February 3, 2012 - Gold broke a few traditions and boundaries in January as the precious metal extended a New Year’s rally into a full uptrend and the gold price breached the 200 day moving average. The key indicator that the market had entered new territory was the breach of the key 200 day moving average, a technical marker used to track the progress of the gold price over a specific period of time. There is an upside and downside to the average, and the breach of those support levels indicates a fundamental change in the activity of the market.

While viewing the January performance, remember that just in December many analysts were questioning if gold had entered a bear market because the correction, or temporary shift downward in price, had become pronounced. The correction of December 2011 brought the price of gold into the $1,500 range, though it never breached the $1,500 level, and signaled a significant double-digit percent change in the market. However, the fundamentals that guide the long term bull market, which have been in place for a decade, necessitated that the gold price would again resume its upward climb and December was actually only a buying opportunity.

That has been fully realized in January of 2012. Gold gained 11 percent in January and by the end of January gold showed a gain of 15 percent from the December 2011 lows, meaning the long-term bull market was intact, sound, and here to stay. The demand for gold has surged both domestically and abroad with the US Mint breaking sales records and recent data reported by Xinhua shows a 49.7 percent increase in demand for gold over the Chinese New Year.

With two of the largest markets for gold fighting for every ounce they can get, the price of gold has all the technical variants necessary to skyrocket in 2012. Most major banks are revising their forecasts for gold higher. There may be temporary slow downs, but since December we have learned these are buying opportunities more than anything else in a long-term bull market in which the increase of the price of gold is the most reliable factor.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 1, 2012 - Following the announcement by the Federal Reserve’s Federal Open Markets Committee last week that prompted the price of gold to rise 4.4 percent in twenty-four hours, the gold price reached levels comfortably over $1,700 by week’s end. This signaled an end to a market consolidation that began after the nominal peak in August-September. The market reached an all-time high of $1,923 an ounce in late August and early September of 2011 and then began a correctional phase in September that brought the price of gold to the $1,600 range.

Gold then resumed its upward climb from October until December, when another correction brought the price of gold down to the $1,500 an ounce range and caused many analysts to openly and vocally wonder if gold had entered a bear market. Some managers, Dennis Gartman included, actually publicly sold their gold in the midst of the correctional phase. The fundamentals, however, indicate that gold has been and still is in a bull market, and the precious metal resumed an upward movement on the New Year. Dennis Gartman has since publicly apologized, saying he missed the turn, among other things.

The New Year’s rally in gold was impressive this year, particularly. Beyond that, the rally extended into an upward trend that broke the 200 day moving average, the official end of the December correction for most analysts and advisers. Also, news came from the US Mint that it broke record right and left with the New Year of 2012. In the first few weeks of the New Year, the Mint sold more silver Eagles than it had in ten of the previous twelve months. The first business day of 2012, the Mint sold 37,500 ounces of gold Eagles, 2,000 ounces of gold buffaloes, and 3,197,000 of silver Eagles.

This is good news for gold and indicates where the price will be going in the coming months. Now, with the recent Fed decision, a new dynamic presents itself. The breach of the 200 day moving average indicates a new wave in the gold market. While it certainly confirmed the end of the December correction, it also signaled a larger consolidation had ended. The consolidation began after the all-time high of $1,923 was reached in late August and early September. Now, two corrections later, the market is consolidated and all fundamentals are intact for a major move up in the price of gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 31, 2012 - The Federal Open Markets Committee publicly stated they intend to keep interest rates low into 2014, providing the impetus for an immediate boost in the spot price of gold over $1,700 an ounce. That price threshold has not been breached since December, before the correction in gold that caused some analysts to question whether the market had entered bear territory. The immediate and strong reaction in the spot price of gold is an indicator of how much the Federal Reserve policy means in the gold market.

The persistently low interest rates, a policy begun ten years ago and accelerated during the economic crisis of the past four years, have been one of the most important fundamental drivers behind the performance of gold. Gold has been called the asset of the decade and year after year it performs very well in this economic climate, partially because of the policy of the Federal Reserve and its effect on the market. The price of gold in 2001 was around $280 an ounce and reached an all-time nominal high of $1,923 an ounce in August and September of 2011. The spot price of gold very closely mirrors the Federal Reserve monetary policy in this way, and that’s what makes gold a good buy now.

Gold is already up 9.4 percent year-to-date and we’re not yet through January. At this point, gold is beating the S&P 500 by a mile as that index only gained 5.6 percent year- to-date. Gold actually gained an entire 4.4 percent on Wednesday after the Federal Open Markets Committee announcement and continued its gaining streak for the rest of week. This continues gold’s rise in the decade. Gold showed a gain of 11.6 percent last year, even with an end of the year correction and a gain of over 24 percent in 2010.

The bottom line is that persistently low interest rates promise to see the rise in the spot price of gold continue through 2014, extending the forecasts for gains in gold put out by such major banks as Goldman Sachs, Credit Suisse, and Societe Generale. It has been acknowledged that gold will perform well through 2012 by these banks, with many placing a forecast of over $1,900 per ounce. However, we now know based on the Federal Open Markets Committee’s statement that gains will continue through 2014 and the spot price of gold may rise even higher than previously expected.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 25, 2012 - As Greece failed this week to secure a deal with bondholders to borrow at a reduced rate, the latest in a series of failed deals that have added to the woes of the European country’s situation, the spot price of gold drifted lower on the weakness of the Euro. Private lenders now have a more influential role in determining whether Greece will face a hard default, thus exposing other European nations to serious risk of default themselves. While gold has performed very strongly since the New Year based on market fundamentals alone, at times posting double digit gains in only a few trading sessions, the latest debacle in Europe has put a damper on the Euro in currency markets, which is weighing down the price of gold today.

Already, however, investors who were sluggish to get in on the end of the correction in December have begun a bargain-buying rush into gold, providing some resistance on the downside. The current effect of the Euro’s weakness, which translates to the American dollar, will end will be very short-lived, making the short-term bet on gold a good one. It’s possible the price could be depressed until the end of next week and the effects of current trading will probably be felt into next week, but these are all signs of a healthy market that has strong fundamentals propelling it to the upside.

Often, investors and speculators misunderstand the movement of the market in response to the latest out of Europe. In the markets, nothing happens instantly and everything happens instantly. While the failure of bondholders to reassure investors has contributed to the plagues of the troubled economy, it will also provide a flight to gold as even more money flees to gold as a safe haven asset. First, however, the money must first move through the currency markets, which temporarily provides an adverse effect on the price of gold. In plain English, the deal fell through and that hit the Euro hard. The price of gold fell with the Euro. This provides an opportunity for buying before the price balances out. Hence the term, “buy the dip.”

The spot price of gold reflects this trend right now. Buying has resumed its hot streak in China and India, the largest gold markets on the planet who happen to be more insulated, ideologically and economically, from the European problem. Within the week, the same trend will be occurring in the West and the spot price of gold will reflect the move upwards and back into primary upward price-trends.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 23, 2012 - The price of gold popped higher in trading on today and has settled above $1,670.00 an ounce. This comes with the plethora of bad news about Europe that has actually been saturating the media this entire week. On Friday, France lost its AAA credit rating which put the European Financial Stability Facility at risk. Eight other members of the fund were also downgraded. These downgrades were expected and to an extent the market has already absorbed some of the impact before the news. However, the actual event itself is having an effect on the gold price as the precious metal is sought as a hedge against the debt problems in Europe.

Additionally, the World Bank has cut is economic forecast and said Europe entered recession in the fourth quarter. The global growth outlook, a major index of projected growth in world economies was cut by the most in three years, from 3.6 percent for all countries to 2.5 percent. The European area was previously forecast at 1.8 percent of growth in 2012 and now is projected to contract at 1.8 percent. The World Bank has not released data of this magnitude since 2008.

All this would not be so troubling if not for the problems maturing in Greece. The head of sovereign ratings at S&P said this week on Bloomberg that he believes Greece will default shortly. A default by Greece on its debt obligations, or an ancillary responsibility, could send the limping European Union into an unrecoverable tailspin.

It is the strength of this fear that is providing some of the current boost to the gold price we’re now seeing. Any problem in the European Union will propel the price of gold higher as fiat currencies suffer in the markets and investors flee to safe haven assets. What we are experiencing now could be a very faint preview of things to come.

We are now seeing part of the reason why gold has performed so well in recent years. Despite the December correction, gold ended last year with a gain of over 10 percent. So far this year, gold is up over 5 percent. Now, with the downgrading of the European economies and the threatening problems of Greece, gold is on track to become the most sought asset and the gold price will reflect that status.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 17, 2012 - Markets are relatively quiet as the gold price ended the week up 1.3 percent and most businesses are closed Monday for the holiday. Since the New Year, gold has benefitted from a 5 percent gain and the US Mint has been making record sales, at times outpacing the monthly averages of last year in a matter of days, as with silver Eagles. However, it’s not only all the bankers buying gold and silver with their yearly bonuses that were credited to accounts at midnight on December 31st. The current gold market represents and reflects a worsening global situation in which markets are at substantial risk and the gold price is partially reflecting that sentiment.

With France being downgraded, German business leaders calling the time to pull out of the Euro, and increased war cries between Western powers and the allies of the Islamic Republic of Iran, there is not a market in the world that is not partially influenced by the negative sentiment about the future. Excepting, of course, gold. And, specifically, gold in one’s physical possession, which is independent from any market and retains its inherent value for all time.

JP Morgan’s infamous CEO, Jamie Dimon himself, has declared to an Italian newspaper that the institution he runs could lose up to $5 billion from exposure to PIIGS country’s debts. Hopefully, he was not referring to his customer’s own money when he made that pronouncement. It is entirely possible that JP Morgan has made moves to hedge itself against further trouble in Greece, Germany, and Europe after the failure of MF Global, which was exposed to bad European debt and still can’t account for $1.2 billion of its own customer’s money after going bust in October.

It can be relatively assumed that American banking institutions are vastly more exposed to bad European sovereign debt than we now know, with only Jamie Dimon making a public pronouncement on it. All investors are aware that further problems out of Europe will boost the price of gold through a chain reaction that involves a fiat currency crisis and corresponding appreciation in tangible commodities—gold—coupled with a safe- haven buying rush which no one can accurately predict.

It’s unfortunate that further problems out of Europe will account for a great deal of the gains made in gold this year. But, in terms of the prudent investor who is protecting himself, his family, and the value of his labor, buying gold now to secure oneself in the future is probably the wisest course of action. The gold price will rise coincident with any further disruption in the European economies.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 14, 2012 - The market has performed admirably in the New Year as the gold price benefitted from a pop in trading last week and ended the December correction by blasting through the 200 day moving average this week. Now resting comfortably above $1,640 per ounce, the price of gold has proved itself to be resilient and fundamentally strong. The floor below it established, many are speculating on where the price of gold will go next.

In the very near term, strength in the US Dollar will weigh on gold a bit due to the decision by the ECB to leave rates unchanged. That decision, of course, shocked no one. And the very temporary possible declines in the price of gold will quickly be erased in the sands as gold regains the ground within a week of such a move occurring.

There is a little talk, based on gold’s relationship to monetary policy in the United States, of another correction. It is always possible and the prudent investor must bear that in mind, but at this juncture in the markets, the price of gold is showing more technical signs of rising than falling. Indeed, the only surprise right now is that the price is not rising more quickly due to bargain-buyers running in as they did in the September correction, though this can be attributed to sentiment after two strong corrections in the second half of 2011.

Right now the price of gold is highly affordable as a long-term holding and store of wealth in an uncertain market. Buying gold today will yield a gain in twelve months’ time. There is no question about it. Banks know this, as well. That’s why central banks bought gold at forty-year highs following the September correction and that’s why several banks have released reports stating that gold is a good market for all of 2012.

The next move in gold may not be a terrific break out on the upside, but it will certainly be a steady appreciation in value over the next year and more. Based on fundamentals alone, the gold price must increase to keep pace with money creation, making it a very sure bet right now.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 12, 2012 - There’s a lot of hot news on the wire as the gold price has breached the crucial 200 day moving average in intraday trading yesterday at $1,639.40 an ounce. Though gold ended the day slightly lower, around $1,630 an ounce, the technical indication is a very good omen for the price of gold in the coming weeks and puts the seal of approval on the end of the correction that began in December.

Investors in gold who are not as familiar with the long-term bull market fundamentals currently at work have had a difficult time understanding why we experienced a heavy price correction of over 20 percent from the all time high in late August and early September. Though it is easy enough to remind all that the central banks of the world, following the correction in September, bought gold at record highs not seen since the end of Bretton Woods in 1971, the connection between the dynamic then and the dynamic now should be more apparent. The moves in the gold market were literally echoes and surely next quarter there will be a report that central banks were buying in records yet again.

Last week, the price of gold popped in a New Year’s rally that bought the price up 3.2 percent, but many assets gained on the New Year and it was difficult to advise specifically that the correction had ended and we are again in unmitigated bull territory. Yesterday’s breach of the 200 day moving average makes the case that we are indeed in a bull market with gains to be made in the coming weeks and the correction that occurred in December has run its course entirely.

This makes the price of gold now very opportune for investors looking to get into a market set to rise or for investors who are already in the good market and want to increase their positions. Major banks including Goldman Sachs, Credit Suisse, JP Morgan, and Societe Generale have all released reports stating that gold will be one of the best performers of 2012. Today, a new report has surfaced in which Goldman Sachs declares, “Gold remains high in the top tier of our preferred commodities for 2012.”

The price of gold is ready to rise—are you ready to buy?

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 10, 2012 - Last week’s market action, with its double-digit jump in gold price in mere minutes, all but confirms the conclusion of the correction has come. Prices, however, are still very affordable at just over $1,600 an ounce after an all time high of $1,923 an ounce just a few months ago. The New Year’s rally, which is currently playing into the dynamic of the price of gold at least somewhat, can account for the pop in trading and should even out either this week or next. That is to be expected in a healthy market and in no way discounts the long-term fundamentals that are driving the gold price higher.

To support this, a number of major banks released reports, internally and to their clients, in the latter part of 2011 announcing that gold was the position to take for all of 2012, as it would show very good gains. At this point in our economic recovery, that is not exactly a daring declaration. Gold realized a 26 percent yield in 2010 and, after the December correction, a 10 percent gain in 2011, making it the best performing investment of the year for both years.

Given the multitudinous financial problems of the last two years, gold’s performance in an uncertain market is partially predictable and wholly admirable. Nothing has performed as well as gold. In fact, some analysts question and hypothesize as to why gold hasn’t performed even better in that period of time.

Now we face a situation where the European problem will be reaching a point of shifting from its current stage to a new phase in the coming months and gold stands to be the biggest beneficiary. If central banks allow further bailout packages, it will debase the currency and drive the price of gold higher. If any of the economies in the European Union are allowed to fail, it will spark the biggest flight to safe haven assets we have ever seen and the safest haven is gold.

Prices, given all these dynamics in play, are extremely affordable right now. It is highly advisable that you beat the oncoming crowd tomorrow by taking advantage of the gold price today.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 9, 2012 - The first week of trading in the New Year has produced some of the best gold prices we’ve seen in trading in months and all but declares the December correction to be over. Gold had lost about 20 percent since the correction began, mirroring the action of the September correction that brought the price of gold from its all-time high of $1,923 in very late August and early September down almost 35 percent. We now know, based on reports in mainstream media, that central banks then swooped in on the market and began buying gold at levels not seen since 1971 and the end of Bretton Woods. Clearly, the banks saw a deal and took advantage of the gold prices available.

The action we’re seeing currently is similar. Though most of the analysts who were declaring that gold had entered a bear market are now clearly discredited, full confidence in the end of the correction has not yet established itself in the markets. This, of course, despite a $40 gain in twenty minutes one day this week and $20 in a few minutes yesterday. Also, a level of support seems to have established itself on the psychologically important $1,600 level. If the price should drop below $1,600 at any time, it would not change any of the fundamentals of the market nor would it be a technical indicator. However, if the price of gold closes above the much-vaunted 200 day moving average of $1,627 an ounce, we will surely be looking at a bull market and a whole lot of investors running in next week.

Citi has already come out and said the sell-off has concluded, though with the usual caveat that it could drop as low as $1,550 an ounce before turning. It now looks as though the price of gold will not be dropping that low and Citi’s projected target of gold at $2,400 an ounce is more probable in the market. Citi further projects a resistance level at $1,802 with a further high of $1,920. Once we cross again above the 200 day moving average, we will be looking at the gold price oscillating between these resistance levels until the next wave of the bull market takes effect.

These technicals make the current prices some of the best prices we will see in gold this year.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 4, 2012 - John Embry, Chief Investment Strategist of the $10 billion Sprott Asset Management, has good reason to feel justified tonight as the price of gold popped $40 in intraday trading yesterday, bring the price of gold back over $1,600 an ounce. Sprott Asset Management is the Canadian fund that made headlines recently for its quiet plans to purchase $1.5 billion of silver bullion. Those plans leaked, and Embry took some heat. Now, however, with gold up $20 in twenty minutes today, Embry’s outlook is getting some vindication.

He remained cool in his confidence on the precious metals bull market. His thirty years of investing may not have swayed his detractors, but he understands the market’s signals and knows the bull market is still intact. “I do think there is a strong probability that the end of 2011 marked the bottom for gold and silver and that may be the lowest that will ever be seen. That’s a strong statement, but the reality is gold and silver may never trade lower than that again.”

While Embry’s statement is as yet unquantifiable and a further correction to the downside before the gold bull market resumes is always possible, the fundamentals of the market are consistent with his statement and show a long term bull market. Further, his resume and record provide the support for the occasional strong statement. And, unlike George Soros, who was buying gold in late 2009 and early 2010 even as he called it “the ultimate bubble on television, Embry and Sprott Asset management are walking their talk with the $1.5 billion order of silver put in a few weeks ago.

“I would be very surprised…if gold would be weak at all in the next six months,” Embry continued, highlighting the multiple factors that are currently benefitting the gold market right now including persistently low interest rates, negative real interest rates, and Quantitative Easing. Gold has been the best performing asset of the past twelve months, even with the December correction, and promises for multiple reasons to be the best performing investment of the next twelve months.

The current excitement in the gold market is not just New Year giddiness, but the manifestation of fact—we are in a long-term precious metal bull market. Gold was up over 26 percent in 2010 and over 10 percent in 2011, even with the December correction, and has started the year off on a good start. All other asset classes look sluggish in comparison. Take the action of the gold price this week to be an indicator of the action we will see this year.

 Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 3, 2012 - While the current gold price is relatively affordable following the correction that began in December following the European decision of the Federal Reserve on December 2, it is worth remember that gold has been up fot eleven years in a row. A correction was certainly overdue, but at year-end it can skew the data. Investors need to remember that the fundamentals still indicate a gold bull market for the foreseeable future.

In 2011, gold yielded a return of 10.19 percent. This makes it among the best investments of the year. However, if we were to exclude the correction of December, the price of gold would indicate a far higher return on the investment. A good example is the return of 2010, which averages about 29.62 percent. Any asset that gains 29.62 percent in a year is an asset you should own now.

There is still some relative confusion in the gold market concerning the recent correction. It is very important to note that the price of gold shows signs of stabilization and possibly even reversal. The possibility for a deeper correction always exists, but it would still be consistent with the gold bull market and prices rising in the future. Given proper timing and the right dealer, you will see a return on any investment in gold.

Central banks, who bought gold in record highs not seen since the end of Bretton Woods in 1971 at the last correction in September, certainly show strong signs that gold continues in a fundamentally strong bull market that will provide returns for the year to come. Reports circulated by Goldman Sachs, Credit Suisse, and Societe Generale project growth in the gold market at least through 2012 based on the Federal Reserve policy of permanently low interest rates alone. Add in the fact that real interest rates are at a negative, and the growth in the price of gold is all but guaranteed.

2012 will be the year of gold. The question of whether the current correction has fully extended or will move slightly further is secondary to the larger picture gold is painting. We are in a gold market for at least the next twelve months. Gold has been the best investment of the past twelve months and the current gold price is the most affordable we’ve seen in months.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 30,  2011 - The price of gold has responded to developments out of Europe by drifting still lower. On November 30, the Federal Reserve announced a bargain it had made with the Bank of England, the Bank of Switzerland, the European Central Bank and others to swap dollars at artificially low rates, possibly avoiding a credit crisis. The same day, Forbes reported that a major European bank may have nearly failed the night before.

Since that time, the gold price has reacted predictably, given the outcome of the Fed intervention. The policy immediately strengthened the Euro against the Dollar and drove down the price of gold, eventually making December the most difficult month for gold since the correction in September. The current low price of gold is essentially artificial, since it would be much higher without the central bank intervention. This has been cited as the main reason long-time commodity traders have been literally “forced” to buy gold right now at low prices.

The policy of the central banks is affecting the gold market in such a way as to make the gold price, for the time being, a trigger to buy. The gold price should be much higher. It is only through the fiscal intervention in the European debt crisis that the price of gold is currently so affordable.

The EURUSD breached January 2011 lows, precipitating a further move lower in gold and silver. Gold and silver themselves have breached the September correction. The long- term fundamentals have not changed, but right now the precious metals are extremely undervalued and therefore a good price to buy.

It is important to call attention to the fact that it was subsequently reported that central banks bought gold at forty-year highs following the September correction. We will not know how much central banks are buying now until the first quarter, as bank are not required to disclose changes in reserves, but as central banks bought more gold in the third quarter of 2011 than they have since the end of Bretton Woods in 1971, we can fairly assume banks are buying gold right now in extremely high quantities. The gold price will be affordable during this correction.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 28, 2011 - The price of gold will end the year in positive territory, up over $200 per ounce. This is still a modest gain considering the all-time high of $1,920 reached in August. Of course, the September correction of over 20% reset a lot of gains thus far and changed the game for gold. The mini-correction we are currently experiencing is similar in many ways, though not nearly as extreme as the correction of September.

It should be made very apparent that the corrections experienced this year have been heavily attributed in mainstream media to liquidations of gold positions in order to generate quick cash to cover losing bets. Recall that up until the end of this summer, there were still the glimmerings of hope on the horizon and investors had been investing like it. When that came to a head in September, they had to sell the only thing they own that is actually worth something—gold—and pay for those losing bets in credit default swaps, structured investment vehicles, and beachfront property in Central Texas.

Then, after the price of gold had corrected 20%, central banks swooped in and began buying it at forty-year highs. After the third quarter ended, it was finally reported that banks bought more gold than they have since the end of Bretton Woods in 1971. If it’s the investment of the people making monetary policy, it should probably be your investment, too. We don’t know which banks bought which amounts of gold as they are not required by law to disclose and rarely, aside from the Central Bank of Russia and select others, decide to disclose changes in reserves of their own volition.

Right now the European problem stands poised to affect the price of gold the most in the shortest amount of time. Any news out of Europe, literally, will have some effect on the price of gold. Since the European Summit in Brussels revealed major rifts between European nations and European leaders, it has become very questionable whether a financial viable solution can be found within the political structure. The legitimacy of the Euro is ultimately in question, and any development out of Europe will most likely be the next influence on gold. In the meantime, the price of gold is relatively low and we should take advantage of that.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 27, 2011 - Now that we all know the bottom is intact in the mini-correction, it is time to address the issue of rehypothecation and its effect on the price of gold. We all know that derivatives, which are valueless paper completely independent from the underlying goods from which they’re derived, are effectively what brought the financial system to the brink of collapse in 2008. Derivatives were made legal in 2002, though they existed in some forms before, and subsequently grew at exponential rates until their existence began to literally threaten the system as a whole.

Unfortunately, the lesson has not been learned as more derivatives were created in the first six months of 2011 than at any other time in history. There are now over $707 trillion worth of Over the Counter derivatives in existence in the world. Until now, a very effective way of dealing with the derivatives mess has been through the purchase of and investment in gold and silver. Gold and silver are very refined investments in that they completely bypass all of the financial skullduggery occurring elsewhere in the markets.

Then MF Global collapsed on Halloween. We heard about how the CFTC created the rule allowing Jon Corzine’s bank to use customer funds to finance a $6.3 billion losing bet on European debt that brought the institution down into insolvency. Then, we heard that, as part of that bankruptcy, customer accounts had gone “missing.” At first, it was only $600 million. Spare change. Then Forbes reported the number is in actuality $1.5 billion that trusting bank customers “may” see again.

While they wait, consider a lawsuit that is currently pending in the southern district of New York between MF Global and JP Morgan concerning which bank actually owned about 800,000 gold and silver contracts when MF Global declared bankruptcy. Rehypothecation means two banks can use the same gold and silver accounts at the same time to finance their independent investments. That’s your money.

This is eerily similar to the scheme of financial derivatives, but in terms of investing in gold and silver it screams that the price of gold and silver is currently undervalued. However rehypothecation works out, or doesn’t, it’s very urgent now to utilize the low gold price to protect your assets and maintain your wealth.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 23, 2011 - Nobody thought modern Greeks would be digging for the storied gold of ancient legends, but most people didn’t think a modern European country would reach insolvency. Now, as Greece faces a $350 billion data gap in its budget, retired and working Greeks are losing their pensions, and young Greeks are out of work entirely, it is being reported that many Greeks are going to grab their shovels and get digging.

Gold recently hit an all-time high of $1,923.70 an ounce, making it a very valuable find for the indebted Grecians. Whether or not the legends of Alexander the Great burying chests with untold fortunes of gold guarded by dragons are true, the temptation of financial stability is enough for Greeks to believe. Greeks with any means whatsoever have typically already left the Mediterranean nation for brighter shores in Britain or elsewhere, despite those countries’ own economic problems. There are several reports coming out of Greece now about the homeless crowding every stoop, parts of Athens literally being sectioned off because they are so dangerous, and youth buying crack for 5 Euros a hit.

The situation in Greece is indeed quite dire, and the price of gold is quite high. So it’s understandable that Greeks with any sense, ability, and know-how would be grabbing their shovels now and looking for the resource that has survived the millennia with its value intact—gold. Can you imagine a small jewelry box with $100,000 of gold, comparable to a box for 8x10 photographs, being found in 500 years and being worth as much or more? Can you imagine the dollars in your digital bank account doing the same thing?

Gold is here and here to stay. The gold price clearly indicates that now. The fact that Greeks are digging for gold indicates its inherent value as a currency. Digging for gold is illegal in Greece and any discovery of antiquities is heavily regulated, which is also indicative of the breadth of the problems facing the Greek people and the lengths they are willing to go to find gold. We, as Americans, can learn a little about the value gold offers from the Greeks. For those still stuck in Greece, the price of gold is tantalizing enough to offer a way out, a real path to safe haven.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 21, 2011 - time there’s a market correction, multiple television show pundits pop up to proclaim their righteousness concerning the gold price, though their time in the spotlight usually only lasts fifteen minutes before the price of gold resumes its upward climb. That’s been the trend for eleven years now. During that time, gold has had three 20 percent corrections and it still remains the best performing asset from 2001 to 2011. Picking the top of gold would be a task comparable to picking the bottom of the housing market, but, fundamentally speaking, we’re not there.

Most of the heavy drops that we’ve seen are indicative of action in Asian markets, where sentiment towards precious metals has cooled slightly. A flight to Asian currencies, among other things, contributes to the move from gold. For many years, a trend has generally formed in which support for gold gains during Asian trading and the price that support garners takes effect on the London market. This trend has reversed over time, suggesting also that Asian traders are luring Western traders away from their positions in gold.

Meanwhile, long-term demand in Asia is still quite strong, given both the industrial and monetary uses of the metal. The Asian continent will need precious metals to sustain itself no matter how the cake is sliced and that is good for gold. The divergence in price and demand is part of the momentary unwind in gold and has already started a reversal trend.

In addition, low interest rates, which are here for the foreseeable future, are a strong fundamental for growth in the gold market. Any additional flight to gold for its safe- haven status in light of the European problem will also benefit the price, but one need not count on it to know that gold will perform well in the coming two years at least. The dynamic between the East and the West is a very good indicator for the power in the precious metals.

Otherwise, low interest rates are enough to forecast a very powerful position in the gold market. Owning fiat currencies has never been riskier than in our times and every dollar in your savings account is currently losing value at a surprising rate. This guarantees the price of gold will rise and rise a great deal over time.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 19, 2011 - While it’s rather unbelievable, several well-known analysts and commentators have seized upon the recent dip in gold to claim the gold price is currently in a bear market. Of course, these particular pundits have all been pretty burned by their predictions of a gold bubble bursting in the past. It was none other than George Soros who called a top to the gold market in very early 2010 when the precious was still trading at $1,225. Meanwhile, the hedge fund that Soros operates had to report that in the fourth quarter of 2009 it bought more stake in exchange-traded fund SPDR at 3.7 million shares at a cost of $421 million. Soros was buying gold as he was bashing it.

