Gold

What has been missing during this 3+ year decline in PMs has been what we have pointed to on several occasions, a form of ending action that sends a message that a change in trend is in progress. Last Thursday and Friday’s sharply higher volume and wide ranges lower is the kind of activity that leads to the end of a trend. There is not enough to say it has happened, to be sure, but the end game is starting to step up and be closer to a resolve of ending of the down trend. [Let me explain further.]

Sit back and take a look at the economic & financial situation in the world today and I wouldn't be surprised in the least that you will conclude that it makes sense to own some physical gold and/or silver - and there couldn't be a better time than now, with both down so much in price, to start accumulating some as finances permit.

The downside risks to owning gold are much greater than the upside risks. Without the onslaught of newly rich Asian buyers its price is coming back down to more closely track those of other commodity prices and, while I worry that central banks may inadvertently spark a round of higher inflation in the years to come, if I had to reconcile those two views, I would say that today's elevated real price of gold has effectively priced in a lot of higher inflation in the future. This article presents 6 charts which clearly illustrate just what is currently going on.

The continuing upward trend in the gold/silver ratio (continuing weakness in silver relative to gold) is not in conflict with the view that gold commenced a cyclical bull market last December and is working its way through a lengthy basing process. Here are the details:

We are at an interesting and perhaps critical juncture with respect to the direction of the gold price as it approaches a key support level. There are many mixed signals out there and the market seems to be vacillating, frustrating both bulls and the bears. Let us look at both cases in order to try to understand what the gold market may have in store for us during the coming weeks and months.

Ever since the world suffered a near collapse of its economic and financial system in 2008, investors throughout the world have purchased physical gold in increasing volume. Everywhere, that is, except if you lived in the United States where the opposite was the case. Here's why.

…Have gold and silver seen a bottom yet, and is there a turnaround soon in the cards? No, and no…It is still business as usual as gold and silver languish around recent lows.  There is no date one can mark on the calendar that points to an end of the Rothschild dominance over Western fiat currencies and their suppression of …

John LaForge, commodities strategist at Ned Davis Research has said that gold should drop about 40% lower than where it is currently trading down to $660 an ounce. I think LaForge is dead wrong and this article argues the reasons why the gold market has not yet peaked and why we are in a counter-trend correction within the long-term bull market.

If I am right about my views going forward then gold isn’t just risky based on past performance, but it could be even riskier in the future as the "faith put" subsides and the myth that “gold is money” disappears.

An analysis of the ratio between the market capitalization of gold and the gross world product over the past 63 years suggests that the current price for gold has further to fall and that it would not be wise to begin buying gold until prices have fallen below at least $1100 - and not expect gold to appreciate beyond $2,000 any time soon. Here's why.