Gold Editorials & Commentary

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.

Summary and Conclusions

The young man knows the rules, but the old man knows the exceptions.

Oliver Wendell Holmes

Below are some questions from my dear readers and even dearer subscribers who are so gracious in their questions and statements to me, and have so much patience with my tardiness in responding sometimes, as well as missing the occasional weekly letter.

Another fantastic week for precious metals as the US dollar continues its slide lower. Energy commodities like oil and natural gas are having some difficulty finding buyers.

We had an excellent entry point on the gold stock ETFs in August, and our positions are deep in profits. However, our allocation was too modest, and there has not been any decent set ups to add to positions.

Happy Thanksgiving to all Gold-Eagle.com readers! We certainly have a lot to be thankful for and one surely doesn't need to be a USA resident to celebrate this time of year.

So you've lost or almost lost your job, your home, your savings, and your investments. Perhaps your marriage and family are next along with your dignity, your peace of mind and even your sanity.

November 25, 2009 --From yesterday's Associated Press: "Demand for gold held up as investors looked for safe places to park their cash.

Gold is now pushing deeply into critically overbought territory on its RSI indicator, so consolidation/correction can be presumed to be imminent.

Not in the last few years have conditions been aligned for a truly explosive upward move in the gold & silver prices. A confluence of factors simply could not be more bullish, promising, and powerful.

The world champion of the money printing world, Zimbabwe, is now operating on a quasi gold standard with a largely free enterprise economy. There may be lessons to be learned by other countries from Zimbabwe's experience.

All the precious metals are strongly bullish at the moment. Gold is seeing accumulation on sideways moves now instead of corrective moves. The action is more bullish than I would have imagined at this stage in the secular bull market.

Since the market crash in late 2008 we have seen investors favor quality stocks that pay dividends and have steady earnings. Fast growth companies and equities with physical resources like commodities have also done well.

Much has been made of the fact that the 1980 top of $850 per oz equates to a price of over $2200 per oz in 2009 after allowing for inflation. But let's take a look at the 1980 chart for gold.

The US Dollar Chart below - courtesy stockcharts.com - is whispering some very quiet yet potentially important messages.

GLD - on buy signal.

Five years ago this week, an obscure little ETF called StreetTracks Gold Shares was born. As the first American ETF enabling stock traders to gain direct price exposure to a physical commodity, GLD was truly revolutionary.

A retired friend, an academic in a field unrelated to the subject of economics or finance, recently asked me to tell him what I thought was happening in these (to him) surreal worlds.

So far this week has been generous with our commodity ETFs moving higher, other than natural gas which is clearly in a bear market.

In 1964 the USGovt introduced the zinc dimes clad with silver. They at least admitted the debauchery publicly. Now pre-1964 silver coins are all considered different, and valued differently too, higher. Rome committed the same coinage fraud 1900 years ago.

Commodities continue to perform well as the US dollar tests the October lows. If we step back and take a look at the weekly charts of the gold, silver, oil and natural gas ETFs we can get a better feel for what to expect in the coming week.

On longer-term charts gold looks great here as it accelerates away from its recently completed 20-month consolidation pattern. The prospect is for a powerful, steep multi-month advance, punctuated by mostly brief periods of consolidation.

The major US indices resumed their rallies this past week but that didn't stop the metals from moving higher also. It looks as if the US markets will continue higher for now. The rally concerns me and is something we need to keep a close eye on.

GLD - on buy signal.

With the US stock markets very overextended technically, my recent research has focused on this development's implications.

I was sent an email with ten questions this week. That is nothing new but the title of the email had me a bit confused as to why I was on the list of recipients. It was titled "Questions for all wise people".

So far this week has been slow in regards to commodity ETF funds. Gold continues to shine while silver refuses to make a move higher.

Dear Mr Bernanke,

YOUR HEALTH AND YOUR JOB

Everyone is talking about commodities as the place to be in the coming months. I tend to agree, but it is still important to know where each commodity is trading to maximize returns and reduce risk.