Nouriel Roubini, possibly the most pessimistic of the crowd, has also unleashed an attack on gold and gold buyers via twitter. That’s right, the man who predicted $1 trillion worth of losses in the US housing sector, then went and bought a $5.5 million dollar Manhattan condo with a $2.99 million mortgage, is now calling the gold market.

We cannot really know the reasons these moneymen have for specifically behaving in direct opposition to what they say in public forums. But we can be pretty sure based on provable history and by following the money that what they say bears little resemblance to reality.

Anyone liquidating a gold position right now because they believe the price of gold today is the highest we will see in the coming months has no familiarity with the gold market and is losing money. Pullbacks and setbacks are normal. Corrections are healthy and they demonstrate that the market is poised to rise again and rise higher. No market that you want to invest in goes straight up all at once.

If a market is going straight up, you have already missed the opportunity to get in. But, if there is questionable movement down, sentiment indicates uncertainty, and the long-term fundamentals still project a gain, as the price of gold today does, you have an opportunity to get in. Now, the trick is knowing it when it comes around and being able to filter out all the hypocrites.

The price of gold today is a buy because in the coming months it will be worth more than you will have paid for it.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 16, 2011 - The price of gold reached a ten-week low this week, echoing a similar correction that occurred in September. Strength in the US dollar following last week’s Fed decision is generally regarded as the fundamental behind the current sell-off in gold, though it is discussed that many positions are being forced to sell their gold in order to avoid a liquidity crisis. The dollar has already lost some of the steam from the intervention last week and eventually that differential between currencies will affect gold. In the meantime, the price of gold is right to buy.

On Wednesday, gold fell below the crucial 200-day moving average, a key support level, but after Thursday’s release of strong U.S. economic data the sell-off abated a little. Immediately following the announcement of the decision by the Federal Reserve to swap dollars at a lower rate with other central banks around the world, there was actually a boost in the price of gold as investors sought to swoop in for immediate gains.

Some of those same investors are now running, despite their history of not quite being accurate about the price of gold. We can’t know surely how the Fed decision and monetary intervention will affect the price of gold because the action they took is highly abstract and does not have an immediately quantifiable effect on gold. However, from history we know that when people are running away from something it indicates a possible buying opportunity. It is precisely at this time that the smart investor goes in and purchases goods for pennies on the dollar.

While the breach of the 200-day moving average does signal a significant event in the gold price, investors and analysts are always careful to say the bull market in gold is not over. Despite recent losses, it is generally acknowledged that gold has a long way to go and a lot of potential. Occasional corrections are healthy signs that his fundamental is still true and investors know it. The last time we experienced a similar correction was in September and we now know that in response the central banks were buying gold at record rates not seen since the early 1970’s.

Central banks are probably taking the same steps now and buying gold as fast as they possibly can. This correction will not last forever and only those who recognize it now will take advantage of it. The gold price is right to buy.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 14, 2011 - Jim Rogers is a pretty classy guy, in addition to knowing the gold price like the back of his hand. When the legendary trader talks the smart investors listen. Lately, the question of whether he is buying gold has been coming up again and with a little more ferocity. Rogers has been stating for a while that he anticipates a pullback in the price of the precious metals and he has been waiting for that pull back to buy more gold.

The recent change in price does not reflect the decrease Rogers has been looking for. Rather, it is the direct effect of the Federal Reserve and central bank’s decision to lower the swap rate of dollars. This has caused a fundamental difference in the pricing of gold that shows a change in the market.

Asked about his plans for buying and the recent Fed decision, Rogers said, “They [central banks] are going to loosen up even more on money. That’s not good for the world, not good at all, but that’s all they know how to do. So, I’m contemplating, being forced to buy more real assets.”

The only real asset in this market is gold and Rogers knows it. In his estimation, gold is the winner on either side of the fight. If the economy does get better, the price of gold will benefit from shortages. As Rogers put it, “shortages in commodities will make sure I make money.” If the economy continues its current course getting worse, Rogers says, “I’d rather own commodities because they’re [central banks] are going to print more money.”

Rogers has been, and remains, very bullish on gold for the long-term. He expects the metal to perform well over the next decade, at least, and given the action taken by the Federal Reserve and central banks, he has good reason to. Fundamentally, what the Federal Reserve has done is print more money. As Rogers says, “that’s all they know how to do.”

However the price of gold is reacting in the short term, there is only one clear winner after the Federal Reserve’s intervention. Gold will outperform every other asset in either scenario. This explains why central banks have been buying gold at forty year highs as of the third quarter. If the people making the rules are buying gold, we should all be taking advantage of the current effect on the gold price and we should be buying now.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 12, 2011 - Aside from the price of gold, near as anyone can tell, the only news out of the European summit that took place last week in Brussels is that it happened. There appears to be some dissent among European nations, and particularly their leaders, over the course of action Europe should be taking. Specifically, the British Prime Minister has been cited. With a debt to GDP ratio in Britain of 1,000%, one can understand why.

Solving these major problems will take time and innovative financial policy. We aren’t really seeing either of those in Europe at this point. The recent selling in gold has been reflecting only the news that there was a summit in Europe and not the substance of that summit. Therefore, as the European debt crisis continues in a recognizable way in the coming weeks, the price of gold will reestablish its climb upward as traders and investors realize the news of a European summit is pretty hollow.

It can be confusing to think that selling on the news could cause such a price difference as we’ve seen at the end of November and into December. However, speculation in the markets works exactly in this way. Learning to spot the speculators and their movements is a key strategy for success in any market.

The recent movements in the price of gold do not reflect a supply and demand struggle or a conflict between available physical output and market consumption. The price changes in gold reflect, rather, sentiment in world markets as traders react to and attempt to benefit from the effect of the news on the markets.

Gold should be viewed as a long-term investment. Though many analysts feel day- trading vehicles have their place, gold is fundamentally and historically a store of wealth that is physically held by the owner. One of the reasons central banks began buying gold at forty-year highs after the September correction is because they understand that gold, in the long term, will perform very well.

The gold price can, at times, be deceptive and good traders count on that. The news out of Europe is not affecting in any way how much physical is coming to market at this time. Taking advantage of the current low price due to the news-related selling is a good strategy for any gold buyer.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 9, 2011 - The gold price reacted rather dramatically to the European Central Bank’s action today. The lowering of interest rates by a quarter of a percentage point, as well as the decision to make it easier for banks to get loans, will hopefully provide for a way to a solution to the sovereign debt crisis in Europe. The best, perhaps, that can be hoped for in the decision is a position of leverage for the embroiled European banks to make a deal with a foreign lender. Any such deal would benefit the price of gold.

Whether this is sound fiscal policy is beyond an answer at this point. Many analysts regard any intervention as kicking the can down the road and creating a bigger problem. Alternatively, a debt default of a European Union member nation would have devastating effects on the world banking system. Jon Corzine’s appearance before Congress this week is a direct effect of an American bank’s exposure to European debt problems. Of course, MF Global should have been making better investments and better protecting the bank’s customer money, possibly by investing it in gold.

Strikingly, either method of dealing with the Europe problem will ultimately benefit the price of gold. While initially any semblance of a solution, such as what emerged out of Brussels, will create a temporary decrease in price, the intervention itself will inflate the currency and thus the price of gold.

The measures taken to increase the ease and ability of banks to borrow money indicate a lingering liquidity problem. It was, after all, a credit crunch that began this crisis and after last week’s Fed decision we can garner that the flow of money is still a problem in the system.

Of course, a major European failure would send the price of gold much higher, but it is much more difficult to quantify how and precisely why. It is a scenario none should want to see come to pass, but, if it must, it makes the best sense to hedge your own and your family’s value with gold. Right now, as the world rides the high of any action, it would be a tremendously good time to take advantage of the resultant low gold price.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 7, 2011 - In a week that has seen Forbes reporting a near “major failure” of a European bank and a Federal Reserve decision to lower the swap rates that apply to the US dollar, the price of gold has drifted a bit. Most analysts were predicting quite a pop after the Fed announcement last Wednesday to be taking effect Monday, and, indeed, there was an initial jump of about $20 in some markets.

Since then, prices have a sagged a little and, technically, there is a very good reason. As a summit meets in Brussels to discuss not only the future of the countries with egregious sovereign debt problems but also the future of the Euro itself, investors are simply waiting on the news. It is difficult to predict with any clarity precisely what will happen as a result of this summit or any decision or policy crafted while it is in session.

The problem with that tactic, of course, is waiting on the news would definitively put you behind the curve on the trade. Most investors and managers are hedging for both sides of the bet at this point, but once that next shoe drops in Europe it’ll be quite a sprint with quite a few runners.

The funny part is the price of gold will really benefit from any action taken in Europe. If there is another bailout, the price of gold will increase. If there is a political deadlock or no deal at all, investors and buyers will continue a now time-honored safe haven buying of gold.

However, it should be noted that the possibility for a price correction does exist and should be taken into account when investing. One of the great things about buying gold now is that in the future, no matter how much you paid for it, you will with certainty be able to sell it for at least as much. But, a technical price lowering, which occurs with a relative frequency in the market, is a possibility. We saw such a correction in September, when central banks swooped in and began buying gold at forty-year highs.

Any slight movement in the price of gold downward is a buying opportunity in this market. Given the long-term projections of where gold could possibly go and its status as an inherent store of wealth, the price of gold is always relative and certainly always worth at least as much in the future.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 5, 2011 - This past week, after a near “major failure” or an European bank, as reported by Forbes, the Federal Reserve, Bank of England, Bank of Switzerland, Bank of Japan, Bank of France, and several other major central banks announced an agreement to lower the rate at which they trade the US dollar. This was unexpected in such a way as to lend credence to the report put out by Forbes just hours prior.

While some analysts have jumped on the agreement and attacked it as a “back-door bailout” for Europe, whose problems are only festering, it is really mathematically difficult to say how the Fed is using this particular agreement or its intended effect. Even if you had the PhD., no one would understand the explanation. This kind of balance sheet alchemy is exactly the practice that brought the world to its knees in 2008 with the creation of abstractions upon abstractions.

Gold has been performing quite nicely recently, up 1.8% in November and showing a 20% profit for the year. Long before the Fed decision price applied on Monday, December 5, the price of gold began a significant climb. The spot price edged up 0.3% to $1,751.59 per ounce, ending a week that saw a 4% gain in the price of gold.

The Fed announced its decision on Wednesday, and the gold price reacted mostly after that day, meaning the vast majority of that 4% increase actually occurred from Wednesday until Sunday. The reasons are becoming apparent why Goldman Sachs, Credit Suisse, and, most recently, Societe Generale have been advising their clientele that gold is positioned to perform quite well for the remainder of the fourth quarter and into 2012.

Generally speaking, the action of the Fed alone represents a furthering of the trend of increasing the money supply, though this time they’re being slightly more creative or devious about how they’re doing it. This is classically the best thing that could happen to gold and that explains why the gold market reacted to the decision as soon as it heard and before the lower swap rates actually applied. We will see the gold price rise, but it is possible that due to the nature of the intervention there will be periods of slightly lower prices that will serve well as buying opportunities. This fiscal stimulus will benefit gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 2, 2011 - Kyle Bass of Hayman Capital Management is preparing for a scenario that foresees gold protecting assets and performing. Based on the historical price of gold, this is predictable and brings to bear Bass’s previous correct foretelling of the 2008 credit crunch and subsequent economic crisis. Bass is now predicting a wave of hard is defaults is coming and, this time, people are listening. One of the main tactics Bass has used to hedge his client’s funds is investing in gold, a method he intends on continuing with greater intensity as we go forward.

Bass is an interesting commentator who has a very clear way with words. He also has a way of picking out the countries that have debt issues that will affect the American markets. Right now, he’s convinced Japan has, sadly, gone off the cliff and will not be coming back. When asked about Germany solving the European sovereign debt crisis, Bass actually laughed. “There is no savior large enough with a magical pool of capital to stave off this unfortunate conclusion to the global debt super cycle.”

To a financial sector that has literally run amok, Bass has often taken seemingly illogical positions. This has earned him some of the harshest criticism and the best returns in the past three years. The second-largest US academic endowment, following the recommendation of Bass, took delivery of $1 billion of gold bars. “Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said.

And that’s generally the point. The prices of goods and services change with each dollar the Federal Reserve prints. And do they know how to print. With the Fed decision, complicit with major banks, this week to lower swap rates, the value of the US dollar will be affected and will be affected in an inflationary way. The best tactic to take in this kind of environment is to hedge, bet, and hedge your bets.

Gold fits the definition perfectly. It’s a way to hedge your wealth, make an informed bet that the nominal price of gold will continue to increase, and it has an inherent value that will always store worth. Taking physical delivery of gold is just a further step in this direction, as Bass recommended to the University of Texas. The historical price of gold backs up Bass’s forecast.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 30, 2011 - The one sure winner in any bailout scenario is the price of gold. One of the only asset increases we’ve had since government bailouts, fiscal stimulus, and other monetary intervention started is in the price of gold. Today the Bank of Canada, Bank of England, Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank announced coordinated actions to lower the pricing on existing US dollar liquidity. Translated, this is a multilateral action to make the dollar less powerful in order to keep it circulating.

In effect, this is a bailout, except it is occurring on the balance sheets of some of the biggest, most powerful, and most venerated banks in the world. Instead of actually giving money to particular institutions or governments, these banks have simply decided to change the value of the dollar on their own. This would be slightly less troubling if the monetary policy banks have taken in previous years had succeeded in doing what banks promised they would do. Or if economic conditions had improved for average Americans.

One thing the fiscal policy in the United States has certainly done has increased the price of gold. A decade in which gold has seen a 600% increase has also seen a lot of monetary intervention. The two are inseparable, despite the divide between paper and physical assets. This stimulus will be no different. When it is applied on December 5, 2011, we will see coincident rises in the price of gold.

Perhaps this is the reason Societe Generale, a major French banking institution that has been on the rocks with Greek debt, has blatantly told its customers and clientele: “Buy gold ahead of QE3 as money creation has a strong impact on [gold] prices.” This came out only this week, and clearly Societe Generale has a very sensitive finger on the monetary policy in Europe. What these major banking institutions have chosen to do is, in effect, money creation. It may not be labeled QE3, but the effect is intended to be the same.

However, as has become far too true, the only effect we can count on with this action by the most powerful banks of the world will a rise in the price of gold. Societe Generale is a bank on the brink, and it was a wonder why they were being so honest with their customers. We now know why. Buy gold before the banks pricing applies on December 5, 2011.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 28, 2011 - What does the historical price of gold tell us about the future? Quietly, banks have managed to increase the total outstanding derivatives in existence by a record $107 trillion in six months. This is yet another sign that finance has gotten completely out of control and the only winner in this market will be a real, tangible commodity: gold. Derivatives and the over-leveraging of debt by banks are widely regarded as the poor foothold that got the country into the current economic crisis. Why banks are currently repeating the mistakes of a particularly bad past is beyond understanding. Gold shines right now as the best and only place to put your money.

The numbers are literally mind-boggling, especially when you consider that over $100 trillion of these worthless financial abstractions have only served to keep the economy treading water in the past months. They have not brought about any meaningful growth in any sector. Even finance is now cutting jobs. The total number of OTC outstanding derivatives, as was reported to the Bank of International Settlements, clocks in at just over $707.5 trillion dollars. That’s a lot of zeroes. To put this number in perspective, there were only $673 trillion worth of financial derivatives in existence in June of 2008.

Global GDP, or the amount of money made by the entire world in a given year, stands at $63 trillion. With the cooperation of the entire globe, we could work off all the derivatives in 11.2 years. Why are banks pursuing this kamikaze course of action? It is very possible that in order to keep the market from collapsing in on itself, banks needed to sell these astronomical numbers. Collecting recurring or upfront premium to qualify current models for a certain grade of future derivative cash flow overrode any sense of caution banks had.

If you look at the historical price of gold, it really began its rise about ten years ago. This was coincident with the viral increase in derivatives. Interestingly, the financial term “derivative” actually means that there is no independent value—the value is derived. In other words, the system of exchange has been debased by the influx of an astonishing amount of worthless bets. Eventually, it will catch up to the market, and the selling action of banks indicates that moment is getting closer. When a system debases a means of exchange, gold has always benefitted as the primary real store of wealth. The historical rise in the price of gold indicates that financial derivatives in current times do precisely that. In terms of where the price of gold can go, we have a good idea based on its performance and we now know we ain’t seen nothing yet.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 25, 2011 - News is out today that the Russian Central Bank made a significant purchase of gold in October, taking advantage of the best gold prices that followed the September correction. The current price of gold is lagging behind market analyst’s projections, but the reasons for it are more technical than fundamental. The euro is still losing against the dollar due to the debt crisis and that has been hammering the price of gold, though it has eased off a bit. The cycle of the options expiration usually indicates a slightly less movement at this time of the month and the markets have had a pretty violent week, to which the gold market had a little trouble reacting rationally.

Despite the relative suppression of the price of gold, central banks have been net buyers of gold for over two years and their buying has recently broken forty-year highs. We know this in spite of the fact that central banks rarely disclose any changes in their gold holdings or purchases. The news that central banks around the world swooped in after September’s downward action only came out in the last week. Central banks tend to be relatively secretive concerning their gold market activity.

Russia is boisterous by comparison. President Vladimir Putin very publicly endorsed a central bank decision in 2005 to diversify the Russian reserves out of fiat currencies and debt instruments and into gold bullion. Since then, Putin has been elected to the office of Prime Minister, his country’s economy has shown robust growth, and he is incredibly popular in his homeland.

Comparatively, the United States owns significantly higher amounts gold. It is estimated the US holds about 8,134 tons of gold, though this number is contested. There are only seven countries with central banks holding over 1,000 tons of gold and Russia is not one of those countries. But, the smart fiscal policy endorsed by Putin, who had several pictures taken of himself handling gold bullion in an extremely supportive manner, very decidedly signals that Russia will continue diversification from fiat into gold.

Russia bought 19.5 metric tons of gold in October, advancing their total gold reserves to 871.1 tons, according to the IMF. Central banks are some of the largest players in the global gold market and thus typically signal through their activities the direction of gold markets. Knowing that central banks, Russia including, swooped into the gold market after the September correction is an incredible indication of the future of the market. We may be witnessing the best gold prices now that we will see for a long time.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 24, 2011 - While Americans enjoy the bounty of friends and family this Thanksgiving day, it is worth noting that lately it has not been a cut and dry matter to understand today’s gold price. While gold is a tangible commodity and it has an inherent value and always will, the factors that go into determining its market price can be multi-layered and can include the involvement of governments in far off places. As such, today’s price of gold takes a little consideration if you need to understand it fully.

Given that gold is up 19.3 percent on the year while the S&P is down 7.5 percent, it is not always necessary to go deep into the fundamentals of the price of gold to understand that it is a good buy now. But, it is helpful in making the right decision and very interesting for students of the market.

Right now today’s gold price is acting a little inversely to the behavior of the markets. The Dow and other major indices in the US ended another dismal day on Wednesday. This was foretold last week on Thursday, when stocks were down nearly three hundred points. With no outside intervention of any kind, gold would pop in this kind of environment. Gold and the market are not necessarily directly related, but if the markets really dive, as they have been, gold is often a direct beneficiary.

There are a number of factors that have been inhibiting that. One of the most important to understand is that the current trouble in the market originates in Europe and the euro. Because currency traders often move pretty deftly between the dollar and the euro, the dollar has been temporarily strengthened. Since the European problem is hitting Europe first, moneymen are moving to the dollar, which is strengthening it temporarily, and giving the appearance that gold is not advancing as much as it actually is.

Of course, that is a very temporary effect and actually provides more a buying opportunity in the gold market than anything else. Let there be an understanding, the sovereign debt crisis in Europe has not been remedied and will cause further banking problems in the United States. Today’s price of gold is being suppressed to an extent by activity in the markets, but in time the price of gold will definitely show a benefit.

As you enjoy this holiday, consider the future. Today’s gold price may give you the best opportunity to protect it.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 23, 2011 - By all simple standards of measurement, the price of gold should be soaring right now. True, the good money, gold, is up 21 percent year to date and has outperformed the S&P by 24 percent, but the European sovereign debt crisis and its effect on US banks should already have the price of gold in the stratosphere.

In an interlocking financial system, the effect of an event at one point in the network will definitely affect the entire network, but not in the same way and not at the same time. Right now more news about the European debt problem is leaking out as Moody’s warns France over its credit rating. We are discovering that Greek banks and French banks are pretty closely related. Without an equitable solution to the problem from inside the European Union, where bailouts are incredibly unpopular right now politically, American investors are having second and third thoughts about the strength and reliability of US banks and this is fueling the flight to gold.

This past week saw the failure of MF Global and Reuters is reporting that the $600 million worth of “missing” customer funds is actually more like $1.2 billion. Officials for MF Global have said clientele “may” see some of that money, but most Americans aren’t waiting. The failure of a major US bank and the inability of that bank to give its customers their funds is ringing pretty loud to investors who are moving their money to higher ground.

The highest ground is gold. There’s no better place to keep your money safe from the grubbing hands of bankers. So why hasn’t the price of gold skyrocketed? After all, gold is the best performing asset of the past twelve months and has gained 600 percent in the decade.

For the time being, one of the best answers is the strength of the US dollar. As there is doubt in Europe, there is doubt in the Euro and typically currency traders are either on the side of the Euro or the Dollar. If one goes down, the other typically rises. This will temporarily suppress the price of gold in US dollars as currency trader flee the Euro for the Dollar.

The historical price of gold in economic and political crises has always skyrocketed. The only difference now would be the way the financial institutions are interconnected and spread out across the globe. Gold will rise in value compared to the US dollar as the network balances itself out. This makes the current an opportune moment to take advantage of the historical price of gold as the dollar buys more gold now.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 22, 2011 - It’s not a secret that the gold price today is heavily dependent on developments in foreign markets. However, getting good and accurate news about what is happening in foreign markets and how it is going to be affecting prices in the United States takes some pluck.

True, there is a sovereign debt crisis in Europe, which you’ve probably heard about, and exposure to the toxic debt is absolutely pervasive in the American banks. This exposure is leading the banks to continue buying gold to offset the bad bets they’ve made in Europe. Additionally, central banks are net buyers of gold and purchased more gold in the third quarter of this year than in any quarter since the end of Bretton Woods in 1971. Clearly, this all leads one to an educated understanding that the price of gold will remain fairly stable around current values and gold has the potential to gain dramatically.

However, there are other, more technical analyses that really make the price of gold pop. Few people know that Chinese banks have begun offering deposits in silver and have been offering deposits in gold for a few years. Upon deposit, customer’s money is immediately converted into gold and silver and is held by the banks.

China’s thirst for gold and silver is barely understood in popular American culture. Precious metals have an historical place in the Chinese culture as a store of wealth and as wealth itself. The Chinese market place is larger than the American market on the order of magnitudes. The domestic automobile market in China is twice the size of the automobile market in the United States, for comparison.

The Chinese banks have taken the incorporation of gold and silver as a part of its people’s savings a few steps further than we have yet in the United States. The percentage of Chinese who own gold is comparatively much higher, considering the historical importance of gold in the culture. Also, the market itself is extremely large and robust compared to the US market. These are all very strong and very real indicators that the gold price today reflects the beginning of the curve. The markets are all situated and prepared for the gold price to rise much higher than it is today.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 21, 2011 - With a European debt crisis melting down, banking crises in the US, and central banks responding by purchasing gold, one has to ask why the gold price hasn’t skyrocketed yet? Actually, contrary to where logic would place the prices of precious metals, there was a decline on Friday in gold and silver that began around noon and took $1.50 off the price of silver and $42.30 in the price of gold.

This comes as reports are surfacing that central banks bought more gold in the third quarter of this year than they have since Bretton Woods, forty years ago. Following the September correction, central banks around the world began a literal gold rush, taking advantage of the low price to diversify their portfolios. Though central banks are one of the most important indicators in the price of gold, they rarely disclose their actual change in holdings, so the purchase of gold by central banks does not have a direct and real time impact on the spot price of gold.

However, a continuing European debt crisis, the Federal Reserve surpassing GDP with $15 trillion in deficit, and net central bank buying should all indicate a much high price in gold that what is currently asked in the market today. Gold opened Monday at $1,723.20, up $189, or 10.96 per cent, from the low in September, but given that central banks could purchase as much as 500 tons in the month of September alone, the spot price of gold does not seem to accurately reflect the value of gold in the market place right now.

It is perhaps telling that central banks are buying gold at levels not seen since Bretton Woods. That period effectively ended in 1971 when Nixon took the US dollar off the gold standard, making it a totally fiat currency. As banks grapple with uncertainty in their balance sheets and the US government grapples with a $15 trillion deficit, central banks are returning to good money in droves.

The spot price, however, will take a little time to catch up to the trend. It is expected that the gold buying of the third quarter will continue and possibly be surpassed by gold buying in the fourth quarter. Make no mistake about it; the current spot price of gold reflects an undervalued asset that has already made the third quarter historic. The gold price right now is a tremendous opportunity and advantage we will recognize after the fourth quarter.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 18, 2011 - There is a liquidity problem in the markets that is having an effect on gold prices. In a climate eerily similar to recent history, there is a liquidity lock up in US dollars that reflect multi-year extremes. The dollar funding market reflects the levels experienced prior to the Lehman collapse. Finding liquid cash in such a climate is forcing some investors to sell gold.

The best performing asset year to date is gold. Credit Suisse and Goldman Sachs have advised their clients that low interest rates and negative interest rates will keep the price of gold climbing into 2012. The only reason to sell right now is a desperate need for cash when there’s no cash to be had anywhere but in gold.

As the European crisis continues to unravel, more and more Americans are being forced to fork over the cash. Investment in European sovereign debt was pretty standard across the board and all types and kinds of institutions are exposed. As those investments go bad, there’s a drain on the good money.

It’s a case in point that we are seeing precisely the kind of action that the precious metals embody. When paper debt goes bad, people flee to the real, the tangible. The same is true of banks and governments. After the paper burns, the gold is still good.

The real trick is knowing that before the problems occur and recognizing slight shifts in between as bumps in the road. Some investors might try to point to the September correction as a reason to avoid gold, but I would easily counter that September is just one month out of twelve and that gold is still up 22% year to date. And anyone who considers America’s money woes to be over should reexamine the problem in Europe.

If the only investors getting out of gold are doing so to cover other positions, the signal is get in and stay in. Gold is the only sensible and sound money to be had anywhere right now. That’s the reason why it’s performed so well in the last years and the reason why individuals and institutions flock to it the moment paper debt fails. There is no better money

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 17, 2011 - As the Greek and Italian Prime Ministers both step down this week, it is now being reports that European demand for gold skyrocketed 135% in Q3 of this year. The troubles associated with the Greek debt crisis are very well known and publicized, though the conclusion is far from foreseeable. However, Italy’s fiscal problems have largely been out of the press besides the troubled Italian bank UniCredit, which is one of the most heavily involved in Greek debt.

The creeping problems in the European Union really kicked off last spring with riots in Athens as austerity measures came onto the scene and now with the Q3 numbers out we see the expected results. Investors have wisely chosen to move their money safely out of the embattled European banking establishment and into the safety and promise of gold.

Sadly, things have gotten much worse for Greece since spring and despite a bailout from Germany there is still a very real danger Greece will default. The situation in Athens is such that a reporter for the Telegraph has detailed the city at a standstill where a hit of crack can be purchased by former workers for 5 Euros, the homeless line every doorway, and anyone with the ability or the tenacity to leave already has.

It’s difficult to see, at this point, how Greece will effectively deal with its sovereign debt problem. Papandreou’s resignation is a signal in itself. However, we have seen how investors will react. It is highly unlikely there will be a total jubilee in the European Union in the next six months. If the problems of the last six months have led to a 135% increase in demand for gold, gold is a pretty sure bet in the future.

