Gold Editorials & Commentary

One must give a tip of the hat to the Wall Street conmen for engineering a reasonably robust stock rally. The Dow and S&P were led by financials. The Financial Times out of London claims 'no real money' was behind the stock rally of over 20%.

For years we have all watched Zimbabwe in dismay as it printed trillions of dollars thinking it could out run the inflation rate.

A LEADING EXPLORATION COMPANY IN THE PROLIFIC RED LAKE GOLD CAMP IN ONTARIO

Business Summary

Mention the word GOLD to any group of friend's colleagues or clients and watch their reaction. People either love gold or hate it; but there aren't many who feel ambivalent toward it.

At this special Easter Time I would like to dedicate my market work in general to a fallen friend from long, ago. I doubt that anybody would appreciate my work with the markets as much as he would.

In my previous paper The Revisionist Theory and History of Depressions I argued that persistently falling interest rates cause an erosion of capital, unseen but nonetheless lethal. Producers are squeezed and try to survive by cutting prices.

At this special Easter Time I would like to dedicate my market work in general to a fallen friend from long, ago. I doubt that anybody would appreciate my work with the markets as much as he would. I know you are smiling down upon us, Big Lou… "Free Bird."

Hypothesis:

Increasing the money supply fosters currency devaluation; AND currency devaluation is a discreet, subtle method for WEALTH DISTRIBUTION.

Gold and oil traders have been on edge for the past few weeks wondering if prices will drop or rally from this correction/pause in prices. You will see in the charts below that gold and oil are at points where they could go either way very quickly.

Another week full of "good" economic news has passed. Preliminary bank earnings floated the stock markets late in the week. Although the specific banks earnings won't come out for another two weeks the talk is that they will be great.

Why can't folks break the habit of being so pessimistic at market bottoms? Not that we're complaining, if they did that would be one less thing that we'd have to go on.

GLD - on sell signal.

This week in gold we have seen prices drop lower creating a lower low. This is generally not a good sign if we want to see higher prices in bullion and gold stocks.

PART 3: SHORT UPDATE AND REVIEW

Trading without indicators is like running blind and it encourages emotional trading that is the bane of successful investors.

PART 2: IT'S SIMPLY IMPORTANT

DEDICATION TO SCARAB

The Gold sector has been performing relatively well over the past month. The price of gold has broken trend line support but is still holding horizontal support and forming a bull flag.

Historically, bear market rallies have lasted 18 to 21 days on average and we have just finished that cycle late in the week. Will history rhyme this time? I think Mark Twain may have it nailed this time.

GLD - sell signal this week.

Last Friday I said we should be looking for a short-correction because the CVI (Climactic Volume Oscillator) was very overbought, and prices were approaching overhead resistance.

It is evident to all the US economic environment is an unmitigated disaster. In fact we seem to be hell bent for leather falling into another Great Depression (the recent Bear Market Rally in Wall Street notwithstanding).

MAJOR GLOBAL TURNING POINT

Last week all three resources pulled back after posted gains the week before. This week will be interesting with gold trading at support, silver just above and oil looking like its going to come down and test support as well.

I believe that the fundamentals for gold stocks are widely misunderstood. The current environment we are in is wildly bullish for gold stocks. This is not because of inflation, but because of deflation.

Gold bounces off support again today with some indicators pointing to much higher prices.

GLD Gold ETF Fund - Daily Trading Chart

A crisis of global confidence in the USDollar is upon us. Foreigners have begun to lose respect for USGovt approach to problem solving, for US bank administration, and for USDollar custodial management.

PART 1: IT'S SIMPLE MATH

Since 2005 we have shared our thoughts regarding our expectations of how the markets might move in this current large cycle.