glad to be in something of value rather than the dollar?

The gold graph, below, shows the support levels. I believe we will find some resistance at 1060. This graph as of Friday's close was looking a bit toppy. However, with the overnight movement and the early start this morning, we should see more upside or a very shallow brief stumble.

Silver has some catching up to do, but I believe silver has the potential for a big jump in the not to distant future.

And I thought the markets would be closed today. Surprise! Guess I should have checked earlier. Don alerted me to the following this morning on the banks moving to other than the dollar from Bloomberg.com:

Dollar Reaches Breaking Point as Banks Shift Reserves

Oct. 12 (Bloomberg) -- Central banks flush with record reserves are increasingly snubbing dollars in favor of euros and yen, further pressuring the greenback after its biggest two- quarter rout in almost two decades.

Policy makers boosted foreign currency holdings by $413 billion last quarter, the most since at least 2003, to $7.3 trillion, according to data compiled by Bloomberg. Nations reporting currency breakdowns put 63 percent of the new cash into euros and yen in April, May and June, the latest Barclays Capital data show. That’s the highest percentage in any quarter with more than an $80 billion increase. Read it HERE.

Folks, such actions as this can give us overnight inflation as the dollar loses even more value rapidly. Rumors abound that the run is not only to other currencies, but to the dollar, as well. Thus, there is increasing demand for the precious metals. This can push the value of gold in dollar terms out of sight. As this trend grows, we would want to be out of the dollar as much as possible. What a stagflation that would mean. No jobs and rapidly rising prices. If you are dependent upon income from your current job, hang onto it if at all possible. It is no time to be jumping to another more tenuous position.

From The Daily Pfennig this morning: "Long term? Well, currencies for the most part make long sweeping moves, not one-way streets mind you, but long sweeping moves... And this long sweeping move by the dollar downward, is being aided by the U.S. Gov't! That's right, the U.S. Gov't, has shown a willingness to allow the dollar to weaken... Oh, yes, they carry on about a "strong dollar policy" and all that, but they don't back it up one iota... And, when we get down and dirty regarding U.S. dollar policy, it is my opinion, that the Gov't sees no way out... That they only chance they have to pay back debts, is with a cheaper dollar... That's it in a nutshell... The Gov't wants, and needs a cheaper dollar...

However, they don't want it overnight! They don't need it overnight! The debts aren't due right now... So, that's why you see them spit out stupid statements about a strong dollar policy, they all know that that's not what they really want, but they can't be seen as no willing to defend the dollar..."

"THE U.S. WANTS CHINA TO ALLOW THEIR CURRENCY TO GAIN VS THE DOLLAR!

When lawmakers, Central Bankers, U.S. Treasury Secretaries all go the China year after year, and beg, and plead, and whine, to the Chinese authorities that the renminbi needs to get stronger VS the dollar, what's a currency investors supposed to think? That's right, that the U.S. wants a weaker dollar, period."

Chuck is right on here. Strong dollar rhetoric is just that rhetoric and time is running out on any thought of repayment of our debt.

I believe the central banks moving out of dollar to other currencies and gold is the top news of the time. The officials of our government can no longer depend upon their carefully selected rhetoric toward strength of the dollar to be believed. They are nestled precariously on the horns of a dilemma, trash the dollar in an attempt to spur our exports and make imports more expensive, or strengthen the dollar and crash the economy. The world is watching and the bail out of the dollar is on the way. Remember, I believe the cyclical high for gold on this cycle will be around the end of this year. I also, believe we have seen the low early this month in the vicinity of $1,000. Expect sandy spots along the way, but we are in a low term bull market for precious metals or perhaps I should say a long term loss of value of unbacked paper currencies.

Here are our miners from Scottrade streaming quotes:

Here are the values of most currencies in relation to the value of the dollar from Kitco.com. Remember these are all relative values and all are unbacked currencies.

I trust that each of you joined with others in worship of the living God upon whom we are all dependent. He is sovereign and is working all things for His glory and for the eventual good of His people. We are His sheep and it He who has made us and not we ourselves. Praise Him daily.

Gold is 1056.40 and silver 17.82 with both on up ticks. The DOW is 9925.63 up 61+.

Best to each, Doug