The investment demand in Europe is strongly tied to investment demand in the US. We are all affected by it, though not every investor in the US is motivated as strongly as those who know the problems in Athens firsthand. But those who see how Europe has been affected by its debt problems and how investors have responded by buying gold are thus forewarned and forearmed as to how to protect themselves and prosper. More debt problems in Europe or elsewhere signal more demand for buying gold now.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 16, 2011 - Best demonstrating the price of gold, Bart Chilton, the Democratic Commissioner at the Commodity Futures Trading Commission, has come out and said that “something nefarious” occurred at MF Global. The very same CFTC made it legal and proper for MF Global to use customer funds for investments that ultimately led to a $63 billion bad bet on European sovereign debt.

For a bank that has about $600 million of its customer’s money currently missing, one would have to agree with Mr. Chilton’s evaluation. Keeping in mind that MF Global is the bank which employed Jon Corzine, Governor of New Jersey, one has to ask why they were allowed to misuse customer funds in such a way.

The answer lies in the tragically standard procedure of chasing diminishing returns. Bankers are continuing to make more and more outrageous bets trying to simulate the returns of a few years ago. After all, they’re not accountable to the public at large, only their bosses. In order to make the bets banks are currently making, they now must use customer’s money held in accounts.

Legally, this is known as commingling and is regarded as one of the worst operating practices a business can employ. But bankers are being forced to do it or they would not be able to fund the bets they’re making. This practice is, and was, generally unnoticed until a bank makes a bad bet. Such is exactly the case with MF Global. Now that the bad bet has been made and the bank has failed, customers are asking why this was allowed to happen.

They’re also asking whether they’ll ever recoup the full value of their accounts.

The price of gold is relatively high these days. But, considering what banks are openly and legally doing with their customers money, the price of gold is a steal for the smart investor interested in preserving their worth and savings. The real price of gold is the stability and serenity that accompanies knowing your money is out of the reach of bankers.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 15, 2011 - With demand for gold ranging around 50% more and the price of gold up 25% year to date in US dollars, today’s gold prices reflect workers and savers desire for sound money. This is purely logical at a time when the global credit crisis, monetary inflation programs, and the European debt crisis are creating doubt in the markets and fiscal policy is creating doubts in bank’s balance sheets.

A recent report detailed that savers in Britain have been robbed, through inflation, of $43 billion since the beginning of the crisis. Hard working savers who trusted in their banks saw the purchasing power of their money dwindle steadily. When we consider that Britain has not had anywhere near the level of monetary intervention that we have experienced in the United States, the safety and strength of American worker’s savings are brought into question.

The low interest rates on savings are only partially accountable for the way the market has been treating savers. Banks themselves have been using their customer’s funds to further depreciate its buying power. Forbes recently reported that MF Global used customer funds to finance a $6.3 billion bad bet on European sovereign debt. This was made not only possible but legal through a CFTC ruling that specifically allowed for the use of customer funds to finance trades and allows banks to retain any profit or interest resulting.

It might be a good idea if those bets actually made a profit. But, as with the real estate bets of a few years ago, bets on European debt turned out to be an albatross around the neck of those who made them. The losses get passed on to the customer of the banks instead of assumed by those who made the bets, adding insult to injury.

In this investing climate, more people are making the smart and clear choice to move into gold. With an inherent value, gold is the historical store of wealth and has been respected for thousands of years as such. Bankers can’t water down the gold you purchase and own, but they can and certainly do water down the purchasing power of your money. Gold is free and clear of the risky bank bets, financial regulations, and monetary inflation and today’s gold prices reflect that.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 14, 2011 - Goldman Sachs, one of the most celebrated investment banks in the United States, has put out an extremely positive forecast for the performance of current gold prices. After three positive weeks of gains in the gold markets and 1.8% gain last week, Goldman is still predicting a bright future for the yellow metal in house and to its clients.

While the European debt crisis is generally acknowledged to have an influence on the current price of gold, no one can predict exactly how and when that chain of events will play out, thus making it extremely difficult to plan on it one way or another. This has already wreaked havoc in the markets with the spot price of gold being the main beneficiary.

However, Goldman is citing a much more predictable chain of events for its projection. “We expect gold prices to continue to climb in 2011 given the current low level of US real interest rates.” Interest rates in the United States indicate not only the possibility but the near necessity for an increase in the price of gold through the end of the year and Goldman recommends near-dated hedges through 2012.

With the current spot price of gold reflecting a 25% year to date increase in US dollars, gold has already been one of the best, if not the best, investments of the past twelve months. But Goldman Sachs’ report sets aside any notion and allays any concern that growth in gold will stagnate in the coming months. Real US interest rates are reliable indicators for the progression of the markets’ treatment of gold.

Goldman is not alone in this perception and prediction, either. Credit Suisse is also extremely bullish on the price of gold and has advised that negative real interest rates will act as a “key driver” for the price of gold to pass the $1,800 mark. And Credit Suisse believes this move will occur within the coming days.

Goldman itself remains very invested in commodities and the investment bank has said it will roll over its December 11 long to December 12, indicating its commitment to a gain in the price of gold through the New Year.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 11, 2011 - This veteran’s day, the market shifts another few hundred points, this time to the upside, on more news out of Europe concerning the Greek debt crisis and its cousin in Italy. At this point, the market has thankfully recovered what it lost in Wednesday’s session, but still indicates extreme instability. I often think of American veterans as deserving more and better. The first thing I did this morning was call a veteran I graduated with who is lucky enough to own some gold.

He’s lucky because the market is not acting independently of the European crisis yet and this is reflected in the price of gold and in the currency markets. The dollar is down in foreign exchange markets and the spot price of gold is up even while the Dow surges. For me as an investor, this is not entirely disconcerting, but is far from reassuring.

The strength of the dollar is still in question globally. The IMF warned in the past hours what we have known all along. The developed world may fall back into recession. It said recovery remains in low gear in advanced economies the risk of slipping back is elevated.

This is reflected in the price of gold, which has retraced over 60% from the September lows. As the world sickens from the European crisis and economic recovery lingers just out of reach, more and more people, including my buddy who has taken nine tours, are moving toward the strength and reliability we see in gold. Price trends show more trust in that market right now than can be found in any market. Gold prices are still acting sanely while the rest of the world flies off the handle.

That’s very reassuring to any investor, whether you’re already in for the long haul or you’re looking to get in now. When my buddy came back last time from overseas, he knew had to protect himself and his young family. One of the best ways he chose to do that was by investing in gold. Gold has never let him down.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 10, 2011 - In today’s economy it’s nearly impossible to say that anyone is winning when it comes to money, that is, until looking at the market’s daily gold prices. While Europe’s markets crash and protestors occupy the streets of Wall Street, gold continues to be a strong investment in portfolios everywhere. Money and currency is becoming a point of contention everywhere, causing riots and debates, but the daily price of gold continues growing and earning early adapting investors a big return on their investment.

Just this week Goldstrike Resources Ltd. in Vancouver announced that they discovered a viable gold ore on their property. They found the ore on accident and the gold was hidden inside of the ore with an amazing 159.5 grams of gold inside. Employees of Goldstrike went on to search the premises for more gold, it was a modern day Gold Rush because the daily price of gold continues to go up and people want to get their hands on the precious metal in order to sell the gold.

Gold has proven to be a lasting and powerful source of income and wealth. The US government is currently under attack by citizens who feel there is an unequal distribution of wealth in the country, these people have occupied cities and are claiming that the middle class is largely being ignored by the government. The history of currency itself is rocky. The value of the US dollar is declining around the world, meanwhile the daily gold price continues to be steady. People speculate that the dollar will inevitably fail and a new currency will have to take its place. Because the daily price of gold is strong and steady, those with investments in gold and silver will not lose their assets and have something to fall back on as the economy continues to decline. In 1971, Roosevelt separated the gold market from currency, thus causing a separate market that exists on its own and continue to prosper as the economy spirals downward.

Some speculate that the daily gold price will drop and the gold market will follow the same pattern that the economy follows and end up with an ‘Occupy Wall Street’ situation. The truth of the matter is that while daily gold prices differ and waiver a bit, they recover much more quickly than normal stocks do. When stocks crash, people go into frenzy and make impulse decisions that only further destruct the market. People attempt to try and take advantage of the opportunity of a low cost and cause the market to be flooded. With gold markets, buyers and sellers are more calm and do not saturate the market to a point where it becomes vulnerable.

Daily gold prices are proof that the gold market is healthy and that gold is a sustainable investment. The gold market will not fall into a bad pattern and become another place where protestors occupy streets or where currency becomes just a piece of paper, gold will always hold its value.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 7, 2011 - While many investors hunt the best price to buy gold, Goldstrike Resources Ltd. In Vancouver, British Columbia has a mine of their own. Goldstrike announced November 7, 2011 of their discovery of viable gold ore on their Plateau South property. Found by accident in a sample of sandstone, the gold was hidden inside and measured at an astounding 159.5 grams per tonne. From that instant it was a rush by Goldstrike associates to scour the entire 3.5 kilometers owned by the company to see how much gold is actually available.

So far, Goldstrike has uncovered viable resources in 2.5 out of the 3.5 kilometers of property. The prospecting team is led by Tom Morgan, Goldstrike’s in-house prospector. Morgan has discovered these gold deposits within bleached sandstone. Within a 1.5 kilometer area, Morgan uncovered three samples at 100 parts per billion. After sifting through the remaining soil samples, Goldstrike Resources claims the remaining rock, sand and silt uncovered below 17.1 parts per billion. In total, Goldstrike has sifted through 49 soil samples, 56 sandstone rock samples and 7 silt samples on the Plateau southern property. Goldstrike still has assays remaining on 49 more soil samples, 32 rock samples, 7 silts and an additional 1 soil sample to conclude the total amount of gold found within the Plateau’s 3.5 kilometers.

The Geological Survey of Canada began taking silt samples from the two creek beds in the surrounding area and has uncovered sediments of anomalous gold and arsenic deposits.

Goldstrike Resources has begun utilizing new technology by correlating alternation maps with satellites, regional geochemical data, geology and favorable structure to locate additional gold mines within the area of the Plateau South, Plateau East, Plateau West and Plateau North properties, which will total 154 square kilometers of possible gold mine opportunities. For Goldstrike, the option to buy gold is out and the chance to mine their own is in.

Though it is a modern-day gold strike, the property is solely owned by Goldstrike Resources. Potential prospectors have headed to the surrounding areas of the company’s property and skipped the option to buy gold, as well as the Geological Survey of Canada in hopes of finding gold outside of the Goldstrike property.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 03, 2011 – One pundit proclaims “Current gold prices are positive proof of a bubble about to burst.” Another asks, “Is gold in a bubble?” A third chimes in, “Gold can’t possibly be in a bubble.”

So it goes day after day after day. While it is amusing fodder for us gluttons for punishment, all the talk has the average Joe so confused he doesn’t know what to believe. Which, I believe, is exactly what the boys in Brooks Brothers suits want.

The gold price bubble is Wall Street’s version of terrorism fear mongering. Just saying the word invokes the sort of fear that makes investors curl up in a ball, tearfully clutching their 401Ks to their chest. Just like the government bandies the word terrorism to get anything it wants.

It works because Joe doesn’t have a clue what either really means. He just knows they are very bad and they are out to get him. So he gives carte blanche to his protectors, trusting them to keep him safe. Wake up and smell the coffee, Joe.

A Market Watch video clip proposes a different way of looking at the gold price bubble nonsense – start with a real bubble and see how gold compares to that. The logical choice, of course, is the dot-com bubble of the 1990s.

That is the root of today’s bubble-phobia, and those wounds have yet to heal. When you overlay the trajectories of the past 10 years of gold prices and the dot-com decade you can instantly see they are worlds apart.

If the gold price were following the dot-com template it would be at $3,200 today and picking up steam. Even more important, gold’s market correction mechanism appears to be running smoothly, unlike NASDAQ at the peak of the dot-com debacle.

The first 10% drop in the NASDAQ was met not by a selloff but by a surge of buying as investor clamored to take advantage of the “buying opportunity.” Prices shot up one last time before the crash.

When the gold price broke $1,900 it quickly fell back 10% as well. While some of us did call it a buying opportunity (I’ll stick to my guns here. In a year that’s exactly what it will look like.), the gold market its house in order and got back down to business.

The gold market is healthy. It’s Wall Street and fiat money that are up to their ears in muck. It’s time to put the gold price bubble palaver to rest and concentrate on the real threats to our wellbeing.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 1, 2011 - Paramount gold prices are within sight and in high gear. We have already experienced its downturn. We have tasted the $1620 level and loved it. The skyward inclination has been safeguarded and should move forward in a commanding torrent with only one way to go…up.

A statement from London traders has placed the Chinese at the front threshold of the physical market. Market meddling was intruded upon by China as the gold contract margins were piggybacked numerous times throughout the price ebbing. Apparently, it was a show that has now culminated.

Whereas the price was establishing a flat bottom near the $1600 level it is clear that an upbeat deviation is at the forefront. An about-face is prevailing which mirrors the one in the Euro currency from 132 up to 140. Gold had piggybacked the Euro slump but is now moving upward because of the incessant uncertainty within the Eurozone. We are only talking about a discrepancy of one hundred points from $1670 to $1770 which should be satisfied quite rapidly and in a snap. It will be the gold cynics who will be obligated to respond as to why they backed the wrong currency and aided in the losses of the one and only real security within the monetary system. Gold and silver will enjoy reigning once again.

The craziness within Europe is what accommodated the $50 hike in gold price this past Tuesday with bankers, politicians, and commissioners not being able to resolve their monetary insolvencies. This is all good, though, for gold prices. Euro banks should benefit from a $2 trillion filled fund which will have tremendous impact for gold. Remarkable leverage seems to be the only way to furnish volume of funding despite European objection of the Geithner concept of burdensome leverage practice. Bank catastrophes will begin if the Euro banks fall short of securing funding with an inability to recapitalize. London and New York will also receive their share of the fiasco. The disaster would strengthen to a new treacherous level that conveys discussion of complete catastrophe from banking system breakdown, which will be fantastic for gold. Hopefully, you are one who acts upon solidity and will be part of the true uprising because we are really at the border of a hair-raising turnaround that will hike gold prices to unimaginable levels.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 31, 2011 – If ever there were an apt analogy for current gold prices it is “trick or treat.” Just as Japan jumped in to devalue the yen, which had risen to its highest level against the dollar since the end of WWII, the price of gold took a dive in Hong Kong.

The world in general seems incapable of grasping the simple fact that fiat money has absolutely no connection with wealth. So the yen falls, the dollar rises, and the gold price, which per force is valued in dollars, must fall. At least so the story goes. But why?

What in those technical machinations makes gold worth any less, or for that matter, any more, than it did yesterday? Regardless of how convoluted the logic in economic theory may be, the answer is clearly “nothing.” But for the most part global economics is totally divorced from reality and weighs value in terms of currency rather than gold.

This week the Japanese devalue their currency, giving them an edge in global trade. Next week Europe could retaliate by devaluing the euro or we could devalue the dollar. It doesn’t matter one whit whose turn it in this insane game of tag, the end result is that everybody loses.

For those who remember the glory days of gas wars, it was wonderful for us consumers to be able to buy gasoline far below market but it proved to be totally unsustainable for the retailers. The simple truth is that you cannot underprice your product for long and remain viable.

Fiat monies have been vying for leadership by those practices far beyond any hope of sustained viability. Through it all, hard money has just ridden the waves.

All one needs to separate the real from the conjectured is a sense of value. Value doesn’t change on a whim, it doesn’t change on a single reversal in some indicator, and it doesn’t change on some central bank’s initiative. Value transcends all governments, cultures, and politics.

Value has forever been defined by gold. When governments try to trick investors by disguising the value of their fiat monies, treat yourself to investments at artificially low gold prices.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 28, 2011 – Why on Earth would the gold price keep climbing when the media is all abuzz with glad tidings? After two strong days of trading under Wall Street’s belt ABC News all but declared the phoenix has risen from the ashes.

Happy days are here again! Never mind that consumer confidence fell 13.5% in October. They’re just whining because new home sales dropped for the third month in a row.

Never mind the unemployment problem. Our economy is now surging at a jaw-dropping 2.5% pace and it won’t be long – three or four years, maybe 10, whatever – and that problem will be history.

Never mind that our politicians can’t stop grandstanding long enough to do anything about the deficit. Or that there is seven times more currency floating about than there is gold to back it up.

None of that stuff matters any more. Europe has solved all of its problems. For just the 14th time in under two years a European economic summit has announced that a breakthrough agreement has been reached. The suits would be dancing on the Street if those darned protestors weren’t clogging it up.

Never mind that none of the previous summits ever produced any lasting action that amounted to a hill of beans. This time it’s different. They have pulled the world back from the brink of economic disaster.

So why isn’t the gold price falling? It’s hard to say, but here’s a couple of thoughts.

Every rescue plan ever conceived by central banks has taken lots of new funny money. As the heap of paper grows ever higher, the threat of serious inflation grows right along with it. Maybe that threat is drawing traditional investors back to gold.

It also could be something quite unrelated to economics. People are sick and tired of the whole mess and maybe the approaching holidays give them an excuse to partake of a much needed tonic. As Tom Lehrer said, “angels we have heard on high, telling us go out and buy.” Buy Stocks. Buy Gold. Buy anything and everything MasterCard will allow and worry about paying for it tomorrow. Just like the central banks.

Or possibly people have just had enough of the hype. Maybe trumpeting equities’ best October in God knows how long isn’t convincing anyone that the rollercoaster ride is over. Maybe we’re all still a bit too queasy to celebrate.

From time to time we will experience periods that look like recovery is underway, but the underlying problems created by the fiat money system will make sure they don’t last.

Gold will either fix those problems or allow people to survive them. Either way, that’s what will keep driving up gold prices far into the future.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 27, 2011 - Brief analysis of currency markets:

• Within the long-term Euro Index chart, the index level has boomeranged off the resistance line, drifting down to the support level and then jerking up to resistance. Currently it stands at the descending long-term resistance line, which is in accordance with the 61.8% Fibonacci retracement level. This merge occurred during the week and is probably the reason which controlled the index from a greater rally.
• Shifting above the resistance level and freezing for more than three days will probably provoke more elevated index levels with a target roughly about143. At this point, the euro is likely to continue its rally. We are in a state of apprehension. Backsliding now would prove the breakdown and progression would cancel out the breakdown. The bottom line is that we wait and see where this will go which will also, ultimately, guide us towards the outcome of the chaotic currency situation.

Bear in mind that the current turnaround after a bullish-hammer-candlestick-pattern corresponding accurately with the Fibonacci retracement level was no twist of fate.

Examining the implications for the dollar and for the gold price as we compare them side-by-side, the correlation between today and late 2009 played out extremely well, as a drop in the dollar was simultaneous with an increase in the price of gold.

And, now, what happens?

The currency markets are under heavy stress, in particular the euro, and this whole state of affairs is very unclear. The Eurozone pressures have attenuated to some extent this week and an upward motion for the euro seems to be approximately a 55-45 probability and would, in all likelihood, cause a cascade in the USD Index.

A shift in the Euro Index and a negative turn in the USD Index would have bullish significance for the gold price as well as precious metals overall. Indeed, it appears that the precious metals market is, at this moment in time, advancing despite a signal from currencies, meaning that if the indication comes, the rally could pick up the pace.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 26, 2011 – Determining the fair gold price is critical to investors, yet it is a daunting task. In a recent post on King World News James Turk proposed a very intriguing solution, one which he calls the Gold Money Index (GMI).

The GMI “values gold based on its historical role as international money,” Turk says. Specifically, Turk defines the fair gold price as the total foreign exchange reserves held by central banks divided by the banks’ total gold reserves.

Under the gold standard, growth of wealth alone determines the gold price. Currency is but a convenient way to keep tally. In a fiat system, however, the money supply is free to grow independent of the growth of wealth, and invariably it does so at an ever increasing pace.

Markets, however, can take imbalance for just so long. Wealth defined in fiat money is fleeting and illusory while wealth defined in gold has endured throughout history. The fair gold price is simply that at which the value of gold reserves is equal to the money supply.

Turk calculates gold’s relative valuation by dividing the actual price of gold by the fair price. In 1984, when the two were equal, gold’s valuation was 100%. The all time low valuation, 10.3%, which occurred in 2008. At the end of Q2 2011 the gold price was still only 13% of the fair price.

To put that another way, the gold price should be more than 7 1/2 times higher than it is today to balance the money supply with actual wealth. Markets work on wealth, not money. Value is only what two parties agree it to be. The more that wealth is diluted by wanton printing of paper with no promise of exchange, the less that paper is worth.

Market forces have encountered the strongest opposition ever, but never doubt that the market will prevail. To say that the gold price should be well over $10,000 per ounce is simply to say that currencies are unsustainably overvalued.

Debating how high the gold price should be, however, misses the point. Gold has been, and always will be, a standard measure of wealth. The important issue is not the undervaluation of gold, but the overvaluation of currency.

One thing is certain. Current gold prices are far, far below where the market wants to take them.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 24, 2011 – The gold price, or more to the point, the growth of gold’s purchasing power, has endured throughout history. In the 1970s Roy Jastram undertook an exhaustive study to quantify gold’s relative value over more than four centuries.

In 1977 Jastram released his findings in the seminal work, “The Golden Constant,” and they clearly prove gold to be effective, both as a hedge in periods of inflation, and as a means to preserve wealth in periods of deflation.

The data for the USA covers five distinct periods – three deflationary and two inflationary – from 1814 through 2007. For each period Jastram calculated the change in gold’s purchasing power and the change in the price of commodities. Compounding those changes over the entire span reveals a remarkable consistency.

According to Jastram’s data, the ratio in the growth of gold’s purchasing power to growth in commodity prices has cycled between roughly one and nine. That is, on average the gold price has grown at a rate some four and a half times that of commodities. And even when the cycle bottoms out, gold prices still keep pace.

Naturally the short-term picture is quite different. For instance, in the inflationary period from 1897 to 1920 gold’s purchasing power fell 70% while commodity prices shot up 232 %. But going into that period gold’s compounded growth had been 8.6 times that of commodities. By the end the ratio had fallen to nearly 1 to 1.

The following deflationary period lasting from 1920 to 1933 saw a complete reversal with gold’s purchasing power climbing 251% while commodities fell 6.9%. The compounded ratio once again peaked out at 9 to 1.

The next period was again inflationary and was still in progress when Jastram published his work, but Dan Ascani updated the data through the end of the period in 2007. While the purchasing power of gold experienced a healthy growth of 147% over that time, commodity prices sprinted ahead at nearly 10 times the pace. Once again the compounded ratio had fallen to about 1 to 1.

That is a most tantalizing indication of where the gold price is heading. Over four hundred years of data prove that gold’s purchasing power will endure regardless of what happens next. However, history suggests that much more is store over the next several years.

If the American cycle continues – and there is no reason to expect otherwise – growth in gold prices will soon enter a period of rapid acceleration, greatly increasing the purchasing power of gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 21, 2011 – The gold price would lose its upward pressure if only the Fed could wrestle the recession into submission. And they’d be making snowmen in Hades to boot.

Bernanke’s recent speech before the Federal Reserve Bank of Boston 56th Economic Conference is titled “The Effects of the Great Recession on Central Bank Doctrine and Practice.” Had it been presented by anyone else I might have dared to hope for a tad of contrition followed by lessons learned. With far more trepidation than anticipation I dove in.

The thick text is crammed with doublespeak, circular reasoning, and non sequiturs, as expected. The speech is little more than a rehash of Bernanke’s sedative rhetoric, but sprinkled about are some bona fide jaw-dropping head-scratchers.

“My guess,” Bernanke says, perhaps revealing a bit too much about how he reaches decisions, “is that the current framework for monetary policy … will remain the standard approach, as its benefits in terms of macroeconomic stabilization have been demonstrated.”

Mr. Bernanke, you see, still believes the monetary policy of endless credit leveraged by endless printing is fundamentally sound. The problem was that “financial stability policy was often viewed as the junior partner to monetary policy.” Having done so well with monetary policy, Bernanke concludes that the Fed need only amp up its “financial stability policy to co-equal status with monetary policy.”

More Fed meddling, that’s the ticket. But what the heck, “the distinction between macroeconomic and financial stability objectives will always be blurred to some extent.” The example Bernanke offers should send gold prices soaring:

“Monetary policy actions that improve the economic outlook also tend to improve the conditions of financial firms,” he begins, and I hit a speed bump. Apparently the main goal of financial stability policy is to make Wall Street bankers happy. I forge ahead.

“Actions to support the normal functioning of financial institutions and markets can help achieve the central bank's monetary policy objectives by improving credit flows and enhancing monetary policy transmission.” It’s too much for me. Bernanke still believes that he is smarter and more powerful than Mr. Market and that it is possible to borrow one’s way to prosperity.

In the words of Ron White, “you can’t fix stupid.” To which I add, stupid can’t fix the economy and stupid can’t hold down the price of gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 19, 2011 – It’s the sort of headline one would normally associate with the gold price. “Volatility is bad,” AP declares. But the article wasn’t about gold, it was talking about the Dow.

“The Dow rose or fell by triple digits 15 days in August and 16 in September,” the piece begins. “In October, it has done that eight days out of 11.” For comparison, such moves occurred just nine times in April and May combined.

Individual investors, still stinging from holding on under similar volatility in 2008, are getting out before being burned again. In July and August alone, they have pulled $60 billion out of stock mutual funds. They are gun shy, and wary of even the modest volatility in current gold prices.

Interestingly, investors aren’t being fooled by big gains in the Dow this time. Even the 5% rise in the week ending September 16 wasn’t enough to tempt them back in. They are out and intend to stay out until the market settles down long enough to restore their confidence.

In the meantime, companies across the spectrum are likewise withholding their initial public offerings (IPO), creating a record-breaking backlog of 215 pending offerings. The market’s unpredictability carries significant risk of their offering coinciding with a downside and greatly reducing their anticipated revenues.

The upshot is that 215 companies have put their expansion plans on hold, a move that further exacerbates the unemployment problem and puts even more strain on a weary economy. Under worsening economic conditions volatility in the stock market will persist, and probably grow more severe.

Individual investors have taken the first step to avoid a repeat of their mistakes of the recent past. Their next epiphany will be the realization that the billions pulled out of the stock market and held in cash is in equal jeopardy. That moment of clarity is inevitable, and it could happen any day.

With nowhere else to turn, they will exchange their greenbacks for gold and push the price of gold up to historic levels.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 17, 2011 – The gold price holding out against Wall Street’s relentless propaganda is a clear sign of things to come, but it is not alone. Never since the Vietnam War has passionate outrage erupted so spontaneously and universally, a warning to the government that it had better reassess its priorities.

It’s not the context of the protests that matters, although the status quo was quick to play upon their lack of cohesion. The importance lies in the growing willingness of Americans to mobilize on a national scale.

Thanks to all the concocted rhetoric bombarding them every day Americans are understandably confused and easily misled. Just by coming together, however, the truth is bound to sink in. When it does, it will no longer be possible to stifle their anger.

As it was in the 1960s, factions will coalesce and some will advocate violence to initiate reform. It takes very little to turn large passive gatherings into uncontrollable riots when passions run high. When the people demand to be heard and the government refuses to listen, the outcome is in nobody’s best interests.

The gold price has been trying to warn the status quo that the free market is poised for some serious housecleaning. As the people come to understand that the country’s problems are a product of government interference in the markets, they will move over to the free market’s side.

False patriotism is all that stands between Americans and revolution. But “my country right or wrong” is an attitude that has no place here. The right to hold our government accountable and to exert our will over it is the very thing that made America great.

We can’t afford to wait much longer to assert that right or things could easily spin out of control. But we are still too busy fighting among ourselves, exactly as the status quo would have it.

None-the-less, the free market is coming back and there is no stopping it. The only difference will be in how much pain we inflict on ourselves before accepting the fact.

As the free market reemerges, the price of gold will continue to be a sure sign of its progress.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 14, 2011 – Like a sleeping volcano, the tepid performance of the gold price lately gives no hint about the building mayhem just below the surface. Mayhem that can erupt without warning at any moment.

Chris Martenson in Seeking Alpha has good reason to believe that a crash is on the way. In fact, he says “the entire future from here onward will be marked by sharp plunges (both crashes and regular market declines), followed by periods of stability, if not apparent recovery.”

For Martenson “the key factor is not so much the amount of the decline, but the pace of the decline.” And it cannot be denied that lately things have been happening at a torrid pace.

