Gold Editorials & Commentary

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".

Investor lust for hard assets has dimmed gold's status as the world's premier non government-issued form of money. Conventional wisdom now holds that gold, oil, and base metals are inextricably linked.

This morning's release of disappointing GDP figures for the third quarter capped a week of bad economic news. Nevertheless, Wall Street bulls continued to march to the pleasant beat of the "soft landing" scenario.

Last week we covered the GLD, and this week, we will cover the gold stocks ETFs.

First, a simple analysis

Since August 5, 1993, there has been a systematic attempt to administer downward impulse to the gold price through loans and sales of the metal.

Self proclaimed innocent Jeffrey Skilling has been sentenced to 24 years in the slammer, and fined $45 million for the loss of an estimated $65 BILLION with the collapse of Enron.

In the last few years, a dangerous trend has occurred, whereby hidden machinations, secret dealings, and devious activities have grown to become commonplace. What has become more alarming is that so few people seem bothered by the trend.

I thought we might spend a bit of time, today, looking at the formation of the current HUI fractal compared to the earlier one. To do so, we will use a bit of a different look, today, using "ribbon moving average charts".

Currently, traders are equally divided between the bull and bear camp, both with very convincing arguments why this and why that. Naturally, that is what makes a market.

This week it was announced that both producer and consumer prices dropped by 1.3% and .5% respectively, while housing starts unexpectedly increased by 5.9%.

It's close to Halloween, so why not one in basic economics? Here goes. Fact # 1: No currency in the entire world is backed by anything, be it precious metals, mulberry leaves, scrap metal, copper, acreage, or cotton thread.

Don't look now, but a puss-filled sore festers. It grows on the USEconomic foundation.

As mentioned recently, I have not been writing about gold personally and presenting articles about gold in the News & Analysis section of the website because I am a gold bug.

Before getting into the fundaments, let's briefly look at Metanor Resources from the perspective of a technician.

A reader recently sent me an interesting chart that compared the housing industry to the S&P 500 stock index.