Gold Editorials & Commentary

US Treasury Secy Hank Paulson and USFed Chairman have embarked upon yet another trip to China, joined even by Commerce Secy Gutierrez. This Strategic Economic Dialog between the Untied States and China deserves comment.

Its amazing how one thing leads to another. For the past few months I have been writing a novel (nearing completion) and have not been following the markets particularly closely.

This week, both the $HUI and $XAU's weekly charts have confirmed a major buy signal.

Given that foreigners are the primary purchasers of US Treasury bonds (snapping up 56% of inventory in the last auction), a declining dollar is supposed to be a major drag on bond prices.

A steady, relentless, and nearly perpetual force pushing the USDollar down in the next two years will be the housing bear market.

Don't stop me, I'm on a roll. First of all, I always write in the front of books I read, giving my opinion about it. I have a book titled "Bankruptcy 1995." It was published in 1992, and I read it in 1993.

I was in Chicago on November 17 to address the MBA class of 2007 at the University of Chicago Graduate School of Business.

Gloom and Doom? Maybe. I have heard it and felt it before. Allow me to remember…possibly for everyone's benefit. Remember, I have been doing this since 1977, so I have seen and felt them both before.

Don't look now, but a new emergent monster is growing, this one a close cousin to the trade gap.

The year was 1944. For the first time in modern history, an international agreement was reached to govern monetary policy among nations.

It never ceases to amaze how televised media reports on the U.S. economy are almost exclusively about shopping. Such reports almost always feature images of sales clerks frantically stocking shelves and long lines of consumers swiping their credit cards.

The dollar plunged with startling ferocity late last week, driven by heavy selling. This was very bearish action that signals panic, and the probable onset of a severe downtrend.

Gold Update IX indicated that there was a high probability that the 5 month correction in the gold price finished at the $560.7 London PM fixing on Friday 6 October 2006. That is exactly what happened.

To listen to the Bears over the past few years, you would have thought we would all be in breadlines and soup kitchens by now. So far, all of the ranting about doom and gloom sounds more like the boy who cried wolf than accurate forecasting.

While Americans were busy digesting their Thanksgiving feasts, the rest of the world was barfing up dollars. As a result of our massive trade deficits, foreigners certainly have their bellies full of them.

THE INTEREST RATE CONUNDRUN

"The HUI, gold, and silver will experience one more decline lasting approximately 3 to 6 weeks before the correction that started in May 2006 will be over. The types of corrections that are taking place do not require new lows in order to be complete.

In the past few weeks, my analysis on the gold sector has turned from bearish to bullish. But I also realized that I could be early, or wrong. Like Carl Swenlin always says, technical analysis is a windsock, not a crystal ball.

It's about time to go into a few ways that markets work, and why. As in the stock market, all items have a "spread." No, this isn't peanut butter or peach jam, but a common expression used by traders not only in metals, but in stocks as well.

During WW II, the Germans and Japanese both told their respective citizenry that all was well, and the Allies were being soundly defeated. A B-17 every hour was being turned out by Boeing, and thousands of Jeeps were being built every month by Willys.

Many traders have written me lately, a little worried that perhaps the sentiment among gold traders have reached a frantic level, according to some sources. And that, does not bode well for gold from a contrarian point of view.

Gold has broken out of its large triangular consolidation to commence a new uptrend that should take it comfortably to new highs. The breakout is very obvious on weekly charts, which were included in the THIS IS IT article at the weekend.

My early years as a Broker and investor witnessed my attempt to master all aspects of this enormously complex and difficult field. I studied all the books I could find on individuals who had amassed great fortunes investing or trading for their own accounts.

One of the dangers of continually being close to the market, is that you can get lost in day to day detail, or even hour to hour detail, and end up not being able to “see the wood for the trees”.

This morning, whilst scrolling through the charts, the chart below (courtesy Stockcharts.com) caught my eye and prompted two questions.

Folks, we have a major breakout in gold and silver this week, and if past history is a guide, we are looking at new highs in both metals in the near future.

On the CBS Sunday Morning show of October 28th, a segment dealt with the software which allows total reconstruction and alteration of any photo.

The Current Phase of Precious Metal Investing

There is nothing that possesses all the qualities of money in the way that gold does, so there really isn't a competitor to gold as "the ultimate money".