Thoughts on Markets

Monday, January 25, 2010

Only The Sovereign Lord Can See Through This Fog, but We Try

Both gold and silver are showing signs of intervention though maybe not as severe as during the last week, but it seems to be there. The options on precious metals close out tomorrow if I remember correctly. Therefore it is a time to alertly observe, but very slow to buy unless there is a big drop in prices of the metals. Perhaps, all eyes are looking toward this as we see the miners generally lower this morning. My son called last Friday and we exchanged ideas about how to see through the fog of the non-free markets for insurance of the metals and investments in stocks. We provided to each other what insight we had, but we did not solve the challenge completely. The fog is too dense for us to find the clarity that we desire. We do the best we can and rest in the Lord.

Believe me, many are seeking to find their way through the dimness of our controlled markets. I have never walked through the English fog, but have seen many wonderful mysteries centered there where the fog gives a sinister dimension to the movie. The fog of intervention provides a similar
dimension, as well. Each of us wants to be able to see ahead. Perhaps, our Sovereign God does not want us to see ahead as clearly as we desire. Thus, we must diligently study His Word, apply it daily in every area of our lives, trust in Him, make decisions relying upon the guidance of the Holy Spirit's leading, and depend upon King Jesus for the results.


2010 gold price will be vulnerable to downward correction - S&P

In a recent analysis, S&P says copper demand and supply fundamentals remain favorable when compared to other base metals.

Author: Dorothy Kosich
Posted: Monday , 25 Jan 2010


Standard & Poor's has increased its metals price assumption by about 30% this year, citing higher spot and futures prices, "which in most cases have rebounded strongly in recent months."

S&P analysts have also raised their assumptions for 2011 by about 30% and for 2012 by about 20%.

The analysts raised S&P's gold price assumption by 13% from $800 per ounce to $900/oz this year. Gold price assumptions were raised by 23% from $650 to $800 for next year and by 12% from $625 to $700 for 2012. Read it HERE.


Are gold stocks in a bear market?

For seven months, investors have been steadily selling down gold stocks; the 100 least wanted have lost half their value.

Author: Barry Sergeant
Posted: Friday , 22 Jan 2010


Are listed gold stocks in a bear market? Whether the answer is yes or no, the position could change in an instant. For the meantime, stock pricing patterns of more than 500 gold stocks indicate that this global mining subsector, boasting an aggregate market value of just over USD 300bn, continues to take a beating. The signs have been there for ages, in stockmarket-time anyway.

For some seven months, investors on all continents have shown an increasing hesitancy in buying listed gold stocks, even as the gold price increased over the period from around USD 950 to over USD 1,120 an ounce, briefly, in the early part of December. Dollar gold bullion has since retreated to just below the USD 1,100 an ounce mark. Listed gold stocks staged a brief rally in early December, but have rapidly retreated. Barrick, the biggest name in the game, is currently quoted at USD 36.52 a share, a couple of dollars below levels seen in June 2009. Read it HERE.


Gold: Horrible investment but great insurance

Itchy money made 2009 one of the best years on record for the junior resource sector, according to Mickey Fulp. In sector terms, it won't be so easy to prosper in 2010, but nevertheless he's confident about prospects for specific companies that remain undervalued. Interview with The Gold Report. Read it HERE.

From Lew Rockwell: Do You Believe in Freedom? Read the speech given in Houston, Texas, HERE.

This is a worthwhile read giving a look at what freedom should really be here in America. It is what was intended by our founders, but lost as we moved away from the God through whose providence we were founded.

The miners from
The Currencies from
If you follow the currencies, particularly the dollar, you can see a struggle among the investors about the direction of the dollar. Virtually all agree that the dollar is headed downward in the longer run, but there is a great deal of indecision in the short run. Therefore, the Euro and the Dollar, particularly seem to be racing with each other to see which one is going to lead in the upward race. So, the fog extends to currencies, as well.

The Brazilian Real has been bouncing around, but somewhat lower after Brazil has attempted lower the value of the Real by selling it and buying dollars. This, too, may have had a small impact upon the recent strength of the dollar.

The recent news from China curtailing lending has dampened some of the currencies from countries with commodity economies, such as, Australia, Canada, and Russia. I really do not believe that the weakness in commodities will continue much longer. We should enjoy the somewhat lower prices of filling our SUVs, etc. at the pumps for as long as it lasts.

Here are some present prices: BYDDF 7.59 (This is a reasonable price in my mind.); FVITF 2.29; HL 5.24; DROOY 6.49; Gold up 4.80 to 1096.30; Silver up 0.14 to 17.11; DOW up 48 to 10221. I am really tempted to buy more of the mining stocks and BYDDF, but a hesitant to do so with fog which is hiding a clear view of the markets. I could regret the reluctance to buy, and would likely be in there were it not for the fact that I have a good cross section of the mining stocks and BYD Company in my portfolios now.

We will continue to feel our way through the fog and will try to let you know of any of my own transactions from time to time. We must hang tough and keep a reserve of cash to be ready for action. Let's be as Minute Men with our powder dry and ready to march into the fray when the fog clears a bit.

Best to each, Doug


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