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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold $800 - A New Generation

Commodities / Gold & Silver Nov 28, 2007 - 12:52 PM GMT

By: David_Vaughn

Commodities

Will 800 become the ceiling or preferably the new floor?

Short term I don't know, but I am excited watching so much positive strength in this market. The crap is hitting the fan and gold is responding appropriately and properly. My personal opinion is that 800 may just become a floor price for gold. But who am I to know?


We continue to enter both a new generation and a new direction. The decade coming upon us we shall see the harvest of the subprime mess. This decade is quickly coming to an end and so many events are being lined up as the new conflicts for the coming decade. Fall rambles along with winter just around the corner. But the economic and financial crises we are witnessing will take no notice of the seasons and will continue down their appointed path.

Well, the holidays are definitely among us now. A lot of people building family memories while others are living the horror of watching their home foreclosed. I don't believe fault can be cast on the subprime borrowers. The entire housing market has been abused and taken advantage of these past five years. We all have grown used to property values rising. We all have grown used to watching our equity easily grow year after year.

I continue to be amazed at those who do not understand the nature of gold stocks. These are speculations and there is no guarantee any company will rise in value and do well. Instead, this is a game of averages and placing your bets on a stable of different companies – at least six. And after a year or two consider your average gains as compared to losses. Don't just buy one stock and fall in love with it and never buy another. In the beginning of this article we talked about a new generation? Read the following below,

“Momentous events were bearing down on America in 1929 and 1941, unforeseen except by a prescient few…” Newsweek, 11-19-7

There are defiantly momentous earth shaking events occurring even now as we speak. I believe the Euro is up past 1.48. Now that is something I did not expect to see in my generation. Oil is topping out at a hundred a barrel. Again a momentous change in the price of oil. And an estimated 5% of home owners due to lose their home via foreclosures within the next two years or so? I feel like I am living in 1931 except for the fact that the greater crises are yet to come.

“Hi David, First off - a happy Thanksgiving to you and your family.” “…wonder if someone's run out of gold, or doesn't want to risk further short positions in gold in case it rises sharply in the next few months. No matter - gold will go higher. Patience is a virtue. Besides, it's up almost 30%, again, on the year. Not many investments perform like that year, after year. I'll take it and be happy - and look forward to next year. And we don't want to attract TOO much attention to gold, yet, right? Best regards, George L.”

The following below is a commentator worth listening to.

Ron Struthers – “I really don't focus too much on prices and timeframe, just the trend.” “…the Fed is scared to death of a debt implosion that could result if we got a good recession. So they will continue to lower interest rates to inflate the money supply to no end to avoid this.” Kitco .com, 11-22-2007

I liked especially what Ron said about watching the “trend.” Remember what I said about the gold price recently. Expect 2 steps forward and 1 step back. If you can understand and accept this principal you will not be so upset to witness gold's volatility. Anyway, the important consideration to remember is the fact we are entering a new generation with this coming new decade. And many of these crises we are observing right now are not expected to reach their climax until well into this new decade; Gold stocks continue to be an excellent investment in a rising gold price environment.

When gold was flirting with 250 an ounce ten years ago the press could not provide enough coverage about gold. All negative of course. I remember entire page spreads on USA Today that were simply beautiful. Wonderfully delicious pictures of gold and the product that was so worthless that many folk saw a day when all the gold in the world would be thrown into the sea. Well, gold has turned in the other direction and now reaching for 1,000. But do you see any significant coverage on a rising gold price? No. Unless it is simply to say that what is happening is a temporary rally that won't last long. Well, I have news for these folks. Gold has entered a new generation and a new era and the price still has far to go.

“The lesson is that we just can't stop ourselves from making history.” Newsweek, 11-19-7

And what is the lesson to be learned about gold today?

“The fact is that Canadian mining stocks are still remarkably cheap.” Financial Post, 11-07

We are living in the last days of cheap resources and commodities. Recognizing these facts Gold Letter, Inc. reviews undervalued gold, silver, uranium and other resource stocks under valued and poised to rise in this time of increased demand for resources. Gold will only escalate in value. Gold Letter's 10 best performing stocks are up over 1,700% and GL's top 55 performing stocks are up over 300%. Close to 90% of all Gold Letter's recommendations since inception in January, 2003 are up over 150%. 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

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