Gold Editorials & Commentary

GLD - sell signal this week.

It was Mark Twain who said "there are three kinds of lies: lies, damned lies, and statistics." Benjamin Disraeli actually said it before Mark Twain in different words and since then many more have repeated the phrase.

Commodities and stocks almost look ready for a rally or at least a relief bounce. The market is down over 5% and the normal pullback this year has been 4%.

Actually, the golden opportunity is for buying silver at current prices.

Not 'How High Will Gold Go?'. Nobody knows for sure. Anyone who says they know is a fool, has inside (illegal) information, or has a hidden agenda. The answer is not knowable as the future is uncertain.

To meet the growing needs of investors interested in investing in the broader, yet small-, micro- and nano-cap skewed, precious metals mining sector (i.e. the 'juniors') 4 new indices have come on the scene lately to wide acclaim.

The past week in gold, silver, oil, natural gas and the broad market wasn't anything to write home about. We are seeing controlled profit taking which is making the market choppy.

I remember well when gold rose from the measly price of $400 to above $700, the excitement was contagious. Then it rose from $700 to $1000 and the excitement was marginal. Now as we are at the beginning of the next major up-leg the excitement is moribund.

GLD - on buy signal.

EXIT STRATEGY

It's sure been an awesome year in the stock markets! By this week, the benchmark S&P 500 index (SPX) had soared 62.3% from its despair-laden March low and 21.6% year-to-date.

Commodities so far this week have not changed much. But I can point out a few things for us to watch Thursday and Friday.

Precious Metals

- Gold GLD fund - Silver SLV Fund - PM Stocks GDX Fund

The US Federal Reserve continues to talk about their urgent Exit Strategy. My theory is they will be doing mostly talking and almost no doing. The nations that talk the least will be hiking interest rates the most, like Australia.

The "Paradox of Thrift"

Fool's Gold Basis

GLD - on buy signal.

In one of the previous essays I've drawn Readers' attention to the fact that gold has now decisively broken above the $1,000 level, and that this profound action has important implications for all gold and silver

The chart below (courtesy stockcharts.com) is of the Dow Jones Industrial Index divided by the US$ Index

The ultimate key to success in all trading, both long-term investment and short-term speculation, is simple. Buy low, sell high. Excel in this, and trading the financial markets will eventually make you wealthy.

The heralded end to the Petro-Dollar defacto standard completes the loop, the vicious cycle that will work to destroy the USDollar. In a sense, the US$ had to face an end, its sunset guaranteed when Nixon defaulted on its redemption value.

Dow Jones Commodity Index Fund - This index tracks the entire commodity market as a whole. Over the past two years we have seen commodities drop in value substantially. The good news is that we could be seeing prices rise going forward from here.

With gold at all-time highs many investors are worried about buying and rightly so. I think gold will be moving towards the $1,500 level over the next three to six months.

GLD - on buy signal this week.

GDP

With gold forging glorious new record highs (in nominal terms), traders' interest in this metal's 8-year-old secular bull is ballooning rapidly.

Commodities have and continue to be a fantastic trading vehicle for those who can stomach volatility. After last year's market crash most commodities pulled back to normal if not lower than normal trading ranges.

The story hit like a thief in the night, even bearing Biblical proportions.

There are currently serious "wars" being conducted within the boundaries of the USA.

The impending gold breakout has been so long in the making that it has engendered a "we'll believe it when we see it" mentality amongst most market participants.

Gold is behaving well technically and is, thus far, on course to break out to new highs soon.