The gravity of today’s economic problems cannot be understated. The structure of the market has been destabilized and soon only real money will be able to prevent it from crumbling to dust. The gold price will be meaningless because gold will once again be the predominant currency.

To illustrate, Martenson relays this ominous statement by Robert Shapiro, now an advisor to the IMF and formerly to Clinton and Obama, regarding the European sovereign debt crisis: “If they cannot address this in a credible way, I believe within perhaps two to three weeks, we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system … a crisis, in my view, more serious than the crisis in 2008.”

The message is clear: problems brewing in weaker sections of the global economy will spread very quickly into the stronger ones, like a pandemic. The Polish finance minister has warned of dire consequences looming with the breakup of the EU, noting that “historically monetary unions do not break up without civil war or some other form of authoritarian reaction … after all these political shocks, economic shocks, it is very rare indeed that in the next 10 years we could avoid a war.”

The warning signs are all around us and even usually calm voices are speaking up. We can expect growing volatility in the markets until sometime soon – no one can say for certain just when – a cataclysmic disruption will very likely occur.

The gold price will also have its ups and downs, some possibly severe, but there is no question that when the dust settles it will be gold that defines wealth.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 12, 2011 – If you really want to put the gold price in context you need almost a mystical perspective. Throughout history gold has consistently defined value, but on what basis? Gold bears are quick to say there is no foundation to the enduring value of gold, yet they are equally quick to say that they cannot explain why gold survives above all else as the standard of wealth.

Apparently there is something deeply embedded in our DNA that prizes gold. It certainly is not the rarest of elements, and compounds both natural and man-made are more than adequate substitutes in any significant application. Yet gold gives us a point of reference that extends back to the beginning of man and forward to the end of our reign.

It is that universal and timeless appeal that sets the gold price. When gold was currency it was easy to understand its value, but under a fiat money system the correlation is not so clear. Still, Rich Birecki uses that correlation in “Pop Goes The Gold Bubble,” posted in Seeking Alpha.

According to Birecki, the fact that the gold price has risen eleven-fold since 1977 while the price of his selected comparisons rose less than half as much proves that gold is in a bubble. What Birecki fails to acknowledge, however, is that the timeframe he has selected coincides with the advent of a fully fiat monetary system.

The life cycle of fiat currencies has been roughly 40 years throughout recorded history. What Birecki describes is actually the acceleration of currency devaluation towards the end of that cycle. Using Birecki’s figures, price increases strongly correlate to growth in household income. But our standing of living has been in decline for years, a fact that until recently was disguised by rapid inflation of the money supply.

In other words, the economy has failed to keep pace with gold. If Mr. Birecki were to repeat his analysis in another five or ten years, after real inflation has left its mark, he would reach a completely different conclusion.

It will be hard to claim the price of gold is in a bubble when a bushel of greenbacks won’t buy you a loaf of bread.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 10, 2011 – It’s nice to see the gold price moving in the right direction again, but I won’t be breaking out the party hats quite yet.

The big reason for the drop in the first place was a liquidity crunch and big money was unloading anything and everything it could to get badly needed cash. Now with Bernanke doing the Twist, the Bank of England poised for a round of quantitative easing to the tune of more than $100 billion, and rampant scuttlebutt about the IMF joining in the rescue of European banks, the squeeze seems to be over. Watch out for the ricochet.

The gold market should be about done cleaning house so it won’t be long before it resumes its trajectory. But the super bargain prices of late undoubtedly has caught the attention of fast buck investors, especially those who lost their shirts to the current drop (some folks never learn). That suggests to me that there is still some bumpy road ahead.

Stepping back to look at the macro picture, however, it is patently evident that everything contributing to the easing of the liquidity crunch is the polar opposite of what the global economy needs. We keep shooting ourselves in the foot. Now Obama has loaded the elephant gun and looks like he’s about to blow the foot clean off by starting a trade war with China.

Small wonder that optimism has become a pretty scarce commodity these days and desperation has settled over governments around the globe. Desperate people do stupid things, like the poor hick in western movies who puts up the deed to the ranch hoping to win back his seed money from the traveling card shark. Except the government isn’t play with its own money – it’s playing with ours.

Only when that realization really sinks in and everyday people as well as the managers of monster funds start buying gold for the right reasons will the gold price start climbing again in earnest. In the meantime, smart money is getting on board before all the seats are taken.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 07, 2011 – Amidst all of the recent market chaos a lot of people are wondering if the gold price will keep tumbling along with everything else. The short answer is it cannot.

There is a very interesting and important correlation between paper money and gold that has existed throughout history: in the long run the total value of every bit of fiat money in circulation will equal the value of available gold. That is why Ronald Reagan told Ron Paul that “no great nation that abandoned the gold standard has remained a great nation.”

Gold simply has a way of equalizing the rampant printing of money. Wealth cannot be created through debt, and every nation that has followed that course has fallen victim to the fallacy. In 1966, before he became entangled in the status quo, Alan Greenspan authored “Gold and Economic Freedom” in which he stated: “Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property right.”

Eventually, gold will do just that. But why isn’t it doing so right now? It started when Roosevelt seized private American gold at $20 per ounce and then immediately reevaluated it at $35 per ounce. Those profits, says Ron Paul in “End The Fed,” funded “the Exchange Stabilization Fund, which is … a slush fund hidden from the scrutiny of the Congress … [which] is still permitted to meddle in the gold market.”

For the near term, then, the Government is compelled to do anything and everything within its power to inflate the value of the dollar. But nothing governments do will change the inevitable course of history. No matter how much money the world’s central banks can manufacture, the total worth of global currencies will remain virtually constant.

In the end, the price of gold becomes irrelevant because it will always take all of the money in the world to buy all of the gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 5, 2011 - A new credit crunch is rapidly becoming apparent in the markets. The prevalent conditions remind many of the Crisis of 2008, and, admittedly, the sentiment is eerily similar. This time, however, it’s not a domestic banking conundrum that has investors in a tizzy; it’s news coming out of the trouble European Union. Greece does not have enough money to solve its financial problems and it has only begun signaling that is the case. Banks and countries exposed to bad Greek debt are spinning in a circle right now because of what may happen in a few days, months, or perhaps years.

If there is a major crisis and possibly even a default associated with Greece, it threatens to debase the Euro and undermine the European Union. Not a particularly helpful thing in a rehabilitating market, but there you have it. In reaction to this, banks everywhere are seizing up credit and drawing in the lines of liquidity by whatever ways they might to cover losses, hedge bets, and keep the house warm in winter.

For gold investing and gold prices, this can be a difficult message to decipher and consequently we’ve seen a lot of people misinterpret the market in the past month. Based on what I’ve just told you, keep in mind, the hype and hysteria has not been in the gold market; rather, it has been in other markets. As banks pull in the reins of credit, it depresses the futures markets and, voila, the spot price of gold.

Does this mean your money should be going elsewhere? Only if you want to bank on hype and think you can run faster than I can. Gold will outperform every other investment in the coming months and years as it has been the best performing asset of the past twelve months and every trader worth his salt knows it. It’s entirely possible the price of gold could decline in the near term, but if you understand the reasons why you understand the market and you are fearless. That’s when the good traders, and you, get in.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 4, 2011 - If you own gold and you someone asks what you’re worth, you feel pretty good about the answer. As the S&P loses 20% from its April peak and the world worries about Greece and listens to Ben Bernanke’s every little word, we consider the alternative. Far too often Americans get up, go to work, and by the time they’re finished with the working day, the market has shed two hundred or three hundred points and they’ve practically paid to go to work. Isn’t your time worth more than that?

Mine is. When I look at historical gold prices, I see an asset that has outperformed every stock since the nominal peak in 1999. When I look at the daily spot price (the price of gold today), I get a good feeling all over.

When you look at the price on your stocks, do you get that feeling?

John Brynjolfsson, former PIMCO fund manager, has recently stated that because the European Central Bank is so exposed to the Greek crisis, the ideal way to both preserve your assets and play the crisis is buying gold. Mohamed El-Erian, PIMCO’s current CEO, this week said, “I find gold striking,” and, “it’s a flashing yellow light.” Indeed, as the warning signals are going off in the Eurozone, gold is a beacon of peace, stability, and safety.

And now that the correction is over, there is much more limited possibility to the downside and the price of gold is right for buying. The current price of gold tells me that the market is set to perform well in the next few weeks. Current events tell me that gold is set to perform well in the next few years.

Take a look at the gold price chart and daily gold prices and you’ll see that gold is the most affordable it’s been in months. The time to get on the gold train is definitively here. Jim Rogers, legendary commodities trader, is still buying gold and silver. Marc Faber is buying now. Pierre Lassonde called the correction at 20 % and he runs a gold mine. Now is one of the best times we’ve recently seen to get into gold and gold is one of the best ways we’ve seen to preserve and grow your worth.

Take a gander at the historical gold price and you’ll see gold is the best performing asset of the past twelve months. Aren’t you worth the best performing asset of the past twelve months? I am.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

October 3, 2011 - Gold is up 1.77% as both oil and the Euro are down, acting as a safe haven for investors worried about exposure to Greece.

Gold continues to distinguish itself as the most trustworthy commodity on the market during uncertain times. As yet another hostage of the Greek crisis, oil slipped Monday to $101 a barrel for Brent crude. The Euro is also down in the currency markets amid fears of the Greek crisis. This morning the Euro fell to an 8½ month low against the dollar on the FOREX market.

Meanwhile, gold is performing very nicely. During intraday trading Monday, gold was up over $30. This is a signal that investors continue a flight to the safety of gold as the Greek problem unravels. This movement into gold is most likely to continue as Greece announced that it will miss the budget reduction targets set just months ago. This is an indicator that the steps taken to steer Greece clear of bankruptcy may not have been enough and further action, which is politically unattractive, will be required.

The world stock markets reflected the uncertainty over the Greek crisis today. US markets were down 1% in intraday trading, the FTSE was down over 1.9%, and China’s Hang Seng was down 4.4%.

The falling stocks, slipping oil, and losses in the Euro are driving investors to the safety and sanity of the gold market. Today’s gains are a symptom.

This nice rise in gold will continue as investors continue to seek a more stable haven.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

September 22, 2011 - One thing will not change: gold has and will continue to hold a very high regard as a world-wide representation of wealth. This has been true since the beginning of civilization since it was utilized to sustain the most primitive monetary banking structures.

Within this article we will try and look at gold’s appeal as well as why its prices have maintained an upward movement.

Because of gold’s consistent increase it has been correlated to past asset bubbles that have, ultimately, caved in. For example:

• The Dow Jones during the Great Depression
  • plummeted almost 90% between 1929-1932
• Japan’s Economic Bubble
  • Nikkei went under 80%
  • real estate regressed over 90% in the 1990s
• Dot.com Failure
  • NASDAQ stock lost almost 80% of its value between 2000-2002
• Housing in the United States
  • decrease of 30% since 2006

The question is whether gold is in a bubble or not. The concept of ‘bubble’ begins as an overlooked action and increases based on the ‘greater fool theory’. It begins with new buyers who jump on the bandwagon just because it’s moving without knowing why. In other words, prices increase so there must be something happening. They are under the impression that because of the rise in prices, they can eventually sell it later to someone willing to pay an even higher price- the greater fool. Examples are:

• Real estate turnarounds relied upon these fools.
• Investors who bought Internet stocks in 1999.

It has been said that gold is in bubble mode, but is the increase in price founded upon something more than untainted conjecture?

Let’s contemplate that interrogative:

1. Gold never rose up to its January 1980 inflation-adjusted high of about $2,400. Because of this, it seems there is room to rise.
2. The Fed is issuing money to cause inflation, thus shun deflation. This will have as its outcome high inflation and increasing commodity prices.
3. Remember that we cannot produce gold the same way we print money. Supply is limited and we just have to wait for it to be mined. Nothing else.
4. Europe’s economy is in turmoil and the U.S. is right behind.
5. $1.5 trillion of annual debt is what is sustaining the United States. This accounts for 10% of GDP. If we do the math, there hasn’t been GDP growth for the past four years. Unfortunately, 7,000,000 jobs are dependent upon that annual debt.
6. In 1933 and 1980, the ratio of the Dow to gold reached 1 to 1. Is parity coming again? The Dow is decreasing and gold’s prices are increasing…

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

September 19, 2011 – The gold price keeps getting kicked down with even the faintest bit of good news for equities, but what will happen if, as Jonathan Cheng says in the Wall Street Journal, “After a summer of denial, reality has caught up with Wall Street strategists?”

I suppose it would be wise to wait until after this week’s meeting of the Fed, but then again very few remain who believe that makes any difference. Adam Parker, chief US equity strategist at Morgan Stanley, thinks that his colleagues’ haven’t gone far enough with their downscaled forecasts for the S&P 500, which up until now have grossly misjudged the depth of the problems facing the economy.

“I don't think we've seen the lows of the year by any stretch,” Parker says. “Things have to get much worse before they get better.” Thank you Mr. Parker for stating the truth, for which I am sure you will be greatly derided. And thanks for having the ethical fortitude to tell your clients that “it's going to be cold in winter and that they need to wear a coat.”

That notwithstanding, Mr. Parker evades the greater issue of what lies ahead and leaves us with a sense that while hard times are upon us, we can get through them just by wearing his figurative coat. That is the mindset that keeps our country moving mindlessly forward down the same old track leading nowhere.

The problem, as economist Lakshman Achuthan told NPR, is that we are treating this crisis exactly the same way we dealt with the problems of the 1980s. But then we were dealing with events very local in time while “what we're living through and dealing with now has been building for decades,” Achuthan says. “If you look at the data, you see that the pace of expansion has been stair-stepping down ever since the 1970s, on all counts — on production, how much can we produce, how many jobs can we create, how much money do we make, how much do we sell. These are all trending down.”

However, even Achuthan believes this is but a cycle that will turn. The basic truth is that these symptoms that have been building over decades are those of a failed system. There is, quite bluntly, no upside. Yes, it will be cold in winter, but far more so than any of us have ever experienced. And it will last far beyond what any of us have ever imagined.

If a coat is to protect you, it better be woven of golden cloth.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

September 16, 2011 – Finally the gold price has taken a step back and I can breathe a lot easier. Forget all of the bubble baloney and correction claptrap flying about lately - analysts must analyze even when though their models have nothing to do with the gold market.

As Robert Blumen so aptly points out in his exceptional Seeking Alpha treatise, What Determines the Price of Gold, there is a fundamental difference setting gold apart from other commodities – gold is not consumed. That difference throws a huge monkey wrench into conventional analysis.

Still, I can’t be comfortable when the growth rate of any asset accelerates, and gold was beginning to show signs of going parabolic. That’s how bubbles really form. The danger with gold is that it remains an extremely underheld investment asset. If investor participation were to grow too quickly it could easily upset the fundamentals and derail the gold price from its decade- long bull trend by pushing prices up too far too soon.

We got a glimpse of that this summer when panicked investors began moving into gold, giving a little extra boost to the price. The shift in momentum began attracting fast-buck investors and when that happens the market starts to move away from the fundamentals and begins to feed on itself. The price spirals ever faster upward until the bubble bursts, the market collapses, and we get to start all over again.

That’s too much drama for us who buy and hold gold as a store of wealth, even though 20 years down the road gold be where it should be regardless of how it got there. We’d much prefer strong and steady growth with an occasional tilt of the trend to keep things interesting.

So I feel good that this particular gold rush didn’t get going. Those who jumped in for a quick killing are getting their comeuppance, and those who are holding on – and others like them who are taking advantage of this opportunity to get in - are what the market needs. Eventually there will be enough of us in for the long haul to tilt the trend upward.

For now I am quite content with gold’s long-term trend and I don’t care in the least how this consolidation shapes up. Just as long as the gold price gets back on solid footing before taking off again - and I keep getting these great opportunities to buy – I’m a happy guy.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

September 14, 2011 – The ho-hum nature of current gold prices is a reflection of growing apathy in this country, a very worrisome trend when what we need the most is exactly the opposite. If you listen you can hear it all around you.

“It doesn’t matter who we elect, so why bother. They’re all in it for themselves.” Yes, but can’t the same be said of us as well? What do we really want from Washington anyway? Answer that honestly and chances are you will see the root of our problems.

Everyone wants the government to give them something – it’s just that the big bucks have a lot more clout than the little guy. But there’s a whole lot more little guys than there are fat cats - they couldn’t tuck it to us if we didn’t let them. Someday the masses will rise to assert themselves, and if they wait too long it could get very ugly.

It is a sad state of affairs when a society can rally only around past tragedies and not future hopes. There is no future when all our energies are wasted casting blame rather than being put to constructive use. A really good place to start would be to can the vitriol, quit the bitching, and take a good honest reassessment of where we stand. Forget about what we want and concentrate on what we need. And the first thing we need is each other.

There will be no tomorrow if we keep looking outside ourselves for answers. It was not so long ago that Americans took care of each other, looking to the government only for protection against foreign aggression. Then the government got into the business of protecting us from ourselves and everything went downhill in a hurry.

No great social innovation comes without pain and no government can change that. The moment it tries the experiment is doomed to failure. The free market never got a chance to prove itself in America because at the first sign of abuse the government rushed in, flexing its arrogance. But as regulations piled up liberties abated – and the abuses just became more clever and more insidious.

The market has a way of cleansing itself of abusers. For a period victims will be claimed, but the period will be brief. The government’s only role should be to give remedy to those harmed. Government regulations, however, presume guilt on everybody’s part and preemptively punish all in the name of equality.

But hey, if spilling a hot cup of coffee in your lap can be like winning the lottery, it must be a pretty good system, right?

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

September 13, 2011 - As expected, last Tuesday morning was laden with consternation over Europe’s deteriorating sovereign debt disaster. Stocks fell beyond two percent in initial trading on Tuesday.

• European shares decreased by 1 percent, spreading the earlier session's sharp drop, with bank shares striking a 29-month low on uncertainties about how Europe is dealing with its calamitous debt.

Coupled with monetary matters sinking to their most reduced form in more than two years, the region's stocks dove 4 percent last Monday. U.S. markets were closed for the Labor Day holiday.

• Much better performing Swiss shares were increased after Switzerland's central bank interceded to drive down the price of the franc, sustaining exporter shares such as Transocean Ltd.
• The PHLX Europe sector index declined 4.8 percent. U.S.-listed shares of Credit Suisse fell 13.6 percent to $23.66.

Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey said, "Europe's problems are our problems. We have concerns about the slowdown in the emerging markets, specific to Asia. We have a euro zone that is an apoplectic frenzy of just trying to right the ship. If you can find some stabilizing influence in the euro zone to give the global markets some confidence, I'd be shocked."

• The Nasdaq Composite Index fell 54.41 points, or 2.19 percent, to 2,425.92.
• The Dow Jones industrial average fell 280.37 points, or 2.49 percent, to 10,959.89.
• The Standard & Poor's 500 Index declined 30.45 points, or 2.59 percent, to 1,143.52.

Traders expected the Institute for Supply Management's August non-manufacturing index at 10:00 a.m. EDT for some type of comprehension into the stride of economic salvaging. Wall Street outlooks are for a reading of 51 versus the 52.7 in the prior month. Statistics on Friday presented zero net U.S. employment development and strengthened recession anxieties.

As communicated by the Financial Times, large banks in the United States have been presented with an arrangement consisting of a multibillion-dollar imbursement in exchange for restricted legal accountability. These occurred in negotiations with state officials on resolving demands of inappropriate mortgage procedures.

• Bank of America Corp lost 5.8 percent to $6.83
• JPMorgan Chase & Co fell 4.1 percent to $33.20

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

September 07, 2011 – Many investors frantically looking for someplace safe to park their wealth are still balking at current gold prices, and they keep getting burned. Now that the Swiss have pulled out all the stops to end the run on the franc, speculators in the currency have lost 8.5% in just the last three days and over 16% over the past month.

The franc, after all, is just another fiat money. The Swiss were unhappy with its valuation so all they had to do was print up a bunch of new bills. Any asset that can be so easily manipulated makes a really lousy store of value, but some folks still don’t get it.

In the wake of the Swiss announcement that they will hold franc at 1.2 euro the gold price instantly dropped from a new record, which Kitco precious-metals analyst Jon Nadler told the Wall Street Journal was due to investors covering their losses on the franc by selling gold. That is a remarkably twisted bit of logic considering the reason they bought gold in the first place was probably to hedge against just such an eventuality.

Amazingly, the dollar gained some ground against the franc and euro as investors jumped. With nothing but false hope keeping the dollar afloat and the fundamentals still strongly pushing gold upward, however, experts agree that the gold price will quickly resume its rally.

“Increasing the supply of the Swiss franc means the safe currencies are all gone,” Urs Gmuer, asset manager at a prominent Swiss investment advice firm, told CNBC’s Katy Bernato. “That is why gold will have a revival.” More than that, Gmuer believes gold has entered a “super cycle” that will “will end all the other major bull markets,” driving the gold price to over $6,000 per ounce.

That’s not so fantastical as you might think. According to Bernato, the long-term relationship between gold prices and the global money supply strongly supports a near-term peak between $3,500 and $4,000 per ounce.

While stocks stumble, currencies crumble, and debt capital demand declines, investors will finally have to realize that gold is the last asset standing.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

September 02, 2011 – While volatility in the gold price seems to be taking a breather it might be a good time to take a few steps back and have a look at the big picture. According to the AP, this week’s stock performance can be attributed to hopes “that the Federal Reserve would respond to mounting signs of weakness in the global economy by providing more stimulus to the US economy.”

If that doesn’t raise a huge red flag for you then by all means go and buy some stocks. But if it does, then why should such illustrious press, with its vaunted reputation for impartiality, give such a transparently absurd concept any credibility? As David Fry so succinctly said in the Daily Reckoning, “the media outlets are merely parroting what the professional investors, professional economists, professional politicians and other professional storytellers are saying.”

Americans love “experts” because they relieve us of the burdensome task of thinking. But the price we pay is the loss of intuition, that gut feeling that takes over in a crisis when we don’t have time to think things through. It was experts who convinced 12 honest men and women to disregard everything else and acquit because a glove didn’t fit.

Granted, this deck is stacked. Keynesian economics has broad popular appeal because everybody wants something for nothing. Be good girls and boys and come December 25 all sorts of goodies will be lavished upon you. Play along with the fractional reserve pyramid scheme and we will all be filthy rich someday. Consume, borrow, and consume – it will create a perpetual motion wealth-generating machine. And if all else fails, go to war to get it back in motion.

So we listened, borrowed, and consumed. But we were gullible, not stupid. We knew when we hit a brick wall because it hurts like hell. I hate to give Bernanke credit for anything other than bringing our economy to its knees, but he at least tried to give us a clue. He knows that one more attempt to fatten up Wall Street insiders at the expense of the average American will derail the gravy train permanently.

The “professionals” are playing a very dangerous game promoting the status quo. When those who are perceived to be the best economic minds remain fixed on failing paradigms, people become susceptible to every contrarian thought that is more consistent with their reality.

When people who have forgotten how to think for themselves can no longer believe in the experts, only chaos can result. The solution, of course, is not to seek out new experts, but to start thinking for ourselves. When the time comes for action, you will know just what to do.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 31, 2011 – Now here’s a switch: Yesterday NYMEX kept alive the afternoon surge in the gold price and today it rebounded nicely following a sharp dip in early trade. That just might signal that the speculators sense the end to the battle to keep prices low may be near.

Meanwhile, Wall Street has its attention firmly fixed on the September meeting of the Fed. The minutes of the Fed’s August meeting give us some insight to what’s in store. First, QE3 is still squarely on the table. And second, should the idea of QE3 be proven unsellable, they will simply dress it up in different clothes.

One popular slight of hand involves selling off short maturity bonds to buy longer maturity bonds. But that is exactly the same as purchasing new bonds with a maturity equivalent to the difference of the two.

It seems that the only debate within the Fed has been about how to best disguise QE3 so that the people can swallow it and keep it down. Of course Wall Street is happy – more free lunch is on the way, and just maybe they will have enough time to dump their garbage off on “dumb money.”

To pull that off would require some rosy economic news, which the AP was more than happy to provide with its ubiquitous report on July consumer spending. But as Daryl Montgomery notes in Seeking Alpha, the AP article “seems to have reported more favorable numbers than the ones the government released.”

The AP reported a 0.7% gain in non-durable goods but the government’s own BLS show a 0.3% loss. AP simply didn’t adjust for inflation – one of the oldest tricks in the book.

The strong surge in durable goods reported by both the AP and BLS, can hardly be called a trend. End of model year sales – and the manufacturers have been slashing prices to clear inventory – are not sustainable.

That leaves the modest gains in the service sector, which includes utilities. Is it any surprise that the hottest summer on record should run up utility bills? Money spent keeping cool is no different that that spent to keep the car’s wheels turning – it reduces they cash we have to make other more discretionary purchases.

Wall Street may be in for a shock – dumb money ain’t so dumb any more. Americans are getting wise to the smoke and mirrors. Interest in gold is swelling, and it’s telling speculators that it’s time to get out.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 29, 2011 – Another week, another heap of indicators, and most likely another deluge of expert opinion telling us that it all means the gold price has had its day and that we should all rush on over to Wall Street. Those numbers have their place of course (although there are far too many too often for my taste) but they are history by nature, after all, and investing is about the future.

In that vein, everyone is talking about the extended Fed meeting scheduled for September 21st, and not without reason. The Fed’s under a lot of pressure to take a decisive stand on further stimulus, and no matter which way they jump, it will have a major – although probably short- lived - impact on equities. But what really matters is the economy, and unless I miss my guess, September is going to end with another blowup.

The fuse is getting mighty short to pass the US budget in Congress, and if the debt ceiling debacle was any sign, the “debate” should prove once and for all that our government is no longer mature enough to handle even its most pressing fiscal matters. I doubt Bernanke can pump up his equity balloon fast enough to float the market over that morass.

Still, I really do enjoy feeling optimistic and from time to time I get caught up in an article by some equity bull. Calafia Beach Pundit posted one recently in Seeking Alpha that presented a reasonable case that prices are way out of step with profits. “So the question that absolutely begs to be answered is this: Why haven't equity prices kept pace with the huge increase in corporate profits?”

Playing the Devil’s advocate, the author answers his own question:

1. politicians are incapable of spending restraint, so taxes are going to rise significantly

2. the economy is going to be miserable for the foreseeable future, pushing profits way down

3. the Fed's super-accommodative monetary policy is going to push inflation and interest rates much higher

I was psyched for the author’s rebuttal. “Maybe so,” he says, “but that's about what it would take to justify the current level of prices. … you have to be very pessimistic about the future in order to not like equity valuations today.”

Well, yeah, it would and I am, CB. It seems to me you have just presented a pretty good defense of current gold prices.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 26, 2011 – Yesterday NYMEX started the day much as it had the previous two, and by 9:40 the gold price was just seven bucks shy of going sub-$1700. But then it turned around, steadily gaining throughout the day. Does that mean the selloff is over?

Today’s action looks to me like gold is trying to find a happy medium between the long and short positions – and that spells continued volatility.

Take tomorrow’s much awaited Jackson Hole jaw flap. Dr. Bernanke has a daunting task before him. He has to avoid ruffling Congress’ feathers, calm Wall Street jitters, salve the fears of the American people, and quiet global sentiment that is building up to a massive dumping of US debt – all while convincing everybody that he has at least a vague idea what he is doing. That’s a pretty tall order, and despite his many talents, one which I believe the chairman is ill-equipped to handle.

The best thing the Fed could do right now is nothing. Before firemen turn on the hoses they make darned sure they know what’s burning. Since Bernanke & Co. have admitted many times that they don’t understand what is going on in the market, any further action they take is more apt to spread the flames than bring the conflagration under control. In all humility and with all due respect, I therefore offer Bernanke this suggestion:

Stop fiddling with the economy and give it a some time to lick its wounds. Stop trying to create jobs – that should Congress’ business, not yours. Most of all, pack your briefcase and get the heck off Wall Street. Let the markets have a go at finding the way forward – they’re pretty good at that you know. Finally, put your ego aside and practice this mantra: “I don’t know.”

That won’t happen, of course, and the speech will probably say nothing new whatsoever. Still the analysts have to earn their keep so they will wring every conceivable nuance real or imagined from the transcript and put Wall Street into a tizzy regardless of what Bernanke actually says.

Is the selloff over? You can’t forecast a market when it is running amok, so the best answer to that question is, “It’s irrelevant.”

