Gold Editorials & Commentary

Neither the US financial press nor the US bank leaders take the sovereign debt crisis seriously. Even the USCongress seems totally unaware of the growing global intolerance for government debt out of control.

I have been Banging the Drum in these letters about an eminent major economic and stock market crash since early 2007: A time when Barron's Round Table Gurus were predicting the continuation of the Goldilocks Economy and a DOW that would soon hit 36,000.

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value."  Alan Greenspan                        

Last week was strong with stocks and commodities moving up sharply. As nice as it was to see a rally, I still have my doubts whether this move has legs behind it. As prices moved higher throughout the week we saw volume become thinner and thinner.

Now that we are in the thick of earnings season for miners. I am seeing some excellent profits being reported by the miners, but their share prices are still well below when gold was closer to the $700 range.

GLD - on buy signal.

Ladies and Gentlemen:

Stick with me on this one. Last night I was reading a 2,300 year old economics book. Its title is Oeconomicus and it is a Socratic dialogue principally about household management and agriculture written by the Greek philosopher Xenophon.

After surging 11.9% higher in just 7 trading days, the flagship HUI gold-stock index is starting to recapture traders' attention.

This report is a mix of both current market action and educational material on how stocks and commodities trend (move).

The subprime debt issue of 2007 blossomed into a global credit crisis. Likewise, the Dubai sovereign debt issue will blossom into a global sovereign debt crisis in similar pathogenesis.

The past week has seen the convergence of a variety of factors that together point to a powerful rally in gold soon. Thus it appears that we have been too cautious in the recent past.

As the world's athletes gather in beautiful British Columbia for this Olympic Games they are all focused on but one thing, the Gold. As investors we should also be focused on the Gold at the moment.

GLD - on sell signal.

In recent months, the US dollar has been surging higher. This impressive strength is a radical change from last year's relentless grind lower. Across the globe, the majority of analysts expect this run higher to persist for a variety of reasons.

The world's three largest depositories of investments are Pension Plans, Retirement Programs (IRAs) and Insurance Companies. Recently the total investment assets of these depositories amounted to approximately $43 Trillion ($43,000,000,000,000):

This so-called recovery is problematic and now it is slowly entering a new dangerous phase. Bank losses have now been eclipsed as the major issue of sovereign debt emerges in a more sinister manner. This is only part of the problem and it will be overcome in the...

Last week was an incredible week for trading the intraday charts. With rising volume and volatility prices began to move up or down for extended periods of time allowing traders to profit from these powerful short term price swings.

Gold performed as predicted in the last update, rallying up to the top of its Descending Triangle before reversing and crashing support at the bottom of the Triangle on Thursday. Many traders were startled by the magnitude of the Thursday's $45 drop.

The information revealed this past week suggests that the US's problems are slowing and possibly about to take a turn for the better. At least that's what the establishment would have you believe.

GLD - on sell signal.

SLV - on sell signal.

THE GOLDILOCKS ECONOMY REVISITED

Stocks and metals have been on a steady rise this week. The US Dollar drifting lower has helped to add fuel to the oversold bounce in equities and metals we are seeing.

Stocks - NYSE 65 Minute Chart

Over the last couple weeks, gold and silver stocks have been clobbered. The flagship index that tracks this sector, the HUI, hemorrhaged nearly a sixth of its value in just 8 trading days!

A great disconnect exists in the gold market between the exchange futures contract price (the paper price) and the gold bullion paid price for transactions (the physical price).

All should be moved by the following dramatic picture and eye-popping gold price charts. The first is an actual photo of currency traders in Sao Paulo, Brazil in early 1999.

Among the many opinions expressed by billionaire investor George Soros over the course of the 2010 World Economic Forum in Davos, Switzerland was his statement on January 28 in an interview with Maria Bartiromo, host of CNBC's Closing Bell, that "When interest rates...

The past two months have been tough on the precious metals sector. We saw precious metals lead the market higher all of last year until December 2009 when prices plummeted as the US Dollar started to bounce.