Gold Editorials & Commentary

"In the short run, the market is a voting machine, but in the long run it is a weighing machine" - Benjamin Graham

After spending our entire lives in a dollar-dominated world, we Americans naturally view gold through a dollar-centric lens. We assume the gold charts we're seeing are universal.

Most competent market analysts, objective economists and honest politicians concur the current 26-year high in the Unemployment Rate at near 10% is totally unacceptable. To be sure it is today's gravest problem weighing on the country's population.

I have spent a considerable amount of time discussing how a supply-crunch is looming in the gold market.

Three weeks ago on February 5th, we saw an extremely high level of fear in the market with selling vs. buying volume at a 9:1 ratio. We note that in 2009 this extreme level of fear occurred at the bottom of each significant pullback.

Chairman Bernanke's testimony to Congress last Wednesday marks a major turning point as well as a flash signal for what lies ahead to anyone that is willing to listen.

I've exceeded the length I like the letter to be this week in the fundamentals section, so I will reserve the chart and technical analysis of the precious metals for my subscribers who will be getting a boatload of charts including monthly charts as well as the

GLD - on buy signal.

As expected the gold price was taken lower to the $1,100 level right on cue. I talked about this possibility in my latest weekly letter on the weekend.

Neither the US financial press nor the US bank leaders take the sovereign debt crisis seriously. Even the USCongress seems totally unaware of the growing global intolerance for government debt out of control.

I have been Banging the Drum in these letters about an eminent major economic and stock market crash since early 2007: A time when Barron's Round Table Gurus were predicting the continuation of the Goldilocks Economy and a DOW that would soon hit 36,000.

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value."  Alan Greenspan                        

Last week was strong with stocks and commodities moving up sharply. As nice as it was to see a rally, I still have my doubts whether this move has legs behind it. As prices moved higher throughout the week we saw volume become thinner and thinner.

Now that we are in the thick of earnings season for miners. I am seeing some excellent profits being reported by the miners, but their share prices are still well below when gold was closer to the $700 range.

GLD - on buy signal.

Ladies and Gentlemen:

Stick with me on this one. Last night I was reading a 2,300 year old economics book. Its title is Oeconomicus and it is a Socratic dialogue principally about household management and agriculture written by the Greek philosopher Xenophon.

After surging 11.9% higher in just 7 trading days, the flagship HUI gold-stock index is starting to recapture traders' attention.

This report is a mix of both current market action and educational material on how stocks and commodities trend (move).

The subprime debt issue of 2007 blossomed into a global credit crisis. Likewise, the Dubai sovereign debt issue will blossom into a global sovereign debt crisis in similar pathogenesis.

The past week has seen the convergence of a variety of factors that together point to a powerful rally in gold soon. Thus it appears that we have been too cautious in the recent past.

As the world's athletes gather in beautiful British Columbia for this Olympic Games they are all focused on but one thing, the Gold. As investors we should also be focused on the Gold at the moment.

GLD - on sell signal.

In recent months, the US dollar has been surging higher. This impressive strength is a radical change from last year's relentless grind lower. Across the globe, the majority of analysts expect this run higher to persist for a variety of reasons.

The world's three largest depositories of investments are Pension Plans, Retirement Programs (IRAs) and Insurance Companies. Recently the total investment assets of these depositories amounted to approximately $43 Trillion ($43,000,000,000,000):

This so-called recovery is problematic and now it is slowly entering a new dangerous phase. Bank losses have now been eclipsed as the major issue of sovereign debt emerges in a more sinister manner. This is only part of the problem and it will be overcome in the...

Last week was an incredible week for trading the intraday charts. With rising volume and volatility prices began to move up or down for extended periods of time allowing traders to profit from these powerful short term price swings.

Gold performed as predicted in the last update, rallying up to the top of its Descending Triangle before reversing and crashing support at the bottom of the Triangle on Thursday. Many traders were startled by the magnitude of the Thursday's $45 drop.

The information revealed this past week suggests that the US's problems are slowing and possibly about to take a turn for the better. At least that's what the establishment would have you believe.