Tomorrow another surge of fear could drive gold through the clouds, or a wave of investor euphoria could send it crashing down. Smart gold investors will resist the urge to sell, knowing their asset is safe, and they will be on constant lookout for bargain gold prices.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 24, 2011 – Don’t let a little bounce – or even a major speed bump - in the gold price worry you. It’s to be expected as investors get acclimated to the changes in the global monetary system. What concerns me, though, is all of the attention put on Jackson Hole.

It’s not as if Bernanke is going to come down from the mount having conversed with a burning bush. I expect he may have a new trick or two to lay on us and a few choice semantic twists to baffle and bewilder, but behind it all is a mind hopelessly bound to an obsolete economic philosophy.

All the bad stuff that has been going on is still going on, so few eyebrows were raised when Japan got another downgrade. And nobody flinched when China’s rating agency downgraded US debt and gave us a negative outlook. But Dagong Global Credit Rating hit the nail on the head: “[the US] has not improved its solvency and the increasing government debt burden will deteriorate the US sovereign debt crisis.”

Still old hat. But another voice is growing steadily louder. “Feed me!” it cries out from that little shop of horrors known as the states. Remember them, the other side of the debt crisis? The Fed ignores the problem because it has no way to deal with it, but we are after all the United States. The states’ problems have very much to do with where the economy – and society – is heading. (Thanks to the Daily Reckoning for collecting these bits.)

California revenues are running more than half of a trillion dollars short of forecasts, and New Jersey got another downgrade because they just don’t have enough money to meet their obligations. But it is the growing societal damage that poses the greatest threat.

Illinois will no longer foot the bill to bury the indigent (mull that one over). Rockford, IL is plucking nearly 20% of its streetlights out of the ground. And the Oakland, CA police department has published a list of crimes that will no longer get a response from the force – burglary and theft are on the list.

The other shoe is ready to drop. It’s a mighty big shoe and it will land close to home. It could happen at any time, and when it does it will send a whole lot more people running for gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 22, 2011 – The price of gold isn’t at all surprising, but the population’s reaction to it certainly is. From the looks of things, a great many people still do not understand what is really happening in the economy and they are putting their future in jeopardy.

With the gold price at historic levels a lot of ordinary people have suddenly realized that the gold in their jewelry is worth a great deal of cash. But rather than put themselves at ease with the knowledge that their “gold investments” are securing wealth for the future, what do they do? They rush to convert that wealth into dollars. Obviously, they must be unaware that dollars are fast becoming worthless.

The gold price is breaking away for one very simple reason: there remains no alternative for preserving wealth. This is not a time to sell but one to buy. Of course the temptation is strong for those who got in on gold cheap, but that is missing the point. You don’t buy gold to make money, you buy gold because it is money.

That brings us back to those bits and pieces of gold you already own. They represent real money. There’s a reason that the gold price is going through the roof: paper money is rapidly becoming worthless. So why would you sell your gold?

The only explanation can be that there are still a whole lot of people out there who do not understand the trouble the dollar is in. It is ingrained in us to think in local terms and to expect the world to follow our lead. But those days are over.

The gold price is surging to new records nearly every day while the stock market cannot seem to find its feet. It’s time for people to wake up to what that’s all about: this is the worst possible time to be selling gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 15, 2011 – Whenever the gold price takes off and stocks stutter you can count on a crush of commentary from the gold bears warning us against investing in gold. Last week’s debacle on Wall Street certainly was no exception.

One by Bachar Samawi and published in Seeking Alpha last Friday starts out well enough saying, “What matters most is which asset is most likely to outperform the other in the long term.” From that perspective gold is the clear winner and I had to see how he turned it around.

Amawi got right down to it: “If you had invested $100 in 1980 in S&P 500 stocks …” Stop right there. That’s probably the oldest and most time worn trick in the book – pick the one basis year in which gold really was in a bubble and topping out. But then Amawi gave it another shot.

Next Amawi picked 1960 for the basis year, a totally fictitious scenario because in 1960 there was still another decade to go before you could legally hold gold. But Amawi was on a roll and he fires the kill shot.

“A $100 investment in gold in 1880 …” One thing is absolutely certain about any investment made in 1880 – the investor ceased caring about it long ago.

All three of Amawi’s examples, each with its carefully selected basis year, neatly sidestep the overarching principle of investing : it is not a one shot deal. To compare investments you have to examine the cumulative present values of equivalent annual contributions over some reasonable period.

For the sake of argument assume you started in 1980. Even making the huge mistake of starting out at the peak of a bubble, gold still would have earned 4% more than the Dow. If you began as soon as it became legal, your gold would have returned 16% more, and if you waited for the bubble to burst and started investing in 1985, your gold investment would have performed 60% better than the Dow.

Of course a prudent investor doesn’t put all his eggs in one basket because, as Amawi says, “assets can have short term fluctuations in either direction.” There have indeed been times when it was wise to go heavy on equities and light on gold.

But there are also times when prudence dictates going light on equities and heavy on gold. Since 1990 the gold price has climbed 231% faster than the Dow and it shows no signs of turning around.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 12, 2011 – This has been one bumpy week for most investments but the gold price has proven that it knows where it is going. Sure things got a little exuberant when it climbed over $1800 – we shouldn’t expect that price for another week or so – but it cooled off quickly. And all the resistance the US exchange could muster – including a 22% increase in margin requirements – failed to rein in this racing pony.

When gold broke $1600 in mid July is was rather tentative, hanging close to the mark for the rest of the month. Since then there has been no hesitation. Gold marched past $1700 and never looked back. In a free and open market there would be no question of whether the gold price would withdraw any time soon. But this market is not so free or open – in the short run.

Big money moves on technical analysis, not good old fundamentals, creating self-fulfilling prophecies over the short term. For instance, when conditions meet a certain combination of technical criteria that indicates an imminent drop in price, it triggers a selloff. And when big money sells, lo and behold, the price drops. We have seen that happen in early trading all week long, but by each day’s end the price of gold had recovered quite nicely.

There is still a long ways to go in this race, we’re just rounding the corner at the first furlong. Equities stumbled out of the gate and can’t seem to pick up the pace. Treasuries look like a contender but there is little chance they can go the distance. Silver is running far behind, but is not to be counted out – that wild stallion is known to finish strong. And out in front the Swiss franc is looking strong, running neck and neck with gold.

The franc was very appealing to investors who can’t get by their unfounded prejudice against gold. Like Bernanke they won’t allow that gold is money, it lacks the old comfortable feel of franc. But the Swiss aren’t at all pleased with having their currency run up by investors, and they are about to take drastic measures to cool things down.

If push comes to shove, even pinning the franc to the euro is on the table. Investors have seen the handwriting on the wall and have already begun pulling out. And the only reasonable place to put that money, despite the aversion to betting on the favorite, is gold.

There will be some lead changes to be sure, but down the final stretch only gold will have the legs to pull ahead of the field.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 12,2011- All markets point to consumer purchases as a critical indicator for good or bad economies. In any economy, the spectrum of consumer spending is anywhere between 50-75% of gross domestic product (GDP). (Reminder: GDP is the capital value of all completed goods and services within a country for a set time and includes public and private consumption, government expenditures, investment, and exports less imports.) Consumption is ultimately the impetus behind almost every intrinsic aspect of global economy.

Consumers

Consumer sentiment must first be measured to get a complete outlook on confidence. According to Bloomberg Consumer Comfort Index, it was at minus 49.1 in the period to August 7, down from minus 47.6 a week ago which made it the second-lowest level in a year. It is believed to be produced by the acknowledgment that consumers will encumber the costs due to Standard and Poor’s downgrade of America’s credit from AAA to AA+. Add stock market fluctuations and flimsy employment reports and you get what people are feeling: uneasy about domestic economic affairs. Since June 2009, sentiment amongst full-time employees has not been as low as this week: minus 43.6. The indicator for those earning above $100,000 dwindled to 21 (the most sluggish since November 2009), implying that Americans who have the money to shop, are simply not. The interpretation of any consumer sentiment index must be studied for several months because observations that only include 30 days, without looking at progression, are misrepresented. The fact that the Bloomberg Index, which commenced in December 1985, and has had telephone interviews every week thereof, can be accurately tied to how consumers are really feeling. It is clear that sentiment is emphatically low, which, in turn, can hinder domestic economic reconstruction as well as global consumer goods retailers.

Businesses

Business indicators are not as compelling as consumer spending, but as a number it can inform us of future demand before policy makers can implement changes. When businesses alter their spending habits, the repercussion can be felt quicker than if it is just by a decrease in consumer spending. Corporate spending is similar to the stock market’s function in the majority of economic restorations as it can be a principal indicator foreseeing upcoming economic events. The Economist Global Business Barometer (administered for the Financial Times and The Economist) surveyed more than 1,500 executives worldwide between June 22 and July 29 and concludes that prior to the global stock market’s alarm of last week; those surveyed were already losing confidence.

Interesting outcomes are as follows:

* 33.8 percent strongly believed business conditions in the global economy to decline over the next six months

* 23.3 trust that the economy will improve (this number was double two months ago)

* Finance directors were the bleakest about employer outlooks

* Executives in some emerging markets were more hopeful than their peers in the United States and western Europe (Imagine that!)

* Despite this, Latin American executives were more forlorn than their counterparts

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 10, 2011 – Solar flares have been prominent in non-financial news lately and they get blamed for all sorts of mischief here on Earth. Believe it or not, a sunspot also has a lot to do with the seemingly incongruous rise Treasuries following their credit downgrade – and the stunning surge in the gold price.

OK, so it’s a different sunspot, but anything for a clever segue. In economics, “sunspot” – or “focal point” – explains the phenomenon of the masses being drawn to a single place in response to a set of circumstances. Humans condition themselves for automatic responses to specific threats, which gives us a leg up on survival over other species. Usually we are well advised to follow our ‘gut’ but on occasion circumstances change so drastically that if we don’t reevaluate our responses we will not survive.

For decades the almighty dollar – and US debt – have been the world’s safe haven. While they were among the least productive assets, their security never came into question. We trained ourselves to flee to the shelter they offered at the first signs of serious economic peril, and we survived.

So it should come as no surprise that even a threat created by deteriorating American creditworthiness would create a rush on Treasuries. It is not due to insanity or idiocy – just instinct. But we know how well instinct works for the vast majority of lemmings.

The real surprise is the gold price. It seems at last that Treasuries have a real contender. A significant number of investors have reassessed their crisis strategies and have turned to gold. They will attract a lot of attention as the current scene plays out, drawing more and more people away from Treasuries and into the real safe haven of gold.

We are witnessing no less than the birth of a new “sunspot.” If the movement reaches critical mass gold will become investors’ instinctual safe harbor. Or it may cool down as have others in the recent past. But the change is inevitable, and not far at all into the future.

Awareness of the weakness of Treasuries and of gold’s strength has grown to the point where it cannot be forgotten. When the tipping point is reached and gold assumes the Treasuries’ role, those who turned their backs on the sunspot and invested early in gold will be rewarded beyond their wildest imagination.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 08, 2011 – Thank God Manic Monday has arrived and we don’t have to bear any more pundit palaver as they gaze into their crystal balls and enlighten us to what the fallout from the Great Downgrade will be.

If there were a shred of sanity left the impact would be predictable. The downgrade was minimal, and long overdue - nothing more than a forced reality check. The only surprise for me in the Asian markets was that gold crashed through the $1700 barrier. Stocks fell, but nothing Earth shaking. However, if public outcry here at home is any indication, we’re in for a wild ride.

One common theme I heard all weekend is that the move was just a political ploy. “How dare they? What right do they have? Hang ‘em for treason!” That sentiment, and I exaggerate only slightly, is just the sort of inane response I have come to expect. Shoot the messenger first and ask questions later.

Cooler heads have been asking for some time what right the ratings services had to sustain our AAA rating, but that too is immaterial. They get paid because the investment world is too lazy to do their own due diligence. It’s what they do.

Even more absurd is the complaint that the ratings services are private corporations and as such they should not have the power to imperil our government. Sorry, you can’t have it both ways. Another private corporation – the Federal Reserve – had a whole lot to do with making the downgrade necessary.

Besides, being dropped from AAA to AA+ is like having your FICO score reduced from 850 to 825, a relatively inconsequential dent in creditworthiness. But if individuals were to display fiscal recklessness as our government has, they would be lucky to have a score over 700.

The downgrade is nothing more than a slightly less fictitious representation of America’s creditworthiness. To Uncle Sam’s biggest creditors what little increase in interest they may realize will still fall way short of mitigating their risk.

The most significant thing to be expected from the downgrade is a disproportionate reaction to it. It is the perfect recipe for panic. At least over here.

Equities in the Asian markets merely continued their slide. Ten-year Treasury yields took a hit, but that elevates their value as they divest. But the telling signal was the gold price steam rolling straight past $1700 – it is going to be a very interesting week.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 05, 2011 – A most unusual thing happened with the gold price yesterday. Trade in the over-the-counter (OTC) continued climbing to a PM fix of $1,679.50, but the futures market (NYMEX) dropped that by about $30. Pardon me while I puzzle that out.

Traders on the American futures market value gold less than the OTC, where real physical gold gets bought and sold. That means they expect, given that any realistic increase in production will be negligible, that demand will decrease. So what will cause that drop in demand?

For one thing, and for reasons that escape me, investors are known to dump everything when they are highly risk-off. But that leaves nothing but currency, which for most means greenbacks - one of the riskiest investments going.

To be sure, a few currencies are still remarkably sound and are tempting investments. But they are still fiat money, and history dictates they too will collapse. The more immediate threat, however, is growing investment interest.

Switzerland reduced its interest rates to zero to keep investors away, but now they are cornered. Investors want the franc because right now it’s the best game in the house. There is just one problem.

The Swiss economy is not all that large. Generations of prudent fiscal policy, including maintaining a gold reserve equal to 80% or greater of the total money supply, have led to one of the most stable economies on Earth. But when global traders descend and start using their currency as chips in their high-stakes games, the Swiss, too, will be forced to devalue their currency.

Gold, on the other hand, couldn’t care less about currency. The real price of gold is that which the principals in the OTC market agree to in terms of the base currency. The futures price is nothing but the current odds of that going up or down. Such a large disparity between the OTC and futures markets, therefore, could be seen as a sign that gold is overpriced. Far more likely, its the dollar that is being overvalued.

If you have any reason to believe that there will be a lasting resurgence in the dollar, then by all means hang on to those greenbacks. Otherwise you would do yourself a huge favor by paying attention to what the gold price is doing on the real markets.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 04, 2011 – I have to admit it, gold prices really surprised me the last two days. It’s almost as if – dare I say it? – investors have come to their senses. Gone were the morning spasms, leaving only a strong and steady upward climb throughout the day. No gleeful delusion followed passing of the Deal, driving up stocks and driving down gold. Most amazing of all, there is no apparent panic.

There is a long ways to go, of course, before any such turnaround can declared a meaningful trend. But Washington has been sent a crystal clear message: The Deal is fooling nobody. But it’s not for lack of politico-babble.

One rating agency even had the audacity to state that it had taken a downgrade off the table, but if the agencies want to retain a tiny shred of credibility that’s not the way to do it. The rest of the world has seen more than enough to call an end to the charade. And so, it would seem, have American voters.

The biggest joke of all is bestowing the power of axe on a select bipartisan group of 12. Whatever they come up with will be take it or leave it, at the peril of Draconian triggers. Sounds sort of reasonable, doesn’t it? Any wagers on how long it will take to be challenged in the Supreme Court? I’d say about as long as it takes to reach the first impasse.

And what is the assurance that those so empowered have a clue about what is really wrong and what it will take to fix it? To me the whole idea seems to be to shift the burden of political responsibility onto the shoulders of a few sacrificial lambs. We can’t let them off the hook so easily.

The bottom line is that The Deal falls far short of putting us on a path to solid fiscal ground. In 2013 we will still owe too much and still need to borrow too much. The Deal does nothing whatsoever to address the underlying crisis choking our economy. And it’s going to get a lot more difficult for the Treasury to peddle our debt.

We could just throw in the towel and accept the TKO, but Rocky Bernanke is in our corner. With a heavy dose of QE3 smelling salts he will probably try to get the economy to stagger back to its feet and go the last few rounds.

But if there is to be another round, I doubt anyone will care. I truly want to believe the good news the gold price is telling us.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

August 03, 2011 – Get ready for a potentially sizeable “correction” in the gold price over the coming weeks - and by get ready I don’t mean sell.

We all know what to expect from the government debt ceiling sideshow – some last minute accord that looks good on the surface but fixes nothing. Just when it looks certain that we will be dashed on the rocks the bungee cord will retract. Ecstatic investors will celebrate what looks to them like a miraculous recovery, jubilant over the sudden reversal of fortune. And gold will take a hit.

Of course the rebound cannot reach the previous high before the next plunge, and ultimately we will be left dangling at the end of our rope. How long it will take for investors to realize that depends on the aftermath of our government’s irresponsibility. And maybe this time they won’t be so gullible. But I say it’s odds on that for a little while at least, politician induced euphoria will drive down the price of gold.

If anything has been made patently evident by the current debacle it’s that the only thing that matters is appearances, the issues will have to wait until after the 2012 elections. In the near term, then, anything goes – reality will take a back seat to whatever illusions the politicians conjure up for their causes.

Over the long term, however, reality cannot be so easily denied. China is getting pretty ticked off with all the nonsense – they have an awful lot to lose from our government’s recklessness. The IMF has thrown its hands up in disgust and disbelief. And even the average American is finding it impossible to believe in Santa Claus any longer.

If gold should hit a wall, pay close attention to what the Wall Street pundits have to say. The louder they laud gold’s long overdue correction, the more likely it will be that investors will panic and fulfill the prophecy.

Today’s gold price is actually on the low side and all the fundamental forces are for the upside. But I wouldn’t be surprised to see a surge of emotion drive the price down by $100 or $200 – perhaps even more. If it does, however, it certainly cannot stay down for long.

That presents an opportunity that none of us can afford to pass up.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 29, 2011 – We should all give a hearty thanks to the government for keeping the price of gold on its steady upwards run – if it weren’t for that fact it is doing so at the expense of the nation’s wellbeing. On this anniversary of the Dodd-Frank legislation let’s pause to see how this “groundbreaking” piece of government regulation is working so far.

Well, actually it hasn’t done anything at all. Not one consumer has benefited from what was widely regarded by Americans as badly needed protection. But at least the lobbyists are getting very rich.

Let’s review. Wall Street gets carried away peddling high risk garbage and the big banks founder. They run crying to Big Daddy Bernanke who reaches deep into America’s pockets and hands them billions of dollars without condition.

Meanwhile, Americans everywhere are losing their shirts. Hearing their outcry Senate Banking Committee Chairman Chris Dodd teams up with Representative Barney Frank to craft sweeping reform legislation, which by some miracle passes both houses and is signed into law.

So what went wrong? In the first place the bill passed only because big money was temporarily strapped and couldn’t drum up the extraordinary amount of cash it takes to defeat popular legislation. More important, they knew a windfall was on its way and with it they could pull the teeth out of the law one by one.

Even with the most noble intentions government meddling in the free market always makes things worse. The perverse theory of too big to fail set America on a course of economic failure. Let’s rewind, except this time we’ll keep the government out of it.

The big boys go down as the free market insists. For a while chaos rules but the markets soon sort things out. Toxic assets can find no buyers so they fall from favor. And the survivors are doing whatever is necessary to make wary consumers want to buy their products.

Reckless consumers are also having to take their lumps, but as a whole we are a whole lot better off. The economy has not been bled dry, stocks are going where the fundamentals dictate, trillions of dollars have not been printed to reinflate the bubble, and the dollar is not in peril.

All is not lost, however. Government meddling is a cancer in the free market, and the market will not rest until it has been excised. But expect it to get a lot sicker before it gets well again.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 27, 2011 – Without question the gold price is straining against its tether, but it certainly isn’t due to a mass epiphany on the part of individual investors. The average American remains happily deluded that all the commotion in Washington means serious work is getting done, and that the government will soon put everything to right. They are in for a rude awakening.

As George Maniere said in Seeking Alpha, “the political partisan bickering being played out in Congress over the debt ceiling is nothing more than a well orchestrated charade by both parties to prepare the masses for what will be a an eventual default on our credit rating.” It will happen simply because there is no way on Earth to avoid it.

The full faith and credit of the USA, issuer of the global reserve notwithstanding, just ain’t what it used to be. So interest rates will rise, compounding the problem of servicing the debt. The money has to come from somewhere, and since it would take an act of God to get any meaningful action out of Washington we will be left with only one option – debase the currency.

But would anybody want to hold an IOU payable in a tanking currency? Only if the notes pay interest at a rate higher than that at which the currency is falling. No amount of Fed finagling can pretty up the outlook for investments pinned to the dollar, so why is there so little interest in gold?

Currently gold represents about 0.7% of global investments – in the 1980s it was four times that. Although pension fund assets equal twice the US GDP and the funds are scrambling to find safe haven, only 0.3% of their assets are in gold. At some point you have to believe that investors will notice central banks everywhere are hurriedly bulking up their gold reserves and they will follow the banks’ lead.

But Wall Street has made investors bubblephobic. So once again, for the record: There is no bubble. Period. People buy into the fairy tale only because they don’t really know what a bubble is. Here is Maniere’s concise description: “A bubble is created by a run up that is not supported by fundamental reasons.”

Gold’s run-up has been going steady for more than a decade now – that’s the fundamentals at work, pure and simple. Until investor interest heats up enormously, there can be no bubble and the fundamentals will keep on driving up the price of gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 26, 2011 – The gyrations in the gold spot price in the opening hours provides an interesting diversion over morning coffee. In the first three hours today we saw the price rise to $1618, dive down more than five bucks, shoot up over $1619, bounce around $1618 for an hour, plummet another six bucks, and then start bouncing around $1615.

What does it all mean? Absolutely nothing of course, in regards to the value of gold - that doesn’t change by the minute. It’s just what happens when investors’ focus gets so narrow that they lose sight of the big picture. And right now they are all tied up in a guessing game over whether the US will default and what the fallout will be if it does.

But this wouldn’t be the first time we wriggled out of debt. In fact it will be the fourth (not including a minor $120 million inadvertent default in 1979), and as before we will probably just technically default through unilaterally restructuring some of our debt.

The pattern of default began with our very first debt, the Continental dollars issued to finance the revolution. Ultimately the Continentals were devalued 1000 to 1 in a clear admission of default. America kept a tight rein on debt after that up to the Civil War when the first greenbacks were printed. Although the government promised the notes could be redeemed for gold, less than a half year later the Treasury defaulted on the promise.

Next came the notorious Liberty Bonds, issued to finance WWI. The government rolled the original notes over three times, with successively better terms. The fourth issue not only bore substantial interest, it made the 20-year notes redeemable in gold. The only problem was that by the time the bonds matured there was no gold left to pay them.

By then Roosevelt was in charge and true to form he simply reneged on all of the domestically- held debt by refusing to exchange the notes for gold. With that and a 40% devaluation of the dollar he was able to pacify our foreign creditors.

By now you have noticed that there is something different this go around – there is no war to justify a default. But the same old tricks are on the table and even though they are fooling nobody, I suspect that for lack of options our creditors will lets us get away with it again.

In the short run I doubt a default will matter much at all. Not far down the road, however, we are going to have to pay the piper.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 22, 2011 – Non sequitur: “a remark having no bearing on what has just been said.” Thanks to Jack Hough in the Wall Street Journal for a few fine examples.

“Gold … is a lousy investment. In 2001, when America last ran a surplus, the stuff sold for barely $300 an ounce adjusted for inflation.” Come again? Gold is a lousy investment because the price soared more than fivefold over the past decade, which Hough relates to deficit spending – a problem that is still escalating out of control?

Maybe it’s because gold is “a lousy hedge against inflation. Inflation results in a rise in the price of ordinary goods, after all, so a common way to fight it is by owning ordinary goods.” I always knew my overflowing sock drawer had a purpose - when inflation drives the price of a pair of socks up to $1,000 I’ll be rich. That one gram of gold will still buy the same 20 pairs that it does today is completely irrelevant.

Regardless, Hough forges on to inform us that gold’s “historical connection to wealth comes only from a handful of chemical traits that made it ideal for the job of shaping coins by hand long before the age of mints and central banks.” Somebody needs to tell that to the central banks so they can stop stockpiling all that gold.

And finally, Hough tells us that “no country uses gold as money today or has plans to do so.” That will come as shocking news to the World Bank, the IMF, and countless economic leaders around the globe who are pushing to stabilize the monetary system with gold.

The most remarkable thing is that Hough crammed all of the forgoing into a single paragraph. The most disturbing thing about it is that undoubtedly many people have read those words and taken them to heart – just as they did when Paul Krugman declared in the NY Times opinion pages that the current rise in gold prices is the result of a nefarious marketing scam orchestrated by Glen Beck.

Michael Jansen, head of metals research at J.P. Morgan Chase & Co., recently said in the Wall Street Journal, that the current rally is “the foundation for people to start thinking that maybe gold's not headed to $1,650 an ounce or $1,700 an ounce—maybe it is headed toward $1,800 an ounce or even $2,000 an ounce.”

Barring a sudden major and totally unforeseen improvement in the macro environment – and that is most unlikely – Jansen clearly has a leg up on credibility.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 20, 2011 - The cautious nature of the rise in current gold prices is a good indication that Americans are still in the wait and see mode. Just how long should we wait, and what exactly are hoping to see?

One major sticking point in this seemingly endless and totally pointless debate is taxes, and yet nobody has a clue about what taxes really are. Sure, there are the obvious ones – those that pick our pockets before we even get our hands on a paycheck, and those we pay spending whatever is left to us. But in a broader sense a tax is anything that diverts wealth from the population to the government, and those pale in comparison to the mother of all taxes - the indiscriminate, insidious, and insatiable consumer of wealth we call hyperinflation.

Given the choice between coughing up another few percent of our wealth now and opening the door to hyperinflation should be an easy decision to make. It may not solve any problems, but it makes solutions possible. As always, however, our representatives are locked in battle over the entirely wrong issues.

Denying where we are cannot get us to where we need to be. Kicking the can down the road for the sake of winning reelection is inexcusable – we simply don’t have the time to keep playing games.

Patience is almost always a virtue just as panic is almost always a vice. But patience is too often confused with complacency just as panic is confused with urgency. This crisis calls for immediate and decisive action, but that is not forthcoming from Washington; we have been left to fend for ourselves.

Yet we are stalled right on the railroad tracks, waiting to see if it is Amtrak or Conrail bearing down on us and hoping it’s really just a hobo holding a lantern high. We have lost our survival instinct to blind faith.

The only place to wait and see is from a position out of harm’s way. Once that headlight comes into view priorities must change. It is too great a gamble to remain where you are frantically trying to get the car started. It is time to cut the losses and head for safety.

We already know all we need to know about the economy – clearly there is too much risk in staying put. Only after we have taken advantage of today’s gold prices to secure our wealth can we afford to sit back, wait, and see.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 18, 2011 – In a healthy fiat money based economy the gold price should keep pace with an expanding money supply, which was the case here from the time we went off the gold standard until the Fed unleashed QE2. According to data from the St. Louis FRB, over the two decades leading up to Bernanke’s Big Blunder the US adjusted monetary base (AMB) expanded about 275% at a steady and manageable rate. In that same period the gold price also went up roughly the same.

Although expansion of the monetary base devalues currency, for a while the credit that represents the expansion fuels economic growth and that holds inflation in check. Gold just goes along for the ride, countering inflation. However, credit can take an economy just so far before the accumulated debt begins to devour GDP and a crisis is born.

The problem – which any reasonable person would think was obvious – is not too little cash but too much debt. None-the-less, the Fed fired up the presses and in less than a year and a half more than tripled the monetary base. That’s 275% expansion over two decades, and 300% expansion in under two years.

Gold got left in the dust as Bernanke inflated the liquidity bubble at a yearly rate five times faster than that of the gold price. That’s because gold reacts not so much to economic events, but to the fallout from them. The effects of bungling of this magnitude are bound to be widespread and felt for years.

QE2 initiated an exponential increase in the growth rate of the AMB, and whenever a significant macroeconomic event experiences an exponential change, chaos usually follows. In this case, regardless of anything our government says or does, the world has been driven towards two fundamental changes.

The first is the establishment of a new global monetary system that is stabilized against deteriorating fiat money. The second is a return to a free market, requiring only that it operate in the open and be subject to common law. Under those conditions the markets will balance out inequalities and bring about real recovery much faster and far more effectively than any government program possibly could.

