Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19
US Corporate Debt Is at Risk of a Flash Crash - 10th Aug 19
EURODOLLAR futures above 2016 highs: FED to cut over 100 bps quickly - 10th Aug 19
Market’s flight-to-safety: Should You Buy Stocks Now? - 10th Aug 19
The Cold, Hard Math Tells Netflix Stock Could Crash 70% - 10th Aug 19
Our Custom Index Charts Suggest Stock Markets Are In For A Wild Ride - 9th Aug 19
Bitcoin Price Triggers Ahead - 9th Aug 19
Walmart Is Coming for Amazon - 9th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Where Does Gold Go From Here?

Commodities / Gold & Silver Oct 24, 2007 - 01:33 PM GMT

By: David_Vaughn

Commodities

A picture of gold's price action Tuesday shows it bouncing up and down. This is normal and to be expected in a classic bull market.

So, where to from now? And maybe we should ask where we presently are at the moment? Gold remains strong and staying well above 700.


“A perfect storm of market forces could push this precious metal, already at a 27-year high, toward $1,000 an ounce.” “Gold has been in a long-term upswing, rising more than $500 an ounce since 2001. However, few investors seemed to notice. But it's hard to miss the tear gold has been on since August. The metal closed at $760.20 an ounce on October 16, up $3.10 from the previous day's close. That's up some 16% since its August low and not too far below an all-time high of $850, set in January 1980.” “The stock market's volatility and continued uncertainty about how last summer's credit crunch ultimately will play out, heightened fears of inflation and an ever-weakening dollar are combining to send investors straight to gold…” Kiplinger

Yet, the juniors have yet to move as well as the seniors. What gives?

“But what explains the apparent disconnect between the spot price of gold and gold equities?” “Canaccord points to short-term liquidity concerns in the ABCP and related markets…” “If this assumption is in the ballpark then we suggest investors rethink this approach as holding gold equities, in our view, is not a bad hedge at all against the risks within the broad market, and in particular, the risks associated with the potential for further declines in the U.S. dollar –at least over the next several months,” Canaccord said.” Financial Post

I believe mom and pop speculators remain in denial that gold has shifted gears and is now in forward drive. But no worry, generally with every momentous change in society it takes a while for the general population to get on board.

“Crude prices briefly touched $89 a barrel Wednesday, a record not adjusted for inflation, before settling at $87.40.” USATODAY

But mark my words as the general population will get on board. They have no choice as they see there 401K eroding from the effects of inflation. Everything across the board is rising in price.

They observe oil climbing to 90 dollars a barrel. They see a housing crisis that is still unfolding and not yet at its peak and damaging an entire economy. And how goes the housing market and the subprime mess?

WASHINGTON - Construction of new homes plunged to the lowest level in 14 years in September as turmoil in credit markets intensified the problems in the housing industry.” “The decline was more than double the 4.2 percent drop that analysts had been expecting and it pushed activity down to the lowest level since March 1993.” “…the housing downturn, already the worst in 16 years, may be headed for bigger troubles. Housing activity is now 30.8 percent below the level of a year ago.” “Both Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson warned this week that the housing downturn was likely to persist longer than had been expected.” "Builders are in a panic mode and are trying to catch up with a rapidly falling market," said Mark Zandi, chief economist at Moody's Economy.com.” Associated Press

Where do you go from here except to invest in gold. This is what gold was designed for. To shine forth in moments of extreme need.

“The massive cut in ratings created uneasiness among investors that mortgage sector problems are still getting worse…” “The uneasiness spurred Treasury prices higher as well, as people flocked to safer investments.” “…loans have gone delinquent and into default at soaring rates in recent months.” Bloomberg News

And if you cannot see “extreme need” at the moment then you really do have blinders on your head. Remember the old term stay the course? I know that does not sound exciting but that is what you must do now.

“…Dundee Securities analyst Jean-Francois Gagnon thinks the recent rally for gold stock has more staying power than those that came earlier in the year. One reason is because gold has historically proven to outperform most commodities in times of liquidity and credit crunches.” Financial Post

Gold may be moving ahead of the juniors at the moment but the juniors will catch up. Sometimes to wait patiently for a situation to change and improve is the hardest thing to do. But that is what the moment calls for. Hold on to those quality gold shares. If you have listened to quality analysts then you are holding the correct stocks worth holding for the longer term.

“Dave, You are mighty right. For those of us who are paying attention history is happening right in front of our eyes, the alien age stands out and is so apparent that none but few see, and those that see are the ones that READ!” “Gold is history and history is Gold.” “What is said here is good news for us the believers that have held this metal now for more than a few years. Good words & the best. WL”

Our world is really in transition now. I'm not sure what the final shift will look like but it will be very different. And in this new change I believe the world of economic behavior will be turned on its end. That's really where the role of gold comes in. As the world changes direction gold will remain a firmer anchor more so tomorrow than today.

“…bulls, including Larkin and Citigroup's John Hill, see gold making a run at $1,000 an ounce or higher within a couple of years -- not so outlandish a forecast when you consider that in inflation-adjusted terms, gold's 1980 all-time peak would translate into $1,700 an ounce today.” Kiplinger

Gold and resource stocks, historically, have presented the highest rate of returns. Gold Letter, Inc. reviews gold and other resource stocks under valued and poised to rise in this time of increased demand. Natural resources and related contrarian stocks will only escalate in value as the world continues to experience unprecedented population growth. Gold Letter's 10 best performing stocks are up over 2,000% and GL's top 55 performing stocks are over 400%. Close to 90% of all Gold Letter's recommendations since inception in January, 2003 are close to 200%. GL charts are computer generated and updated every hour while markets are open.

Click here to order Gold Letter

“The Worldwatch Institute, an organization that focuses on environmental, social and economic trends, says the current rate of global demand for resources is unsustainable.”  

Email me if you have the time.

By David Vaughn
Gold Letter, Inc.
David4054@charter.net

© Copyright 2007, Gold Letter Inc.

“The Worldwatch Institute, an organization that focuses on environmental, social and economic trends, says the current rate of global demand for resources is unsustainable.”  

The publisher and its affiliates, officers, directors and owner may actively trade in investments discussed in this newsletter. They may have positions in the securities recommended and may increase or decrease such positions without notice. The publisher is not a registered investment advisor. Subscribers should not view this publication as offering personalized legal, tax, accounting or investment-related advice. The news and editorial viewpoints, and other information on the investments discussed herein are obtained from sources deemed reliable, but their accuracy is not guaranteed. © Copyright 2007, Gold Letter Inc.

David Vaughn Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules