Gold Editorials & Commentary

It's been a great year as we head into the final few trading sessions. The past several weeks the indexes have not done much of anything which is why we are now in cash.

Think isolation. Think monetization. Think trapped. Think Catch-22, no remotely viable option. Think end of the road in a gigantic USTreasury bubble, in the process of discredit.

Gold Trends

Gold behaved as predicted in last weekend’s update - it rallied into the middle of last week before plunging on Thursday and then ended the week with a modest upturn.

There are some that will tell you that the world's first central bank was the Riksbank of Sweden established in 1668, and others maintain that it was the Bank of England in 1694.

Interestingly enough the long inverse correlation between the large US markets and the US dollar has seemingly broken down. Since March 2009 the dollar has been in a protracted downtrend while the markets have risen steadily.

GOLD AND THE DOLLAR

GLD - on sell signal.

One year ago this week, I wrote about the end of the gold-stock panic.

It's been a great week so far. Stocks and commodities are moving as expected from my weekend trading report. I like to see the market unfold in a calm collected manner.

My wife and I watched Oprah interviewing President and Mrs. Obama for her Christmas Special.

The continuation of the bank dominoes took 14 months, but it occurred. The initial destructive impact craters were carved in the United States and England.

The past three weeks have been interesting to watch as the Dow (DIA ETF) has broadened causing traders to be shaken in and out of positions. Commodities have been under pressure as the US dollar has risen.

The last update posted on the 29th November called a top in gold, which occurred just a few days later.

This weeks letter is slightly shorter than normal to make up for last weeks long one. And of course it's party season and the last thing most people want to do is work! So let's get right into it.

GLD - sell signal this week.

As the world's second-largest exchange-traded fund, and sixth-largest holder of gold bullion, the GLD gold ETF has grown into a juggernaut.

ETF trading has made it so easy for traders and investors to get maximum exposure to the entire market without the high fees of mutual funds and manager.

Is gold a "bubble" because it has now become popular or is there still worthwhile upside? As a contrarian, it is more difficult to reconcile the metal's recent popularity with the prospect of future rewards.

It is foreseeable that once this period of willful self-delusion reaches its apex; the citizens of this nation will make their voices heard and new economic and political theories will emerge to replace the old tried and failed, Keynesian self serving incre

Perhaps the greatest weakness of man is his unceasing effort to defy history, and in the process, he simply apes its previous disastrous outcomes.

We got the heavy reaction in gold that we had been expecting for some days on Friday. The problem is that we also got a big important breakout in the dollar, which we had acknowledged as a significant possibility for some time.

Gold retreated late in the week like a cheating tiger. Gold will apologize over the coming months for it's transgressions.

GLD - on buy signal, barely.

Gold's performance over the past month has truly been epic. Since late October, it has soared 18.2% higher. Over a 21-trading-day span, no fewer than 16 days achieved closes at new nominal all-time-record highs!

The market has had a fantastic week so far for stocks and precious metals. The financial and energy sector are underperforming which is a concern, but we continue to hold our positions and will wait until a reversal to lock in our gains.

THE PILLARS OF BORROWING AND HOW THEY WERE PUSHED ASIDE

This year has been a very exiting time for traders and investors. We have seen a steady climb in prices with controlled pullbacks in the broad market and gold.

The calm Thanksgiving time never came this past week as markets crashed worldwide on fear the Dubai debt crisis will be the spark that lights the next round of the bear market. Whether that be true, it's still too early to tell.