The final curtain has yet to be lowered, but the play is over. When one critical input to the economy changes exponentially, something will react in opposition – as the dollar will fall to oppose expansion of the supply. That’s hyperinflation.

As the greenback quickly approaches worthlessness prices in dollars will become meaningless and a new monetary basis must emerge. Regardless of what that might be, the gold price will be the standard by which it will be weighed.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 15, 2011 – Three days ago pundits were saying that the gold price was unlikely to move above the support level of $1,575. Yesterday it smashed through and closed over $1,590 and the price is very likely to cross the almost mystical $1,600 the mark in the next few trading days. Is gold breaking out?

I don’t think so, at least not quite yet. Bernanke has come out with his strongest statement yet that he is ready and willing to pick up the magic wand once again. That made the stock market happy, which in the short term could prevent gold from really cutting loose. The mere thought of Bernanke in wizard’s garb looming over Wall Street has even put a damper on the Moody’s warning.

When the fog finally clears, however, we will find that in all the schoolyard scuffling the US has been dealt a mortal wound – a death blow to its credibility as a sane and prudent society.

The dollar, like any other fiat money, has value only to the extent that global markets have faith in the government that prints it. It is inconceivable that such faith can survive the tragic comedy that has been playing on capitol hill. Our government has proved its priorities beyond any reasonable doubt and making a good faith effort to deal with its debt problem is far down on the list.

That would take bold, aggressive, and unpopular action, which is anathema to American politics. Times like these demand outrage from the electorate, a sweeping vote of no confidence through the power of recall. But in the immortal words of cartoonist Walt Kelly, spoken years ago through the character Pogo, “We have met the enemy and he is us.”

Every two years for decades we have sent our favorite sons to Washington, telling them “Grab whatever you can for us and to heck with everyone else.” We the people dictate what our politicians do and now we must bear the comeuppance.

How and when that will play out is uncertain. Perhaps another year of watching QE3 drag the country down to unthinkable depths is in store, but I think it will come much, much sooner.

The gold price is already stretching its restraints to the limit – when it finally breaks free you will know the end time has come.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 13, 2011 – The gold price is getting fidgety as we draw closer to two important milestones – the endgame of the debt ceiling fiasco and Bernanke’s Baby’s first birthday. Although it can be argued that the former if of far greater significance, I have to disagree.

All the palaver and grandstanding has but one thing in mind, and it’s not fixing the economy. There’s an election coming, and just like summer reruns campaigns are starting up earlier every year. Even if the politicians had a clue about the real problems and what must be done to fix them – and they don’t – they could never sell the electorate on it. Selling out the country for a few more years in office is just business as usual.

So let’s talk about Bernanke’s bouncing baby. Well, perhaps not bouncing. Twitching, maybe, as it lies on its back staring blankly at the ceiling. Poor little tot looks rather sickly, doesn’t he? Now he is surrounded by doctors who are all scratching their heads about what they can do for him next.

“I know!” says one. “Let’s force feed more of the medicine that made him sick!”

“No,” says another. “Let’s starve him!”

The plastic surgeon speaks up, “We could doll him, prop him up, and tell everyone he is fine.”

The other doctors grin broadly, nodding their agreement, when a man in a Brooks Brothers suit steps out of the shadows. “Why not sell him to the highest bidder and split the dough?”

Meanwhile, a gathering of concerned mothers outside the room are shouting “Just change his diaper, give him his bottle and some love, and he will get better!” But their voices cannot be heard through the exceptionally thick walls.

It’s a sorry state of affairs, all right. The patients are running the asylum and nothing short of systemic failure can change that. We would all be much better off if we sent the politicians home and took the advice of the man in the suit.

Terms of sale: No cash. No credit. Just gold. We know where the gold price is headed.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 08, 2011 - Current gold prices are underscoring a disconnect between the corporate dominated government and the sentiment of the American people. The Tea Party has awakened the electorate to the fact that our politicians are marching to the beat of their own drummer, and it is only for wont of bona fide leadership that their success in Congress has failed to bring about the change we crave.

So rather than get down to business Washington is still playing the same old games, gambling America’s future prosperity away on irrelevant issues. “Poll after poll shows that the American people want higher taxes. That's not the same as liking higher taxes. The people have simply concluded that higher taxes are preferable to the alternative,” says Froma Harrop in The Providence Journal. An “Ipsos/Reuters poll shows three-fifths wanting to raise taxes to cut the deficit.”

We know it will hurt, but we also know it is necessary. And we know that tax hikes alone aren’t a panacea. A Rasmussen poll found that public sentiment about AARP changed little after it conceded that cuts to Social Security benefits would be an acceptable component of overall fiscal reform. It would seem that America is ready to take on the challenge while the government appears intent on prolonging the pain.

Jim Grant, editor of the Interest Rate Observer, posed this question in the Wall Street Journal: “Why No Outrage? Through history, outrageous financial behavior has been met with outrage. But today Wall Street’s damaging recklessness has been met with near-silence, from a too tolerant populace.”

John Maynard Keynes gave us a clue as to what is in store: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the forces of economic law of destruction and does it in a manner which not one man in a million is able to diagnose.”

In other words, the worst is yet to come and nobody can predict how bad it will be. It all depends on how long it takes us to stand in unison and say, “we have had enough.” Only when the pendulum finally swings back to government by the people can we expect the price of gold to again be in synch with the world we perceive.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 06, 2011 – The fundamentals of supply and demand alone bode well for the gold price trend, but there is also a distinct possibility for astronomical returns. Before we get into that, however, let’s dig a little deeper – literally – into gold production.

“The analytical firm Standard Chartered has calculated a rather subdued 3.6% gold production growth over the next five years,” says noted analyst Chris Martenson. Gold, like so many other natural resources is in its depletion cycle, meaning mines will have to go deeper to recover ever diminishing yields. But that alone is not enough to drastically impact the price of gold bullion.

Rising energy costs, however, jack up not only operation costs but also every capital expense required to safely extract ore as mines reach down up to five miles below the surface. The break- even price of gold today for extending existing mines is already at $1,400, and new mines will need the gold price to rise above $2,000 to be profitable.

With emerging economies rapidly driving up the demand, gold bullion prices will have to rise accordingly just to keep pace. But the decaying state of fiat currencies hints at the potential for the gold price to reach unthinkable highs.

The movement towards monetization – backing currencies with some degree of gold to stabilize the exchanges – is soundly under way, and many believe it to be inevitable in the near future. So what does that mean?

If we were to move to 100% backing of the current money supply, Martenson calculates the gold price would be forced to rise above $60,000 per ounce. I won’t hold my breath waiting for that to happen, but consider this:

Assume that we destroy one half of the current money supply and back just 10% of what’s left with gold. That is an equally radical assumption in the opposite direction and we’re still talking $3,000 per ounce – before factoring in supply and demand.

It is patently obvious that today’s gold price is a poor reflection of the fundamentals and is an even poorer representation of the gold price trend.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 05, 2011 – Current gold prices are a sign of widespread confusion and indecision among investors. While its is clear to most Americans that the economy is getting worse and that the government is not only incapable of fixing it but is complicit in the decline, they are still reluctant to turn to gold for a solution.

Unfortunately the recommendations they receive from their advisers gets support from well- intentioned but misguided “gold bugs.” (Despite the pejorative connotation of that term, I am proud to count myself among them.) Admittedly I do passionately beat the drum for what I believe to be a common sense response to a real threat, but just as it is when prophets fix a date to the Rapture, credibility is lost when the time for specific prophecies of economic and social collapse pass without even a ripple in the way things are.

Taking shelter in gold is not about facing any single moment in time, it is about being prepared for the eventuality of life altering events. It is the difference between panic and prudence. We who write about the perils in what we see going on around us are only, in our own small way, trying to follow in the footsteps of Thomas Paine as he appealed for Common Sense:

“Perhaps the sentiments contained in the following pages, are not YET sufficiently fashionable to procure them general favour; a long habit of not thinking a thing WRONG, gives it a superficial appearance of being RIGHT, and raises at first a formidable outcry in defense of custom. But the tumult soon subsides. Time makes more converts than reason. As a long and violent abuse of power, is generally the Means of calling the right of it in question (and in Matters too which might never have been thought of, had not the Sufferers been aggravated into the inquiry).”

America is far from realizing that the challenges that we face today are no less than those facing the creators of this great nation. We need men and women of spirit and passion, like Thomas Paine, to awaken us to the crisis and move us to action. But in the end, time will once again earn more converts than reason.

Common sense, after all, is a rare commodity. In time, however, the prophecies of some of even the most radical gold bugs will come to bear, and people will come to believe. The gold price will stand in testament to their conversion to common sense.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 01, 2011 - Brett Arends in MarketWatch has shed some light on the surprising boom in the stock market that has had a lot to do with restraining the gold price. The investment analysts “TrimTabs says companies spent a thumping $124 billion in the first three months of the year trying to boost their share prices by buying up stock … about $2 billion for every day the market opened.” And who wasn’t buying? “Insiders’ stock purchases came to less than $2 billion for the entire quarter.”

Simply put, insiders are using their corporate coffers to fatten their stock bonuses, buying back stocks which they believe are too overpriced for their own portfolios. When such purchases are made from profits it can be argued that they are of benefit to shareholders, but a great deal of those transactions were funded by corporate debt, which surged to record levels during that period. By the end of March nonfinancial corporate debt had climbed over $100 billion since the start of the year to a level nearly 10% higher than at the peak of the credit bubble.

It’s a house of cards not unlike Bernanke’s. One has to be leery of corporate paper issued solely to boost its own stock prices or to entice investors with higher dividends. And there is a ton of that floating around. One also has to be leery of stocks when the execs themselves don’t find prices attractive.

Still, earnings would seem to support the market – for now. But what little support there has been for earnings is rapidly eroding. There can be no cash flow when there is no cash, and consumers are running out the means to get it fast. And we have yet to feel the real impact of the still falling housing market, which already has more than 25% of mortgages under water.

The current stock market is just one more manifestation of the big money game, which depends far more on illusion than on substance. There will always be money to be made, but only when you can catch the upside of the latest trickery.

With the stock market as bloated as it is today I’ll stick with gold - the real money game - and buy all I can while Wall Street wizardry keeps holding down the price of gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 29, 2011 – Given the fixation on Greece that global investors have had lately it seems likely that the price of gold could be in for another slump. From my perspective, however, the goings on in that relatively minor economy more aptly is a sign of things to come here on our own shores.

By passing the five-year austerity program the Greek government averted default and gave the country some breathing room to work towards serious recovery. “We have to do anything necessary to avoid the country collapsing,” Prime Minister George Papandreou said of the massive “spending cuts and new taxes [which] was set as a condition for another international bailout to keep Greece from defaulting on its debt,” says the Wall Street Journal.

The real significance of the story, however, lies between the lines. “Wednesday's vote came as a fresh round of violence gripped Athens, with hundreds of stone-throwing youth clashing with police in and around the city's main square,” the Journal says. “Many Greeks believe the austerity plan will lead to further job losses and bigger financial burdens on households … Greece's two major umbrella unions, who are vehemently opposed to the measures, declared a nationwide 48-hour strike that began Tuesday—the second general strike to hit the country this month and the fourth this year.”

There is a huge lesson in that for Americans. The people of Greece want a stable economy, only at somebody else’s expense. But there is no ‘somebody else.’ They are unwilling to budge from their insistence on maintaining the country’s unsustainable entitlements, in particular retirement at age 53 with 80% salary for life. And they remain staunchly opposed to any new taxes.

They can’t have their cake and eat it too – and neither can we. Our turn to step up to the plate or forfeit the game is coming soon, and when it does the world will forget all about Greece. I doubt our government is capable of taking such a bold move as they did, and I have even less faith in our citizenry to accept the necessary sacrifices should it try.

With all of the attention on the mouse in the pantry and not on the elephant in the living room it’s a great time to buy gold. But it won’t last forever. Today’s gold prices are a genuine bargain compared to what they will be when the world turns its focus back on our withering economy.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 27, 2011 – The widely varying forecasts for gold prices today are to be expected - they merely reflect the growing disparity between analysts and strategists. While “analysts are largely focused on their individual companies and industries,” says the Wall Street Journal’s Jonathan Cheng, strategists “look broadly at macroeconomic factors.”

Although Cheng was talking about corporate earnings projections, the distinction applies equally well to predictions about the gold price trend.

The microeconomic perspective is narrowly focused on the movement in daily gold prices in isolation, leading to outlandish estimates both high and low. Long-term movement in the gold price, however, is almost a force of nature. In the macroeconomic sense the price of gold is a barometer that consistently measures the general economic health.

Lately, however, investors have been having an unusually tough time understanding the health of the economy, keeping all markets in constant flux. Prolonged efforts by the Fed and other central banks to fix the aftermath of decades of excessive debt have made matters only worse. “The repercussions are likely to play out for years to come in the form of patchy economic growth, further government market intervention … and frequent financial-market swings,” says Tom Lauricella in the Wall Street Journal.

This recession – from the perspective of the average American it is alive and well - is unlike any in the past when lowering interest rates eased borrowing and quickly spurred new growth. This time, however, the well is dry and no amount of priming the pump can bring up water that isn’t there.

“The ability to absorb shocks that you normally could withstand … is much more limited,” Carmen Reinhart, a senior fellow at the Peterson Institute for International Economics, tells Lauricella. “Without the benefits of that cushion…the volatility of economic growth is going to be greater,” echoes Jason DeSena Trennert, chief investment strategist at Strategas Research Partners.

It is a comfort to know that while the markets bounce around unpredictably the price of gold will stick to its bullish long-term trend.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 23, 2011 – Bernanke’s press conference appears to have had little influence on the price of gold. It “may not have spurred a rally in gold, but it has taken the downside risk off the table,” Oliver Pursche, co-portfolio manager of the GMG Defensive Beta Fund, said in The Street. Pursche believes today’s rally had more to do with the problems in Greece, and that will produce outflow from euro based assets into gold.

Bernanke was typically vague and indecisive: “Part of the slowdown is temporary, part of it may be longer lasting. We don't have a precise read on why this slower pace of growth is persisting … Maybe some of the headwinds that had been concerning us—like weakness in the financial sector, problems in the housing sector, balance sheet and deleveraging issues—some of these headwinds may be strong or more persistent than we had thought.”

The only semi-concrete statement - to nobody’s surprise – was Bernanke’s reiteration of the FOMC’s release: “the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent … [economic conditions] are likely to warrant exceptionally low levels for the federal funds rate for an extended period.”

Bernanke did pat himself on the back for averting deflation with QE2, but PIMCO’s chief executive Mohamed El-Erian counters that “the program ‘does nothing’ to fix the economy's underlying structural problems,” says the Wall Street Journal.

Bernanke continues to believe the problems are transitory, the result of global shocks beyond the Fed’s control and officials are putting themselves on hold, waiting to see if that is the case.

“The Committee will … maintain its existing policy of reinvesting principal payments from its securities holdings,” says the FOMC release. It “will regularly review the size and composition of its securities holdings” and will adjust them “as appropriate.”

Meanwhile the Fed lowered its growth target to below 3% and conceded that unemployment will see little improvement this year while core inflation will rise to 1.8%. When translated into reality, those figures are dismal.

What the Fed will do once it has waited and seen to its fill is debatable. “I think [Bernanke] left the door slightly open to revisit the potential for monetary easing,” Pursche says, should three years of downturn prove to be other than transitory.

It would be profoundly insane if the Greek soap opera truly has more impact on the price of gold than the continued bungling of the Federal Reserve.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 22, 2011 – Predicting the future price of gold is admittedly a shot in the dark, and predictions range from the absurdly low to the equally absurdly high. But when 133 analysts go “public in maintaining that gold will eventually go to a parabolic peak price of at least $2,500/ oz. before the bubble bursts,” it’s worth having a listen.

Lorimer Wilson, editor of FinancialArticleSummariesToday.com and munKNEE.com and the 12th most-read internet writer on financial matters such as this, compiled the analysts’ estimates and found that 90 believe the gold price won’t top out until it reaches $5,000 per oz or higher.

Here’s the breakdown: 12 peg the peak between $2,500 and $3,000; 31 say between $3,000 and $4,999; 33 believe it will go as high as $5,000; 46 place it between $5,001 and $10,000; and 11 think the gold price will rise above $10,000.

Tossing out the extremes leaves a pretty convincing range of $3,000 to $10,000 with a wide consensus that the peak will occur between 5 and 10 years down the road. Only three of the 133 analysts believe gold will peak this year and 10 who believe the price of gold will peak in 2012.

While the predictions vary wildly, there is unmistakable agreement that the gold price has a long ways to go and that the peak is several years off. Eric Fry’s discussion of the “misery index” in the Daily Reckoning lends credence to that conclusion.

The misery index is the sum of unemployment and inflation rates. Older readers will recall that Jimmy Carter used it in 1976, when it was 13.6%, to defeat incumbent President Ford. Under Carter, who “suggested that no President has a right to seek reelection with an index of 12.5 percent” or higher, the misery index rose to the then all-time high of 22%.

Using the figures John Williams at ShadowStats.com calculates according to the old, pre- gimmick rules, today we have 22.3% unemployment and 11.2% consumer price index, for a misery index of 33.5%.

The New York Times’ International Herald Tribune reports that “the nation’s 363 metropolitan statistical areas tracked by the Labor Department will generate enough jobs to get back to only the prerecession peak of employment in the first half of 2014,” and that “more than one out of seven [metropolitan areas] are unlikely to bring back all the jobs lost in the recession until after 2020.” Furthermore, “the forecasts do not account for the number of jobs that need to be created just to account for normal population growth.”

With unemployment remaining high and inflation certain to rise, it looks like we are in for 5 to 10 more years of misery, with the price of gold climbing all the while.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 21, 2011 - I can think of only one thing that explains why the stock market is holding up and the gold price has not yet run away – blind faith. Americans by nature are incredibly optimistic, a trait that has seen us through many seemingly untenable situations. We dream the impossible, then do it.

It began with a motley band of colonists who somehow convinced themselves that they could rise up against the world’s dominant empire and prevail. With little more than will they made it so. Just a generation later, our infant nation without a navy and only the caricature of an army saw no reason they couldn’t put the motherland in her place once and for all.

It took less than a century to tame the wilderness and another to rise above all other nations – many of which had existed for millennia - to become the single social, economic, and political leader of the world.

Through our example the global economy flourished, and it is understandable that we came to believe that we would forever hold the dominant position in the world order. But no empire, regardless how great, has ever endured. Examination of previous great civilizations reveals a pattern of escalating social and government excesses and a growing sense of invincibility that preceded their fall, a pattern much like the situation in America today.

Our unwavering faith is admirable, but it must not be blind. We are not infallible, and our mistakes are adding up to the breaking point. As a people, America needs an attitude adjustment.

It begins with realigning our concept of rights back to that embedded in the Constitution. We were guaranteed only a few rights, all of which were intended to limit the government’s intrusion into our private lives. It does not give us the right to anything, yet for decades we legislated ourselves ever increasing entitlements and that has brought the economy to the brink of collapse.

If we were to eliminate all entitlements in one Draconian housecleaning, the crisis would be over. There would, for a brief period, be tremendous suffering, but we have been there many times before and have always emerged the better for it.

Until we are willing to make the necessary sacrifices our faith is perilously misplaced. All great moments in our history began with faith but were accomplished with tenacity and sheer grit.

If we don’t resurrect that spirit and get to work, the stock market will collapse and the price of gold will run away.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 20, 2011 – The gravity of the social/economic crisis driving gold prices today tends to overshadow the little things that make life worthwhile. That is the other side of wealth, things that no amount of government foolhardiness can take away.

For me there is music. I was captivated by the western music of the 1940s, ubiquitous on the airwaves and at the barn dances around the little town where I was born. Then came the legends of the 1950s, a love of which was passed down to me from my older sister.

The 60s brought the Beatles, followed by legions of others who continually expanded the domain and advanced the art of rock and roll. While many bands had their moment in the spotlight only to fade as quickly as they rose, a surprising number (contrary to the predictions of our parents) endured to entertain us throughout the years. We were intimately familiar with the people in the bands and they assumed a treasured place in our lives.

For me there was none greater than the East Street Band. They have enriched my life from the moment they first appeared. For 40 years they were a constant, and I suppose I came to believe they always would be. They were larger than life, and exuded a sense of immortality.

So when I heard that Clarence Clemons had a massive stroke just a week ago, I expected no less than a full recovery. Then yesterday I awoke to the news that he was gone.

The death of a single man has no real import on the grand scale of things, but for millions of us around the world, something important has been taken away. Still, we are fortunate because he will always be as close as the nearest media player.

There is an important lesson in the loss: we need to protect and cherish all of our wealth, not only the material. We cannot afford to drop our vigilance, but we must also take the time to appreciate the people and places and things that reward us for our vigilance.

The passing of The Big Man won’t directly effect the price of gold in the slightest, but by reminding us that nothing lasts forever and that we should never take anything for granted, it just might prod a lot of folks into action.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 16, 2011 – Too much debt drives the dollar down and the gold price up. We have heard that from every corner for years, but we are still afloat. Who’s to say we can’t borrow our way out of this mess then pay it all back when things get better? Chris Martenson, for one, makes a pretty convincing argument in his blog and he has no axe to grind.

Mr. Martenson, who has a PhD in neurotoxicology from Duke University and an MBA from Cornell, analyzes the economy with the tools of a scientist and a holistic mindset that “investigates the ways in which the economy, the environment and energy are interlinked and interact.” [Wikipedia]

“One of the conclusions that I try to coax, lead, and/or nudge people towards is acceptance of the fact that the economy can't be fixed,” Martenson says. “On a pure debt, deficit, and liability basis, the US, much of Europe, and Japan are all well past the point of no return … there's no possibility of a return of generally rising living standards for most of the developed world.”

Using data from the Fed Martenson shows how the US total credit market debt has been growing exponentially along a near perfect trajectory since 1970. To stay on that course required credit to rise to $104 trillion in 2010, but the credit collapse of 2008 flattened out the curve. That’s not a good thing - “the main engine of growth expects, requires, and is otherwise dependent on credit doubling.”

Clearly the growth in credit was unsustainable, and we are some $15 trillion below the trend. With a disproportionate amount of debt incurred for consumption rather than for improving future cash flow, without credit doubling growth grinds to a halt. All that stimulus money that we have been railing against compared to the ‘credit deficit’ was in fact a drop in the bucket.

Still, England managed to climb out of 260% debt-to-GDP hole in the 19th century, so why can’t we? For one thing our total liabilities on and off the balance sheet makes our ratio some three times greater. However, in theory, we could do just as England did with massive cuts to spending. All we need to make it work is an event three times the magnitude of the industrial revolution.

The entire developed world is in the same boat. We have run out of credit and our GDPs cannot service our debt. With nowhere else to turn we will keep on printing, only delaying the inevitable.

When it comes to the price of gold, we ain’t seen nothing yet.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 15, 2011 – For most of the historic six-week slide in equities the price of gold moved upward, as would be expected. Then last week it too began to slide. And now everything is up. That is either a sign of optimism or resignation.

“Reports point to lower food prices, more hiring,” shouts an AP headline. “How many stocks should you own?” queries another. “Stocks shake off slump on retail sales news,” says a third. That is the everyday news we American see, and apparently a lot of us still believe it, even now.

Consider the positive reports on retail sales. Lest we forget, the horrendous tornado season has left millions without the barest essentials. By hook or by crook those had to be replenished, and that is one huge boost in sales. By the logic of the AP release, the economic crisis would be solved if only half the population had their world wiped out.

Another AP report, however, released just the day before, discussed the results of a survey it conducted with 38 leading economists. “The economists are lowering their forecasts for job creation and economic growth for the rest of this year,” the survey revealed. But the economists also agreed that the Fed “shouldn’t bother trying to stimulate the economy … [which] could make things worse by unleashing high inflation and disrupting financial markets.”

The plain truth, say Wells Fargo chief economist John Silvia, is that what we really need is time – time to “shrink huge debts amassed in the mid-2000s” and let the housing market bottom out and begin to recover. “There is no magic bullet. A lot of this stuff just really needs to be dealt with. It’s not a question of stimulus.”

Unfortunately such candor does sit well with politicians. The only time they are concerned about is that between now and the next election, so they see to it that we are spoon-fed our daily dose of sweetened Pablum. America’s addiction to the quick fix makes it easy for them to play us like a yo-yo.

We need to cut the string. Neither false optimism nor resignation will do us any good; only positive action will keep us going until our government stops playing games and starts dealing with the real issues.

It’s all about time. Time for the fools in charge to come to their senses. Time to switch the channel from the financial reports to some more entertaining fiction. And time to buy gold before the gold price once again rises to its trend.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 13, 2011 – In case you haven’t noticed lately, the correlation between other markets and price of gold more often than not appears to defy the fundamental laws of economics. There is a good reason for that: the devolution of the free market into a free for all.

We are nearing the end of another cycle of fiat money, so that comes as no surprise. Above all else a vibrant free market needs a healthy, stable, and universally accepted medium of exchange. As that medium has eroded over the past four decades it has become increasingly tempting for insiders to rig the game. On Wall Street choosing between profits and principles is a no-brainer.

No better example exists than the emergence of derivatives. The concept is actually laudable, as first intended – a means to keep up investor participation by providing a hedge against adverse market movements. But nobody intended derivatives to morph into the money grubbing powerhouse they are today.

Derivatives contribute zero to the real economy yet they are estimated to total some $600 trillion, says Forbes’ Addison Wiggin. That’s roughly 10 times the global GDP. And for the most part, derivatives are completely unregulated. (When one form of junk gets too much attention, the suits just invent another.) And hedge fund giant Mark Mobius says they are still growing. The message is clear: the smart money is betting on failure.

Another side of withering currencies is increasing government interference in the markets in a vain attempt to postpone the inevitable with artificial life support. All that ever accomplishes, however, is giving insiders another ace up their sleeve.

The good news is that markets are extraordinarily powerful and durable, and the fundamentals will always prevail over government foolishness and insider greed. Without a viable medium of exchange wealth tied up in the markets would disappear virtually overnight, and trade would grind to a halt. Clearly that is not an option.

“Gold is money and nothing else,” J. P. Morgan said before Congress in 1913. That is, and always has been true. Markets will deteriorate just so far before they demand a return to the gold standard. When that happens, the price of gold today will seem to be a mere pittance.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 08, 2011 – Think of the long-term trend in gold prices as a bridge across the ever widening chasm between economic reality and the words of Chairman Bernanke. As the credibility gap grows, confidence in our government’s ability to get us back on track wanes.

A Wall Street Journal News Alert reported that Bernanke “expects economic growth to rebound in the second half of the year,” but because “conditions, particularly in the labor market, remain troubled … the central bank's policy to help stimulate the economy is still necessary, reiterating the expectation that interest rates will remain low for an ‘extended period.’”

In other words, the Fed will continue the same ruinous policies that ground the economy to a halt, even though data even hinting of a positive outcome from doing so is nonexistent while data to the contrary is overwhelming. And the government’s efforts to gloss over the real situation fools fewer and fewer people every day.

According to CNSNews.com, even the Congressional Budget Office (CBO) has now taken the Office of Management and Budget (OMB) to task. An OMB report states in no uncertain terms that “the real cost of the federal government guaranteeing the business of failed mortgage giants Fannie Mae and Freddie Mac is $317 billion - not the $130 billion normally claimed by the Obama administration.” That’s quite a gap.

The CBO report explains that the OMB still treats “Fannie Mae and Freddie Mac as nongovernmental entities for budgetary purposes,” and therefore records only cash outlays to the firms. That’s the $130 billon part. But it doesn’t account for the $187 billion cost to guarantee the loans bought and securitized by the firms.

Simply put, The CBO uses a fair-value approach to accounting, which “treats the federal government’s actions just like the actions of any other market participant, taking into account the market risk.” Federal accounting, however, ignores market rules based on the assumption that because the government can print money it operates at zero risk.

Americans, however, are getting wise to the absurdity of the government’s position and are realizing that the risk is only being passed on to us and that we will be paying the piper. Understandably, according to Rasmussen Reports, a full 50% of us now believe “there will be a 1930s-like depression in the next few years.”

