Gold Seems to Be Topping Here

The intervention in the gold market today (Green Trace) is not as obvious as it was during the previous two days. The heavy demand for gold has driven the price back up to 1050. We are being treated to support near 1045. Perhaps, that will be a low for a period of time here. We must wait and see how this plays out. I still look for a cyclical high about the end of December. How high will it go? Only the Lord knows and we must be patient to find out.


The gold price is showing a rounded top with the latest prices being on the down side. Both the RSI and MACD indicate a downward move. I expect that we will see a move to about 1040, but I can only visualize dimly through the clouds in my crystal ball. The Lord knows the exact low on this potential correction.

Bullion Monarch Mining is an interesting speculation. There is a non-confirmation between the downward indication of the RSI and the leveling or continuing up indication from the MACD. Currently, the last trade was at 0.95 which is at or nearly the recent high. It has held up well during this period. I am not selling at this point, and would be a buyer below about 0.85 if it ever gets back there, but would watch the movement of gold to give me confidence in any buying.
From Rude Awakening this morning: "I’ll add one other reason to like gold stocks here: They did pretty well in Great Depression I. And history may repeat. Even at their lowest prices in 1933, the stocks of Alaska Juneau Gold Mining and Homestake Mining were still well above their 1929 highs. At their highest prices, they were 230% and 300% higher, respectively.

Old Bernard Baruch was a principal stockholder in Alaska Juneau. It was his largest holding in 1931. Baruch was a savvy old trader and investor. He knew where the soup would stick to the spoon after Roosevelt’s New Deal policies. It would mean a devaluation of the dollar and a rise in the gold price.

Eventually, gold did surge, and so did gold stocks. “Baruch reaped an especially large profit,” his biographer James Grant writes, “for he had been buying stock and bullion.”

Obama’s stimulus plan smells a lot like Roosevelt’s New Deal. And if this is the greatest financial test we’ve faced since the Great Depression – as I believe it will ultimately be – then gold stocks may also be among of the few stocks to make new all-time highs in 2009."

From Bloomberg:

Gold Falls as Rally to Record Signals Sell to Some Investors

By Pham-Duy Nguyen and Nicholas Larkin

Oct. 15 (Bloomberg) -- Gold fell the most in three weeks as a rally to a record yesterday spurred some investors to sell the precious metal.

The 14-day relative strength index for futures, a momentum indicator, failed to top last week’s peak as gold jumped to an all-time high of $1,072 an ounce in New York, a sign to some investors that prices may be headed lower. Demand for bullion also slowed as the dollar steadied against a basket of six major currencies, after rebounding from a 14-month low.

“This is technical selling near the record,” said Frank McGhee, the head dealer at Integrated Brokerage Services Inc. in Chicago. “A little dollar strength brought gold down,” after a slump in the currency this week fueled demand, he said. Read it HERE.

There will always be those who will jump ship at every sputter of the boilers or shift in the wind. However, as time goes forward for precious metals in the present bull market, the holdings will be in ever stronger hands who will stay the course. It is really not a time to be trading in and totally out of precious metals and mining stocks. As, I have often said that I would put trailing stops on SOME, not ALL of my portfolio. This, to me, is rational investment. Too often in the past, I have felt locked out by much higher prices after I had sold. My plan is never to get in that position again as a bull market marching forward. Think about this for yourselves. Each correction allows us to increase our holdings in the metals and miners.

From Reuters on October 13th.:

Capmark highlights woes of commercial real estate

By Tom Hals

WILMINGTON, Del., Oct 13 (Reuters) - Capmark Financial Group Inc will likely become one of the largest commercial real estate lenders to fail, highlighting the challenges facing the deteriorating market for retail and office buildings.

A source told Reuters on Monday that Capmark would file for bankruptcy as soon as next week, with about $10 billion in assets. [ID:nSP460515]

Restructuring specialists said Capmark's troubles are a symptom of of the wider collapse in commercial real estate values and a signal of tougher times ahead for lenders and developers.

"I don't want to belittle Capmark," said Jeffrey Rogers, president of Integra Realty Resources Inc in New York, "but it's just a pimple on what's out there." Read it HERE.

Is this other real estate shoe about to hit the floor? That would be another heavy slam to our economy which is so damaged by increasing unemployment, heavy debt, depreciating dollar, and record foreclosures and bankruptcies.

A move closer to 1984 reported in Timesonline.co.uk:

Crimespotting: the new way to make money on the Internet

Britain, already one of the most snooped-upon nations on Earth, is about to become a nation of snoopers.

A network of citizen crimewatchers will be given the chance of winning up to £1,000 by monitoring CCTV security cameras over the internet.

The cameras’ owners will pay a fee to have users watch the footage. The scheme, Internet Eyes, is being promoted as a game and is expected to go “live” next month with a test run in Stratford-upon-Avon.

Subscribers will be able to register free and will be given up to four cameras to monitor. Read it HERE.

In the book 1984, cameras were every where and people had to crouch in uncomfortable positions to hide in corners where they were not in view of the cameras. During the reign of Hitler in Germany, people were encouraged to report on neighbors and family. In America, the IRS encourages people to turn in those who "do not pay their fair share." Many communities encourage citizens to report on others who "waste water." In general reporting by citizens becomes every more important to governments which operate from the top down - socialist, communistic, fascist, dictatorships, and the like. Beware of the environment which encourages citizens to report every action of fellow citizens. This is a life threatening environment. Britain is moving forward in that direction.

Here are the miners from Scottrade streaming quotes:

And the Currencies from Kitco.com:

Gold is 1050.70 and silver 17.40 with both on up ticks. The DOW is up some 119+ to 9943; BULM last was 0.97 and BYDDF last was 10.05.

Check out the new offering of a BRIC Market Safe CD at everbank.com World Markets. The cut off date is November 5th.

Do not neglect the gathering together of the saints on the Lord's Day. It is important to be constantly worshiping and praising King Jesus by your attitude toward Him. However, it is equally important for each of us to regularly attend a church which presents the whole counsel of God and practices the sacraments as ordained during Christ's earthly ministry. The Holy Spirit uses the Word of God to teach us and to help us grow in the likeness of Christ. He also dispenses grace through the proper exercise of the sacraments. Go to church this Lord's Day. It is a Christian duty which is a blessing to each one of us.

Best, Doug