Gold Editorials & Commentary

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.

In this Gold Market update we are going to "cast our net wide" and consider the outlook not just for gold and PM stocks but also the dollar, other commodities and the the broad US stockmarket.

Let's ponder for a minute. What is money? Looking at an older 1986 copy of The World Book Encyclopedia tells me that money is three things. A medium of exchange. A medium of account. And what I'd like to briefly focus on, a store of wealth.

I thought I would put this more detailed report on finding and trading low risk setups for gold, silver, oil indexes etc....

GLD - on sell signal.

THE ELITE AND THEIR PART

The stock indexes have been trading very choppy making it difficult for swing/trend traders. It's during times like this when seasoned traders rise above the herd of average traders.

The only walking done this week was by Martha Coakley as she exited stage left, embarrassed and shocked. Everyone else ran out of every market and most commodities as the political talk raged on.

The monthly chart of the Dow Jones Industrial Index below (courtesy BigCharts.com) shows that the Index:

It was a heart pounding week on Wall Street as traders and investors locked in profits during 2010's first round of earnings season.

On Friday Goldman Sachs and J P Morgan broke down decisively from their Head-and-Shoulders tops, a development that we predicted before the open based in large part on the huge downside volume in these stocks on Thursday.

"IRRATIONAL EXUBERANCE" It has been my contention since September that we are in a period that looks nothing like the past, but I was wrong.