Such a sentiment that demands a bridge to reality. Surely as that sentiment grows, so shall the price of gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 06, 2011 - As I have often said, I believe the drivers of gold prices today will pale in comparison to the demand that will be created when the disgruntled and disillusioned American masses finally realize that they have been left to fend for themselves. Although I contend that we have a lot more to go through to reach that point, others disagree.

In a Wall Street Journal editorial Peggy Noonan contends that “The American establishment has finally come around, in unison, to admitting that America is in crisis, that our debt actually threatens our ability to endure, that if we don't make progress on this, we are going to near our endpoint as a nation.” But she adds “the culture of Washington will kill any serious attempts at reform.”

More significant, Ms. Noonan believes that “the people, of course, saw the crisis coming before most politicians did” and that politicians are now quick to concede that the citizens were ahead of them on this. She points to “the 2009 and 2010 elections, when centrists voted like old-style Republicans who worried about red ink” as proof of our awareness. And that is where we part company.

While the people were up in arms, little of the voluminous rhetoric displayed any real sense of the issues involved. To the contrary, the vast majority of it implied that government could be reduced to its intended level with the pull of a voting machine lever. Another prevailing message made abundantly clear was that we could slash the deficit without giving anything up or being assessed higher taxes.

Ms. Noonan does concede “that people like government programs but not government costs. Many people feel they've personally played by all the rules and will reject any specific cuts or taxes that will put new burdens on them.” Thus for generations the electorate handed politicians the mandate “go to Washington and bring home the bacon,” said Alan Simpson, co-chairman of President Barack Obama's debt commission. But they “can't bring home the bacon anymore, because the pig is dead.”

Ms. Noonan is dead on in one observation: The “government gives insufficient respect to the ability of people to decide things for themselves … [but] normal humans don't relish making informed decisions about things they're not sure of, and that carry big personal implications.”

That force must be overcome before the new gold rush can begin. But it will happen, and when it does a new set of rules will send the gold price into unchartered territory.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 01, 2011 – The seemingly unending string of climatic disasters cannot help but have a profound effect on the price of gold. The government says that the impact on the economy will be negligible, but billions of dollars in real wealth have simply vanished. The argument that reconstruction will compensate by boosting consumption and therefore the GDP has one slight flaw, a concept that the government can’t seem to grasp: you can’t consume when you don’t have any money.

There is no end in sight to the haggling over the debt ceiling, so resources can become only more strained. If nothing else, these catastrophes will call ever more attention to the fact that our government is broke. The hard lesson for all of those directly effected will be that the government cannot cover all of their losses, and that will send a message to all of us Americans that the time has come to take back responsibility for our own lives.

I don’t mean to sound callous, but for decades we have watched news coverage of the devastation caused by natural disasters and invariably we are hit with countless sob stories of people who have lost everything and had insufficient – or even no – insurance to cover their losses. But not to worry, Uncle Sam always had wallet out.

I fully empathize with the personal tragedy, but it ends with the economic hardship suffered by individuals who failed to take prudent action to protect themselves. And I am not alone. I am sure that the vast majority of Americans who have borne the expense of insuring themselves and their property are growing weary of bailing out those who did not.

The sheer number and broad geographical scope of these disasters have awakened people to the possibility that it really could happen to them and they are reassessing their own risks and evaluating the level of their protection against them. One thing is bound to stand out: wealth tied up in investments is particularly vulnerable to economic calamity, and very few have any protection against it.

As the realization grows that our government can no longer fix every little problem for us, people are going to relearn how to take care of themselves. One inevitable result will be a movement among average investors – gradual at first but steadily growing - towards insuring wealth their with gold. It will become an unstoppable force driving up the gold price for years to come.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

May 27, 2011 – There is nothing new about the steady climb in the gold price - gold consistently rises as currencies decline. There is also nothing new about the decline of currencies. Once a government divorces its currency from any meaningful backing, the currency inevitably collapses, more often than not taking the government down with it.

Fiat currency is getting all of the attention today, but the printing presses aren’t the only means to the end. Data from a handout from Tulane University maps the Roman Empire’s manipulation of its coinage, revealing some striking similarities to current affairs.

When the obligations for the government’s excesses surpassed it’s revenues, the Romans decided to go for the quick fix - create more money. Because their currency was coinage, the Roman’s only option was to water down the coins’ base metal content by adding impurities.

From 64 AD through 193 AD the purity of the silver in the Denarius coin was gradually reduced to the point where its melt value was cut nearly in half. But the real fiddling began in 238 AD with the introduction of the Antoninianus, a double Denarius containing 4.79 grains of silver, roughly 80% of that in two Denarii. Over the next quarter century the silver content of Roman coinage plunged to less than 5% of what it once had been. And the fall of the empire was under way.

The path the dollar has taken is eerily similar, its worth today is but 5% of what it was under the gold standard. Is the fall of the American Empire imminent? Perhaps not, but a sea change is coming and the parallels with Rome are too many to be disregarded.

George Santayana said, “Those who cannot remember the past, are condemned to repeat it.” As we watch the price of gold climb against world’s fiat currencies we are merely watching another replay of a time-worn theme.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

May 23, 2011 – The Fed’s revised estimate of first quarter GDP growth is due next week, and we can expect Wall Street equity mavens to spin the “news” to prove the gold price has nowhere to go but down. “What most of them will not be saying is that the GDP figure is essentially meaningless,” says Brian Milner in the The Toronto Globe and Mail.

“Gross domestic product is used to measure a country’s economic growth and standard of living. It measures neither,” says Rob Arnott, chairman of California-based Research Affiliates. The problem is that the government looks at spending to gauge GDP. “Unfortunately, the finance community and global centers of power are wedded to a measure that bears little relation to reality.”

Arnott suggests a more accurate measure would not include debt spending, which would make today’s real per capita GDP at the lowest level since 1998, no where near the near-record level as reported by the government. By no coincidence, private sector only GDP is also at the 1998 level.

The reality is that our economy is “bottom bouncing and showing no signs of recovery. All we’re doing is borrowing more and spending more. That’s the only GDP growth we’ve got,” Arnott says. “It’s hard to identify uncertainties that could drive markets massively higher, but relatively easy to identify those that could drive them massively lower. Which means now is a wonderful time to have a very defensive investment posture.”

Once again Bernanke will undoubtedly pat himself on the back and offer the revised figures to back up his claims of success in rebooting the economy. But even mainstream big investors have learned to take his words with a grain of salt.

PIMCO global equities portfolio manager Anne Gudefin told Fortune “the largest position in my fund is gold, which we think is a very good form of protection against what can go wrong.” That is very sage advice for the individual investor and is strongly supported by a Bloomberg survey of 31 analysts, traders and investors.

According to that report the median estimate is that by year’s end the price of gold will have climbed to a record $1,750 an ounce and will continue to climb through 2012.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

May 18, 2011 – From the top ten list of why the gold price has to rise, here’s number one: even when it has the best intentions our government will find a way to louse things up. Jack Hough in Smart Money gives us a prime example.

Remember the $8,000 first time home buyer tax credit – part of the 2009 stimulus package - that was supposed to jump start the housing industry? The purported thinking behind that idea was that if enough citizens could be urged into buying homes prices would stabilize. But in 2009 the market was still way overpriced, leading to the fatal flaw in the premise: Markets don’t stabilize around inflated prices. Only when housing prices retreat to inflation adjusted levels can we expect the market to stabilize.

But at least the homebuyers got a break, right? Wrong. The early birds purchasing a typical home in 2009 have lost an average of 20 grand. Subtract out the $8,000 credit and that comes to $500 per month – way more than the typical payment on principal in the first years of a mortgage. Those who waited to the last minute – April 2010 – have lost $15,000. In other words, the program put a hefty dent in the net worth of anyone who fell for the gimmick.

Helping three million Americans to go under water with their mortgages cost us taxpayers some $26 billion. What’s more unsettling is that home prices are expected to keep on the downside trend for at least another year, burying those “assisted” buyers even deeper and threatening to set off another round of foreclosures.

For decades that has been the pattern of targeted government intervention. They throw a big chunk of cash at a problem creating a temporary illusion of relief. But no thought is given to how the programs fit into the big picture, so there is almost always more downside than there is upside. That would make the politicians look bad, however, so rather than address the underlying problems, they dress up the results.

Thus more taxpayer money heaps on taxpayer money while things continue to deteriorate. And politicians are far too busy rewriting history and spinning the truth to do anything useful. Conflicting information and proclamations contrary to observations have investors in a frenzy trying to make sense of it all. Gold, however, remains elegant in it’s simplicity.

Gold’s value will trend counter to the real state of the economy – as long as that stays on the downside, the price of gold must rise.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

May 16, 2011 – If the government fails to increase the debt limit you can bet the price of gold will go through the roof. But of course that won’t happen. They’re going to play out the same tired political drama they did with the budget right up to the last minute and then pass the legislation, portraying themselves as the heroes that once again saved America. And all the while they will have successfully distracted Americans from the really important issue.

Nothing can be done to fix the American economy without the immediate dissolution and restructuring of the Federal Reserve System. As our fourth attempt at creating a central bank, the Fed “was brought into existence for eminently reasonable and defensible purposes: to establish financial order, to allow for the creation of needed credit for the country, and to resolve the issue of fiat currency,” explains Barry Ritholz in “Bailout Nation.”

Nothing in its charter even hints at the massive and powerful bureaucracy it has become. Nowhere can a mandate be found that directs the organization to meddle in the markets. Nowhere can support be found for the notion that corporate welfare is necessary to maintain financial order.

Yet the purpose of the Fed has been perverted to such an extent that the future of America now rests in the hands of unelected special interests. When Paul Volcker stepped down as chairman the Fed began a power grabbing campaign that escalated under Bernanke to make the Fed the most powerful financial institution in the world.

The Federal Reserve is a non-publicly traded corporation, registered in Delaware, and all of its shares are held by “member” banks. Being private means its books are closed to the public and its activities are only loosely regulated. The Fed holds the fate of every American in its hands, but is responsible only to itself.

Vesting so much power in the hands of bankers goes way beyond big government. No matter which party is in control, until the Federal Reserve gets knocked back down to size the government will be powerless to get the country back on track.

The Fed is now so powerful and firmly entrenched that it is highly unlikely that it can be reined in before the economy has been brought to its knees. Regardless of what happens in the interim, gold prices will rise to mitigate the damage caused by corporate control of our economy.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

May 13, 2011 – This has been one of those weeks when I flat out stop tracking the intraday and daily gold prices. Until such time as I can be honestly convinced that gold has formed an actual bubble the only reason I watch prices anyway is to take advantage of some real bargains. I have a pretty good idea where gold is headed and won’t even consider selling until it gets there. Today, we’re not even close.

So I went looking instead for any new revelation of the obvious and came across a discussion about another distinct advantage big money traders have over us little guys. The argument goes that insiders have access to supercomputers that monitor everything under the sun in real time and are programmed to trade at the speed of light responding to a vast array of triggers. By the time the little guy – even a very vigilant one – catches on the opportunity has passed.

I suppose that is true for day traders, but that’s life when you try to outsmart the house at the blackjack table. To me gambling is the polar opposite of investing. I’m not against it – I actually enjoy flipping a few trades – but I always go in with the assumption that I’m going to leave all my cash on the table. I am free to walk away without regret - and I get an outside shot at easy money to boot.

Investing to me, however, is watching a balanced portfolio grow slowly and steadily over time. Something is always going up and something is always going down, but I am only interested in broad movements and credible trends. And gold is just there, quietly making sure I don’t go bust.

My strategy isn’t glamorous and isn’t likely to make me ultra rich. But neither will I be left in the lurch when the big shock hits. In anticipation of the imminent double dip and the dollar’s final bow before it fades into history, I have hunkered down behind and unusually strong gold position and spread my traditional assets thinly and widely.

When the market begins to crumble, I’ll stake my approach against that of any supercomputer – it will still be ignoring the price of gold at the speed of light.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

May 11, 2011 – A couple of weeks ago I was visiting a lifelong friend – I’ll call him Joe - and as always the talk turned to retirement, investments, and the price of gold.

Joe is the quintessential American – he worked hard his whole life, did all the right things, and dreamed of enjoying a long, peaceful retirement. For three decades Joe ran a one-man water services company. He was modestly successful and by forgoing debt he owns his home outright and has a substantial retirement portfolio. Unfortunately, he was assaulted two years ago and was unable to work for several months. Since then work has virtually dried up for him.

Joe is understandably worried. Meaningful employment is out of the question, but because he was self-employed he is not even a statistic. Social Security, if it still exists when he becomes eligible, will be of little help. He will have to rely on his investments to get by.

Joe has minimal understanding of investing and so has always depended on a reputable financial adviser. But for nearly ten years Joe received only statements and never heard one word of advice. He held his breath as stocks plummeted, seeing his portfolio lose over half its value. Fortunately he recouped his losses when the market rebounded. The problem is, of course, that all of the gains are riding on the back of quantitative easing, and they are particularly vulnerable to inflation.

There are tens of millions of Americans in situations similar to Joe’s. They are forced to put their assets to work far earlier than they anticipated, and they have to trust professional advice to make the most of it. But more often than not, that advice was learned in the same hallowed halls where Bernanke honed his craft.

That’s why Joe and I always end up talking about gold. Joe is still not fully convinced because almost everyone else he knows has likewise been brainwashed by the status quo. Advisers rarely even mention gold and when they do it’s to push some ETF. But he, his friends, and countless others are coming around.

As the data continue to mount there will be a mass movement of individuals into the gold market seeking shelter in a crumbling economy. It will be a force to be reckoned with, and while the dollar falls it will keep driving the gold price upward for years down the road.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

May 10, 2011 – There’s still a little time to take advantage of the slump in the gold price, but it is rapidly running out. Last week’s reversal was an anomaly of a price well on its way to $1600 and already the signs are that the price of gold is getting right back on track.

The slack created by a selloff of major holders is rapidly being taken up by central banks, most notable being Mexico’s, which bought 100 tons in February and March. When even our southern neighbor starts bulking up on gold to protect itself from a declining dollar, it’s worth taking notice.

The housing market is a clear precursor to what will happen if the Fed abruptly stops meddling in the markets. “Home values posted the largest decline in the first quarter since late 2008,” said Nick Timiraos And Dawn Wotapka the Wall Street Journal. But early gains in the market were “spurred by federal programs that gave buyers up to $8,000 in tax credits … Sales collapsed when the credits expired last summer.”

Stan Humphries, chief economist at real estate website Zillow calls first quarter declines “really staggering … [indicating] a reflection of the true underlying demand, which is now apparent because most of the tax credit is out of the system,” extending the sharp drop in prices well into next year.

Now the end of QE2 promises to have an equally profound impact but on a much broader scale. The Fed’s artificial life support failed to give the economy enough momentum to keep moving on its own. Without more of the same the economy will rejoin the housing market in plunging to even greater depths. But more of the same will only postpone the inevitable, ultimately leaving us with an even deeper hole to crawl out of.

There is another ominous warning in the housing crisis. With ever tightening credit even well qualified buyers are finding it hard to take advantage of today’s bargain prices and “only investors can get them, people with cash money.” Not only did big money get us into this mess, only big money will be able to capitalize on it.

Thankfully the average investor can still capitalize on the side effects of the money grab – the inevitable fall of the dollar. As the dollar falls gold will rise, and when big money dumps gold, we can all profit from the opportunity presented by the subsequent transitory drop in the gold price.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

May 09, 2011 – The current dip in the gold price is but a reflection of the broad pullback in commodities, but no matter how desperately Bernanke and friends hope that will prove they were right about inflation, I have serious doubts.

Prices are falling simply because the dollar rebounded. And “the dollar strength … reflects the fact that the U.S. economic data really deteriorated,” said Steven Englander, Citigroup’s G10 strategy head, in a Dow Jones Newswire. Come again? The barn is on fire so you seek safe haven in the hayloft?

Since the government repeatedly tells us that small business is the backbone of America and is vital for economic recovery, it seems appropriate to gauge the recovery on how small business is doing these days. John Tozzi of Business Week fills us in.

“The most recent polls of business owners by Wells Fargo/Gallup, Discover/Rasmussen, and the National Federation of Independent Business … [show] how severely small businesses' finances remain damaged by the recession nearly two years after it technically ended in June 2009. Their hopes for a robust recovery seem to be fading.”

Marc Bernstein, head of Wells Fargo's small business segment told Tozzi that demand for loans “is nowhere near where it would be in a normal recovery.” And the National Federation of Independent Business’ Optimism Index has not escaped recession levels.

The forces driving the gold price aren’t going away. “The evidence of a double-dipping housing market and economy are becoming undeniable, even to those who cling perilously to the notion that government intervention has been a salve instead of a poison,” says Michael Pento in MarketWatch.

The gold price’s susceptibility to dips such as these is mostly due to the persistent diatribe about the “gold bubble.” But you can’t have a bubble when participation in the market is as anemic as it is with gold. Neither can you have a “correction.” Still, big money talks as if it were true and individual investors tend to steer clear.

The time will come when, for lack of any rational alternatives, investors will swell participation in the gold market to the point where a bubble could form. “Indeed it looks like [gold] might be just about to enter its big, blow-off phase,” says Brett Arends in MarketWatch.

It is impossible to say if a bubble will form, but if one does, those who take advantage of current gold prices will cash in big.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

May 04, 2011 – Any dip in the gold price these days is a signal to buy – and buy quickly. That is especially the case today as gold dipped and the dollar rose slightly in response to the death of Osama Bin Laden because there isn’t one iota of economic importance to the news.

In fact, that the dollar rose at all demonstrates how astoundingly desperate investors are to have something to believe in. For a day or two there will be celebrations and then reality will settle back in when they realize that nothing has changed. We are no safer from terrorism. We are no less in debt. And the economy is getting worse by the day, not better.

Just look at the municipal bond market. Between 2007 and 2009 the dollar amount of defaults exploded by over 1800%. And we can expect defaults to surpass $100 billion by the third quarter. Illinois, New Jersey, and California have joined the growing number of cities on the verge of default and a great many more states are drawing perilously close.

Now throw in the rapidly expanding high risk corporate debt taken out solely to increase dividends to jack up equity prices. And even consumer debt is back on the rise. The debt bombs are armed and ready at very level of every sector of the economy. Once they start going off there will be no place left to turn.

Granted, the world is a bit better place today and revenge is sweet. But could we really afford the emotional high? How many billions were spent just so we could savor this one moment? And how will Washington play on it? One thing is for certain – this one small victory can in no way justify the continued destruction of this country at taxpayers’ expense. We can’t allow the government to use it to let itself off the hook.

We have been waiting for ten years to hear this news so, yeah, sit back and enjoy the feeling for a day or two. And while investors giddily shed gold, seize the opportunity. This dip in the price of gold won’t last long.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

May 02, 2011 – After all the hullabaloo surrounding the apparent inability of the gold price to break the $1500 “ceiling,” it seems like it’s rushing headlong at $1600. That’s the nature of psychological barriers – once they are passed, the true market will quickly drive the price back to its long-term trend.

But rather than finally accept that the economy is in its death throes, pundits are once again looking to this week’s employment report for signs that the gold market has things all wrong. Not to belabor the issue, but any news we are given relative to unemployment can make conditions only worse.

Here’s the real situation:

• The number of jobs is still some 7.25 million less than before the recession.
• The percentage of Americans holding jobs today is the lowest since 1983.
• The percentage of American men employed today is lower than at any other time in history.
• New files for unemployment benefits hit a three month high last week.

Now consensus is that 200,000 jobs will have been added in April, continuing the previous two month’s average, which was the best in five years. But that is just treading water, “enough to absorb natural growth in the labor force,” said Jeffry Bartash in MarketWatch. To realistically drive down unemployment “monthly job gains would have to total 300,000 or more over a sustained period.” Acceptable numbers will serve only to prolong the delusion.

Disappointing numbers, however, would bring more pressure on politicians to do something. “They will demand draconian cutbacks in U.S. government spending. And these cuts, in turn will bring a vicious cycle of economic declines, larger deficits and further investor demands for even greater cutbacks,” said Martin Weiss in Uncommon Wisdom.

The Fed has “gotten itself into a real bind, a real Catch-22,” adds Larry Edelson. “Slow the money printing, and asset prices fall. Raise rates, and the economy slumps … End result: Go back to money printing and keep official short-term rates low.”

“In the end, what the Fed does or doesn’t do is irrelevant. The markets are far more powerful than any central bank and any government … and the markets already know … that the U.S. is bankrupt.”

The price of gold, however, will continue to underscore the failure of the United States to responsibly disclose and address the true nature of our economy.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

May 1, 2011 – Just a week or so all the talk about the gold price was whether it would break $1500 an ounce. Now its at $1530 and climbing. You can chalk that up to Bernanke’s stunningly deluded outlook.

But what else could he do? In a few short minutes Bernanke told the world that his policies are doing just fine and while every other major economy is tightening its monetary policy, he intends to hold interest rates low for at least another quarter.

Mr. Bernanke said “the Federal Reserve believes that a strong and stable dollar is … in the interests of the global economy.” So he weakens the dollar even more, which is in our interests alone. “The slide in the U.S. currency is helping the U.S. recovery by making American goods cheaper to buyers abroad. That has spurred exports—a pivotal part of the U.S. recovery,” says the Wall Street Journal. Some 40% of the recovery, in fact, and nations everywhere are threatening protectionist measures if we persist.

As expected, Bernanke also dismissed concerns over inflation. But “higher energy and food prices pushed an inflation measure that's closely watched by the Federal Reserve up to 3.8%.” Still, Bernanke stressed time and again that the ends – the economic recovery – justify any means. But what recovery is he talking about?

Let’s see. “U.S. economic growth slowed to a 1.8% pace in the first quarter and new jobless claims rose last week,” says the Wall Street Journal. “The American economy is growing much more slowly than others around the world … Since the recovery began in mid-2009, the U.S. has grown at an average annual rate of 2.8%, far below the growth rates being registered in developing economies and slow even when measured against most past U.S. recoveries.”

“There is little indication of a change in policy from either the Fed or Treasury—or in underlying economic conditions—that would alter the currency's downward course.” It is remarkable that the Fed continues with policies that are the polar opposite of those proven successful in other, more rapidly recovering economies.

Bernanke says he knows best, but the gold price tells a far different story.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 27, 2011 – This should be a very interesting week for the gold price. The most common perception in the press seems to be that American investors are once again hanging on what Bernanke will say on Thursday as he follows up on the Open Market Committee meeting in a press conference. The rest of the world, however, is waiting to see what Bernanke does.

The Fed is between a rock and a hard place. Its sponsors – Wall Street Insiders, that is – want more free money. A world weary of dollar inspired woes, want nothing short of monetary tightening. My money is on QE3 in sheep’s clothing along with vague allusion to increased rates – but no action. In other words, more of the same couched in new rhetoric.

Whatever the committee comes up with, it is highly doubtful that they will be able to keep up the juggling act much longer. “It's going to be a little bit of groping around in the dark because we are in unprecedented territory,” Andrew Busch, global foreign-exchange strategist said in the Wall Street Journal. “Inflation is a tricky animal for the Fed.”

It is possible that the dollar could rebound some, but the long-term prognosis is grim. The damage has already been done and the added risk won’t just go away. Deutsche Bank – speaking from the viewpoint of the one strong eurozone economy throughout that whole fiasco – rates the US riskier than Italy, Spain and Belgium, “based on debt, deficit, foreign ownership of debt and the current account,” says Richard Barley in the Wall Street Journal.

Nobody really expects any serious work to get done on the big problems here until the 2012 elections. The fact that getting elected in America takes priority over fiscal responsibility is the real problem – it got us into this mess and it will prevent us from ever getting past it. What the Fed does really doesn’t matter. Bernanke’s unblemished record of ineptitude and cronyism will see to it that the price of gold keeps climbing regardless.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 25, 2011 – The price of gold finally closed over $1,500 last Friday. So what? Although technically the barrier is meaningless, it has a strong psychological impact. A lot of potential investors have been holding back believing that if the price broke through that barrier it would continue to climb, which of course will become a self-fulfilling prophecy.

Regardless, this was a very eventful week, especially for a short one. Following the S&P announcement and the initial knee jerk reaction to it, the world seems to be coming out of denial about the real state of our economy and the withering value of the dollar.

“Confidence continued to erode in the dollar Thursday as mounting concerns about U.S. monetary and fiscal policy added to the pressure from low yields,” says The Wall Street Journal’s Andrew J. Johnson. “Virulent antidollar market sentiment” drove the ICE Dollar Index down this week to its lowest levels since the beginning of the financial crisis. “Not only are investors abandoning the greenback for safe-haven gold, but the euro, New Zealand dollar and Canadian dollar all hit multiyear highs against the dollar … while the Australian dollar and Swiss franc climbed to new records,” Johnson says.

With QE2 coming to the end of its run there has been no significant improvement in the most important indicator in the policy’s effectiveness – job creation. Even mainstream media is now challenging the Fed’s doctored statistics. One CBS report, for example, pointed out that there are 840,000 more people working for minimum wage today than there were just one year ago. And the dismal Philadelphia Fed Index on manufacturing released yesterday left little hope that things will get better anytime soon.

And their is even less hope that the Fed will own up to its mistakes and do what it takes to slow down the dollar’s decline. As Andrew Busch, global foreign-exchange strategist at BMO Capital Markets in Chicago, told the Wall Street Journal, “The widespread perception is that the Fed's stimulus strategy … is to blame for the dollar's battered state, with further missteps sure to send the dollar spiraling.”

As big money awakens to the high risk of dollar investments gold will cease to be underheld, restoring the strong uptrend in the gold price.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 21, 2011 – As the price of gold plays with the psychological barrier of $1500 an ounce the spin doctors are hard at work on the S & P downgrade of America’s outlook. Even that weakest of all possible statements of the obvious was couched in patriotic qualification.

Japan too was quick to affirm their faith in the greenback, but what else would you expect the second largest foreign holder of US debt to say? Regardless, we stand alone among the 19 nations with a triple-A rating whose outlook is not stable.

“Since 1989, S&P has issued 212 sovereign debt ratings with negative outlooks, subsequently lowering those ratings 118 times, or 56% of the time,” says Dave Kansas in the Wall Street Journal. “In October 2010, S&P, citing the government's austerity programs, revised its outlook on the U.K.'s AAA to stable, affirming the nation's top-notch rating.” Our government, however, doesn’t even know the meaning of austerity.

Bernanke has accomplished the unthinkable – reducing the dollar to third world status. Eric Fry, Agora Financial’s Editorial Director and a specialist in international equities for nearly two decades points out that this year’s top performing currencies are the Paraguayan Guarani, Mauritian Rupee, Hungarian Florint, Czech Koruna, Russian Ruble, and Colombian Peso. “Each of them has also appreciated at least 25% against the US dollar during the last two years [and] the Colombian peso is up 44%.”

Perhaps the world has too much invested in the dollar to jump ship quite yet, but the loss in faith is clearly driving the gold market towards a “super-bull” cycle.

“The fact that U.S. debt obligations could be put on negative watch is a disquieting, game- changing thought for a lot of the world who always believed that the final haven is the U.S. Treasurys and now these people have turned to [gold],” George Gero, vice president with RBC Capital Markets Global Futures told the Wall Street Journal.

On the grand scale of things an outlook downgrade may not be such a big thing, but it has prompted China to ramp up its efforts to globalize the yuan and is hastening the end of the dollar as world reserve.

A team at Standard Chartered Bank formed to study the future of gold told MSN Money that “statistical modeling suggests a possible 'super-bull' scenario of gold prices rallying up to $4,869 in nominal terms by 2020.”

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 18, 2011 – It really is in the best interest of the Wall Street money machine to keep a lid on the gold price, but is it within their power? Their shenanigans with the trillions in bailout money, as reported by Matt Taibbi in the Rolling Stone, suggest they just might.

Clearly big money has the government in their pocket. Consider this deal: The government hands Wall Street banks humongous sums of cash at 0.25% interest to get them back on their feet. So what do many of them do with their loans? They lend it right back at 3% interest by investing in Treasuries.

Then there is the near-zero interest no-risk handouts under Term Asset-Backed Securities Loan Facility, or TALF. “The program's ostensible justification was to spur more consumer lending, which had dried up in the midst of the financial crisis. But instead of lending directly to car buyers and credit-card holders and students … the Fed handed out a trillion dollars to banks and hedge funds, almost interest-free.” Those folks, by the way, were the ones who created the whole mess to begin with.

TALF works through “non-recourse” loans, which means taxpayers have no recourse when they get ripped off. It’s a sweet deal. The Fed loans a huge pile of cash to some entity that uses it to buy up a bunch of toxic paper and the deposits the assets with the Fed as collateral. If the investment pays off, the entity can sell the assets, pay off the loan and pocket the difference. But if the assets tank, the entity can walk away scot-free while the Fed – i.e. us – eats the loss.

Now I used the term ‘entity’ for a reason. “If you have power and connections, they will give you a freebie deal — if you're good at whining,” said former federal bank regulator, William Black. Case in point: The wife of the chairman of Morgan Stanley (you know, the recipient of $2 trillion in bailout cash) got together with her pal, widow of a president of Morgan Stanley's investment-banking division, and formed Waterfall TALF. Even without any real business experience the Fed handed over $220 million to the pair to buy up student loans and commercial credit. And, like so many other companies that feasted at the TALF table, Waterfall TALF is registered in the Cayman Islands where it is free from US corporate tax.

If big money can wrap the US government around its finger, how much downward pressure can they exert on the price of gold?

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 15, 2011 – Those who wait for the gold price to start climbing in earnest before investing stand to lose fortunes when the dollar loses reserve status.

Without that leverage we will be forced to play by the same rules as every other nation. Sam Zell, one of the world’s leading investors told CNBC that he “can't imagine anything more disastrous to our country.” Jim Rogers, another of the world's top investors, adds “that would lead to a huge decline in the standard of living for U.S. citizens like nothing we've seen in nearly a century.”

“The Fed is financing a vast and rising federal deficit, following a practice that has been a surefire prescription for domestic inflation from time immemorial,” said George Melloan of the Wall Street Journal. With no reason to hold onto the toxic currency the market for all of the dollars we have printed will dry up overnight.

The big problem is that there is no way for us to get out of debt except by printing more money or by default. According to the National Inflation Association, even if American workers were to pay 100% of their wages in federal tax the government would still be running in the red. The dollar will tank, interest rates will skyrocket, and inflation will take off.

After WWII Britain muddled along for almost two decades after its currency lost reserve status, but only thanks to abundant US aid. But in 1967 the government got impatient and devalued the pound 14% in one shot. Instantly British citizens lost 14% of their wealth and prices shot up.

For the next decade the British government tried to curb rampant inflation – nearly 27% in 1975 - by imposing Draconian measures on its citizens. Wages were frozen as prices soared. Businesses were supplied with electricity only three days each week and rolling blackouts became a way of life. The citizens revolted in an unending series of strikes, shutting down everything from trash collection to hospital services. And that was just ordinary inflation.

Our problem is simply too big to benefit from global welfare so hyperinflation will strike here quickly and without warning. It need be nowhere near as severe as it was in Yugoslavia, where hyperinflation hit 100% per day – something that cost $1 one day would cost over $1 million less than three weeks later. Still, a daily inflation of 1.5% would turn a dollar into a penny in just 10 months.

The only way to survive hyperinflation is to prepare in advance by converting cash to gold. A lot of wealth will be lost for those who wait for the price of gold to surge.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 13, 2011 – A phenomenon called “normalcy bias” is keeping Americans in a perilous state of denial, which helps explain why the gold price languishes in light of impending financial collapse.

According to Wikipedia, “the assumption that is made in the case of the normalcy bias is that since a disaster never has occurred then it never will occur.” For most of our lives America has been the most powerful nation on the planet and the dollar has been the world’s default currency. It is only human nature to reject the notion that could ever change, even when all of the facts clearly tell us that the change is already underway.

The problem is the government has made a concerted effort to mislead people rather than educate them, making them even more prone to ignore the warnings. And those of us writing the warnings have failed to make the issue clear.

A good place to start is with a few words about “reserve currency.” That means simply that world trade is conducted in that currency, which has been the dollar since WWII. Other countries buying goods and services from abroad must pay in dollars, so they must first buy dollars, either through sales of goods and services abroad or through currency exchange. When they print excess currency the effect is immediate and harsh: they must sell or exchange more to get the same amount of goods and services from abroad. Only one country in the world gets to play by different rules: The USA.

If we want more dollars, all we have to do is print them. But a weaker dollar drives up prices for everybody. The world knows the dollar is on its last legs and is working fast and furious to detach global trade from it.

The last reserve currency, the British Sterling, reigned for almost 200 years before being destroyed by WWII and the infusion of billions of dollars into the European economy under the Marshall Plan. Things went downhill from there and when the British government tried to fix things by devaluing the pound, all hell broke loose.

Now its our turn. This is vital to understand and in the next column I explain why you cannot afford to patiently watch gold prices for a sign to leap into action.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 11, 2011 – There is no question that a weakened dollar is fueling the rising price of gold, and no question as to why the dollar is sinking. At least one would think. But as the government squabbled over minute cuts last week, cuts that would not impact the real problems in the slightest, headlines across the country proclaimed that the threat of government shutdown is sinking the dollar. Come again?

Sure the idea that idiotic bickering could bring the great US Government to its knees didn’t help our image any, but does anyone really think that to be a significant cause of ever growing investor confusion and falling confidence in the Fed? How about the fact that the Fed has dumped another half trillion dollars into an already bloated monetary base this year while the ECB and other central banks around the globe have tightened policy to hold off inflation and stabilize their currencies – might that have something to do with it?

In a commentary in Rasmussen Reports, Lawrence Kudlow attributes the 15% drop in the dollar index over the past 10 months to the obvious: “That's because there are too many of them.” The natural consequence of that should be equally obvious: Bernanke’s policies are “falling further and further behind the international curve of currency stability.”

Kudlow further points out the uncertainty caused by dollar inflated energy prices, because “nobody knows where the energy tipping point is.” That might well be the key.

On one hand we have a “debt bomb” that is armed and could spontaneously explode at any time, the size of which has been greatly underplayed. Bill Gross, founder of PIMCO, told the Wall Street Journal that “including obligations for Medicare, Medicaid and Social Security, the ‘true but unrecorded’ U.S. debt is $75 trillion … nearly 500% of gross domestic product.”

On the other hand we has surging energy prices, a sword of Damocles that could easily set off a chain reaction that the Fed would be powerless to control.

Either way, the dollar will continue driving up the gold price until the flashpoint, after which no amount of dollars will be able to buy a single grain of gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 08, 2011 – The gold price is up, as would be expected. But so is nearly everything else. “Been Down So Long It Looks Like Up To Me” is the title of a book written back in the 60s, but it fairly well explains what’s going on in the markets these days.

Folks are getting so used to the recession – it’s not over yet for most Americans – that they are seeing ‘not quite as bad’ as being ‘good.’ Normally optimism is a good thing, but not when it threatens your wellbeing. If you’re in the middle of Lake Ontario when your rowboat springs a leak and if stuffing chewing gum in the hole it slows down the leak, that would be encouraging. But you probably would want to put on your life jacket just the same.

Our economy has several very large leaks. For example, a quick look at the Fed’s borrowing statistics reveals a very disturbing rupture in the long term averages. From the time that records started being kept in 1976 until 2006 the percentage of household borrowing was fairly consistent while business borrowing generally balanced out wide swings in the public sector. Public borrowing exceeded 50% of total credit expansion only three times with a peak of 78% in 1991.

In 2006, however, household borrowing nosedived followed by business investment the following year. In the meantime public borrowing skyrocketed – private credit contracted starting in 2008, and since that time public debt has accounted for every penny of new credit.

What that means is clear: Household debt fuels consumption – good for economic growth. Business debt pays for capital expansion – also good for economic growth. Public debt is good for nothing and squelches economic growth. We no longer are putting money to work for us, we are flushing it right down the john.

OK, the Fed calls it investment in our economic future so give the devil his due. How’s that investment working out? Well, we put in $1.5 trillion, give or take and got back a wildly optimistic $500 billion in growth. Add in the interest to the “investment” and subtract out the harm to future growth due to protectionist measures against our monetization policy and it looks like a pretty sour deal to me.

There’s a lot of downside left to this economy. If you want ‘up’ look to the gold price – it has a whole lot of upside left in it.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 06, 2011 – You don’t need a crystal ball to see the future of gold prices — the long-term trend of the Dow/gold ratio paints a very clear picture. And it leaves little doubt that “we are witnessing the end of an era for equities … asset classes go in and out of favor, and gold has proven to be the next great asset class,” reports Fred's Intelligent Bear.

That’s what always happens when wealth preservation becomes the primary concern, and inflation is knocking on the door. Now, with hyperinflation a very real possibility in the near future, all bets are off for where the ratio will bottom out.

The Dow/gold ratio is simply the number of ounces of gold it takes to purchase the Dow. The ratio’s long-term trend has been very consistent, a gradual upward climb in the value of stocks relative to gold followed by a precipitous fall. In the last downward trend the ratio fell all the way down to 1, and there is every reason to believe that’s where it is headed now.

The Dow/gold ratio is a vital indicator of the forces moving the stock market. When it is on the rise — that is, it takes more gold to buy stocks — it is a sign that the fundamentals are improving and demand is growing. When the ratio falls, however, it signals declining value in stocks due to an expanding money supply. The Dow/gold ratio peaked at the end of the past century and has fallen almost 80% since mid 2001.

The National Inflation Association (NIA) believes hyperinflation could set in as early as this year. It is all but certain by the end of the decade, and most likely will come between 2013 and 2015. What matters most to the average American is this stern warning:

“Americans who wait until 2013 to prepare, will most likely see the majority of their purchasing power wiped out. It is essential that all Americans begin preparing for hyperinflation immediately.”

The Dow’s fall in terms of the gold price is rapidly approaching the point of no return.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 05, 2011 – As baby boomers near retirement trusting the price of gold to keep pace with real inflation will help them avert the troubles facing cash-invested retirees today. Not surprisingly the Fed’s insistence on holding down interest rates has hit the most vulnerable Americans particularly hard.

“A long spell of low interest rates has created a windfall worth billions to banks,” says the Wall Street Journal’s Mark Whitehouse. “The longer the central bank keeps interest rates low to stimulate the economy, the more money it pulls out of the pockets of millions of savers.” And that is anything but an oversight.

Voting member of the Fed’s Open Market Committee, Richard Fisher, told the Journal, "Americans who have done everything right, have worked hard, saved their money and stayed out of debt are the ones being punished by low interest rates." Returns on traditional safe cash investments had fallen to 0.24% by January, down 90% since 2007 and the lowest since the Fed started keeping those records more than a half century ago. At the same time, the annualized inflation for the last quarter was 5.6%. Last year the loss of income forced one third of retirees to prematurely withdraw principle just to pay for necessities. That is the start of a vicious cycle that threatens to leave many of them destitute.

The low rate policy also intentionally discourages savings in favor of high risk equity investment. According to the Fed’s own records, American’s are putting aside the lowest percentage of their disposable income ever — 4% — with the one exception of 2009. The Commerce Department, however, touts that savings are up to 5.8%, fudging the numbers by factoring in debt reduction, the bulk of which has been through default — not pay down.

The situation is ugly and the lesson is clear. The Fed has succeeded in making cash investments a losing game. But it does not have to succeed in coercing potential savers into gambling on Wall Street. The gold price has consistently outpaced inflation, and that is the key to enjoying the golden years.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 04, 2011 – “The medium- to long-term trend is still to the upside” for the gold price, according to a Dow Jones newswire, but “volatility is likely to continue into next week as the market seeks a fresh catalyst.” That’s gobbledygook for ‘traders will continue to look for any reason not to invest in the one asset that can get them through these uncertain times.’

Traders were holding back for today’s “key non-farm payrolls reading, which will likely determine the next leg of direction for risk appetite," FastMarkets.com analyst James Moore said in the wire. The rosy news in that statistically spun report will undoubtedly spur another wave of optimism while much more significant and overriding developments on the global stage are disregarded.

Macroeconomics is now global, and it doesn’t give a whit about incremental changes here at home or how important we think we are. That’s a cold hard fact we have got to get a handle on if we hope to go forward from here.

All along our so-called recovery has tried to ride the coattails of global economic growth by improving our trade imbalance with a devalued dollar. Well, we have hitched our horse to the wrong wagon. Global trade as a share of global GDP has fallen faster than any time since the Great Depression says Richard Barley in the Wall Street Journal.

Emerging economies are the most threatened by our poorly disguised effort to dump our economic problems on the world, and they cannot be faulted for trying to protect themselves. Bartley reports that according to a Global Trade Alert governments have been introducing more than one protectionist measure every day. Inflows of money from runaway money printers such as the USA have driven up capital controls. And the Basel III global regulatory standards will reduce the capital needed for trade.

The rest of the world does matter, no matter how Bernanke plays it down. At stake is not how slow or fast we recover, it’s whether we recover at all.

"We still expect gold to rise in the coming months, as it should be well supported by numerous uncertainties," said Commerzbank analyst Daniel Briesemann in the newswire. A few jobs here and there will not fix the fundamental problems, nor will they put the brakes on the long-term trend in the gold price.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

April 1, 2011 - What do you think would happen to the gold price if a government told its 1.3 billion citizens to buy gold? Well, China took that direct route last week in a message from the People’s Bank of China says Robert Lenzner in Forbes. Even as the country takes measures to counter inflation and bolster the yen in a bid to become the new reserve currency, they recognize the need to hedge their bets.

It is not a coincidence that four major currencies - including the dollar and the new currency darling, the Swiss franc - experienced a drop compared to gold the same day. The Chinese, who are adamant about wealth preservation, are certain to take the message to heart while Americans follow their government’s lead and continue to fritter theirs away gambling on Wall Street.

There’s a message here and America needs to listen up if we want to have any chance to stay on top: There is no future in fiat money. Hyperinflation is not some remote possibility; that die has already been cast.

There is a big difference between inflation and hyperinflation. The former is the decline of one currency relative to others. That is not a terminal condition.

Hyperinflation, on the other hand, “occurs when a currency is abandoned all together,” says Graham Summers in a Gold Eagle editorial. And that happens, as it did in Germany following WW I, when “the financial elite [engage] in insane monetary policies using public funds without care and trying to devalue the currency in order to inflate away the debts.” Sound familiar?

the world’s third largest economy is reeling under the devastation of an unprecedented hat trick of disasters - earthquake, tsunami, and threat of nuclear meltdown. Already saddled with debt double its GDP there are few options other than printing more yen.

The club of money printers is rapidly growing, representing an ever greater share of the global economy. Hyperinflation on a global scale should scare the dickens out of everybody, and that is the inevitable destiny of fiat money.

Gold will be the only port in the storm. When currencies become worthless, the price of gold will no longer have meaning - its value will be measured by its fair exchange for all goods and services.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 30, 2011 - It would appear from watching daily gold prices that investors still haven’t learned to look behind the headlines. Rather than be encouraged by the paltry positive news being spoon fed to us by the government, we should be alarmed by what is driving that news.

It has been a year and a half since the Fed first announced that the recession was over, and since that time the economy has grown a puny 3%. Better than nothing, you say? Well, actually that is nothing, but it is also beside the point. According to the Department of Commerce “exports contributed 1.4 percentage points … or almost half of growth, their biggest contribution over an 18-month stretch on record,” says the Wall Street Journal.

So what’s wrong with that? Well there’s no denying that strong exports are vital to a healthy economy, but leaning too heavily on them puts what little gains we have made at risk. The recent succession of global economic shocks has the world’s strongest economies pulling back, and that has caused J.P. Morgan to lower their expectation for global growth down to 3.4% from 4%. Lower global economic growth translates directly to lower imports, which will pull the pins out from what little progress we have made.

As is so often said, what goes around comes around. The Fed’s easy money policies weakened the dollar, which drove up demand for American products. But the policy also fueled rapidly escalating prices for oil and food, which threatened to ignite global inflation. That in turn led to reactionary policies that reduced demand for our products while driving up the cost of producing them. The net results? A more worthless dollar, no real growth, greatly increased volatility, and heightened threat of runaway global inflation.

The whole mess has to blow up in our faces. When it does, we will see the price of gold once again reflect the truth behind the headlines.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 28, 2011 - The price of gold keeps inching upward, but it is still performing well short of what the fundamentals would suggest. Europe’s debt crisis remains a strong driver of the market, but even Portugal’s need for economic bailout has failed to bring gold out of the doldrums.

It’s not that gold isn’t performing well as a safe haven or that the climate has improved significantly that is keeping gold underbought. Instead it is a product of ongoing investor unease and tumbling consumer confidence.

The stock market isn’t immune from the problem. The current “rally” has been grossly overstated because “the light volume … indicates a lack of any desire to sell, not that there is any compelling reason to buy,” said Cantor Fitzgerald market strategist Marc Pado in Market Watch.

Meanwhile the false recovery has taken another blow. It seems that despite encouraging news from the manufacturing sector, the companies that make up that sector are themselves less than encouraged.

As reflected in the durable goods report just released, “business investment isn't growing by much, if at all," said economist Paul Ashworth in the Wall Street Journal. Due to the continued slide in capital expenditures Ashworth dropped his estimate for annual GDP growth to a slothful 2% to 2.5%. And he is in good company. Morgan Stanley has likewise lowered their estimate to 2.5% and Macroeconomic Advisers dropped theirs to 2.3%. Those are recession figures, not ones of recovery.

That’s old news to those of us living out here in the real economy who depend on a paycheck to get us through. And it is why so many retail investors, battered by a constant barrage of conflicting reports and opinion, are desperate for someplace - anyplace - to safely put their money.

Those that seize the opportunity in today’s undervalued market are in for a wild ride when the gold price finally plays catch-up.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 24, 2011 - It’s that time of year again when Berkshire Hathaway releases its annual investor newsletter and Warren Buffet makes his appearance on CNBC, calling into question the strategy of playing the long-term trend in the gold price. Individual investors across America hang on his every word for clues about where they should put their money and they shudder when Mr. Buffet equates gold investments with speculation.

In the first place, Buffet referred only to short positions in gold, and he clearly states that his strategy is a matter only of personal preference. He is looking for shares he can buy cheap that produce high returns - such as the proliferation of high dividend stocks now being funded by toxic loans. To me, that is speculation. But Buffet has billions to play with and I’m a tad short of that.

The problem Mr. Buffet has with gold investment is that it doesn’t offer him the agility he needs to capitalize on every opportunity for slightly greater returns. For the same reasons he shuns fixed interest bonds. But the average retail investor has an entirely different goal, and that calls for an entirely different strategy.

Investing for growth and security is about creating wealth, not income. And the long-term trend in the price of gold proves that gold investment has no equal for that purpose. For example, compare the results of an annual purchase of $1,000 worth of gold over the past 10 years with an equal investment in Berkshire Hathaway. The shares’ average annualized return was a very respectable 9.9% - but gold left that in the dust, returning 19.6%.

Let’s talk income. Instead of reinvesting returns you took them as cash. The $11,000 gold put in your pocket more than doubled what the shares earned.

Better still, the next ten years look even better for playing the long-term trend in the gold price.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 23, 2011 - The expected correlation between stocks and the price of gold, or for that matter those between any two asset classes, has once again run amok as retail investors relapse into the risk-on/risk-off mood swings typical of 2010. It signals that they are realizing things haven’t gotten any better. It is also a sign that the market has moved so far from the fundamentals that they can no longer make informed investment decisions.

Part of the problem is that “the Feds' current use of overwhelming force to block a market correction is creating overwhelming unforeseen and pernicious problems,” say Bill Bonner in the Daily Reckoning. Only Bernanke and his band of disconnected academicians would argue with that. But the Fed is only aggravating Wall Street’s methodical campaign to make the stock market a purely insider game.

The flood of new economic data to be released this week would normally give investors all they need to tweak their strategies, but the market isn’t acting normally. "Non-professional investors feel they don't get a fair shake, that they have no capability whatsoever to understand the forces that are really driving the market … The fact is, they're right," said Dan Genter, chief executive and chief investment officer of RNC Genter Capital Management in the Wall Street Journal.

“Riskier trades by hedge funds, proprietary trading desks and fast-trading computers using exotic algorithms” put retail investors at a distinct disadvantage says the Wall Street Journal’s Mark Gongloff. And “exchange-traded funds … [are] making it harder to judge investments on old- fashioned criteria, such as whether they are expensive or cheap.”

Risk assessment has become a guessing game for individual investors. Their mob mentality has the crowd storming into and out of markets frantically seeking shelter or brazenly seeking profits. You can’t win that way.

To win in the long term all you need to follow is the global price of gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 22, 2011 – The long-term global economic impact of the disaster in Japan is yet to be seen, but investors’ knee-jerk reaction on the price of gold has created an exceptional opportunity.

Japan is the second largest buyer of US Treasuries, and to minimize the economic impact of reconstruction there is a distinct possibility “that Japan's central bank and its government could halt purchases of dollar-based assets … that could result in ongoing weakness in the U.S. bond market, higher yields, a weaker dollar and, overall, a more-difficult funding environment for the heavily indebted U.S. government ,” says Stephen L. Bernard of Dow Jones Newswires.

Coming at a time when Japan’s credit rating has been reduced to AA- and its debt to GDP sitting at 200%, repatriation of investments is very likely – only the timing is in question. If the pullback were to coincide with the Fed’s exit, it “could prove even more costly to the U.S.”

Meanwhile, investor fears that “the country's crisis could undermine the global economy” have led to a frenzied selloff of both equities and commodities, says Dow Jones Newswires’ Javier E. David. Investors seeking safe haven have caused an upswing in US Treasuries and sent the dollar up against most currencies - but down against the yen and to a record low against the Swiss franc.

It get weirder. With the loss of so many reactors Japan is certain create a strong medium- term upsurge in oil demand, yet oil futures are also sliding. And investors are even shedding gold. These are sure signs of an all-out panic. “It's a money game, it doesn't have to be logical economically," said Stephen Platt, analyst at Archer Financial Services.

Eventually logic must prevail, however, and investors will return to gold, the one true safe haven. That makes investing at today’s gold prices one exceptional opportunity.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 21, 2011 – The price of gold took off when Wall Street’s lending shenanigans brought on the fiscal crisis, and it looks like we are in for a repeat.

“So-called covenant-lite loans that strip out safeguards for investors, dividend deals in private equity-controlled companies, and a third class of instruments, payment-in-kind toggle notes,” have surged in the past few months says Nicole Bullock in Financial Times. Those instruments, says Moody’s Investors Service, are “laying the groundwork for painful fallout from the next credit downturn”.

“Cov-lite” loans, which do not automatically trigger a default when a company gets into financial trouble, have already totaled $30 billion this year, strongly challenging 2007’s record yearly total of $100 billion. Such deals allow companies to entice investors by increasing the cash they can pay out, but postponing default on these loans threatens to severely limit recovery in case of bankruptcy.

Private equity interests are also actively competing for investors and “are borrowing at a record rate this year to pay special dividends.” And payment-in-kind toggle notes provide the option for companies to pay on debt with even more debt.

This should all sound unsettlingly familiar. Once again Wall Street is opting for weak credit in order to lure in investors with higher dividends. The fact that they are free to do so lifts whatever veil there may have been covering the reality of Wall Street “reform.”

In hopes of recapturing some of their losses, however, American retail investors are taking the bait, pouring considerable sums into mutual funds in the leveraged finance markets. However, in the absence of M & As to finance, managers of those funds are turning to these more toxic structures and putting that money at risk.

There is no reason to believe that this new wave of risky credit will work out any better than the last, or that the gold price will respond any differently.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 17, 2011 – Everyone seems to have an opinion on what will happen when the Fed yanks away the crutches that have held up the economy for the past three years, but almost every scenario would drive up the price of gold.

One dictum of investment in a doomed market is “he who exits first, loses least.” Michael Mackenzie and Dan McCrum report in MarketWatch that the world’s biggest bond fund, Pimco, “has cut its holdings of US government-related debt, including Treasuries, to zero,” reasoning that when the Fed abruptly stops consuming 70% of issued Treasuries the dramatic drop in demand will ignite inflation.

The main counterpoint to that is that the Fed has made no secret of its plans so the market will have already factored it in. But that is simply too dramatic a change to dismiss completely, and the effect of rising yields – even modest ones – will have a profound ripple effect on the entire bond market.

“The longer-term threat of inflation, assuming the US recovery gathers pace, is another well- flagged risk for bond investors,” adds the report, but Jeffrey Gundlach, CEO of investment manager DoubleLine, has a different take on that. He sees surging food and oil prices not as inflation triggers but “as a tax on US consumers” that would hold back economic recovery and curtail inflation.

More bad employment news, a widening trade deficit, stagnant wage growth, negative home equity, and “the sharpest private sector debt deleveraging since the Great Depression” all could contribute to a double-dip recession and not inflation as Pimco’s Bill Gross suggested. “We are near to another period of economic disappointment,” says Kessler Investment Advisers’ Robert Kessler.

Regardless, because of the dollar’s loss of status as safe haven, it is unlikely that investors would rush to scoop up excess Treasuries in the event a double-dip recession. Instead they would seek the security of hard assets, and that too would push up the gold price.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 16, 2011 – Nothing could be more important than buying gold before the gold price climbs out of reach for those vested in US dollars.

“The thought of a nasty end certainly runs counter to the experience of almost everyone now alive,” says Doug Casey in the Daily Reckoning. “But … the odds are high that the US is going into a time of troubles at least as bad as any experienced in any advanced country in the last century.”

Other countries have experienced similar troubles and managed to pull through, but only because their citizens had the wisdom to move their assets to where they would be insulated from their currency’s decline. When the time came to rebuild, they were able to draw on that capital.

Americans, however, have been lulled into a false sense of security, and have trusted their wealth to dollar-based assets. When the dollar fails, there will be nothing left to begin anew.

Casey predicts, at the risk of his well-earned credibility, that “economic bankruptcy accompanied by financial chaos - is quickly approaching for the US government.” Because we have been conditioned to forego personal responsibility “everyone will look to the government to do something … The government will step in massively,” and as usual, make a bad situation much worse.

But the economic difficulties aren’t what troubles Casey most – it is the disturbing trend towards a police state. We gave them a foothold post 9/11, and “they're going to use the continuing economic crisis to increase their power … the American people will demand it.”

Ultimately it will fall upon Americans to protect themselves and their families, not only from the realities of economic collapse, but from the subsequent struggle for survival of the bureaucracies that brought it on.

There is no substitute for gold to that end, and current gold prices make it possible for those of even modest means to do so.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 16, 2011 – Nothing could be more important than buying gold before the gold price climbs out of reach for those vested in US dollars.

“The thought of a nasty end certainly runs counter to the experience of almost everyone now alive,” says Doug Casey in the Daily Reckoning. “But … the odds are high that the US is going into a time of troubles at least as bad as any experienced in any advanced country in the last century.”

Other countries have experienced similar troubles and managed to pull through, but only because their citizens had the wisdom to move their assets to where they would be insulated from their currency’s decline. When the time came to rebuild, they were able to draw on that capital.

Americans, however, have been lulled into a false sense of security, and have trusted their wealth to dollar-based assets. When the dollar fails, there will be nothing left to begin anew.

Casey predicts, at the risk of his well-earned credibility, that “economic bankruptcy accompanied by financial chaos - is quickly approaching for the US government.” Because we have been conditioned to forego personal responsibility “everyone will look to the government to do something … The government will step in massively,” and as usual, make a bad situation much worse.

But the economic difficulties aren’t what troubles Casey most – it is the disturbing trend towards a police state. We gave them a foothold post 9/11, and “they're going to use the continuing economic crisis to increase their power … the American people will demand it.”

Ultimately it will fall upon Americans to protect themselves and their families, not only from the realities of economic collapse, but from the subsequent struggle for survival of the bureaucracies that brought it on.

There is no substitute for gold to that end, and current gold prices make it possible for those of even modest means to do so.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 15, 2011 – Unemployment is down, fears of inflation have not materialized, and the gold price is only inching higher – what more proof do we need that the economy has recovered? Until the facts prove otherwise, all I see in the figures is a false recovery.

Look at the unemployment statistics. The raw data is impressive – some quarter million new jobs added last month – but as usual the numbers are deceptive. A more revealing figure is the ‘U- 6′ unemployment rate, which “accounts for people who have stopped looking for work or who can’t find full-time jobs,” says Phil Izzo in the Wall Street Journal. “That rate … still sits at 15.9%.”

Another way to look at unemployment is the percentage of the population that is working or is looking for work – the labor force participation rate. That rate is the lowest it has been since 1984, almost two percentage points below the 10-year average. If it were at the average unemployment would be 11.5%.

Furthermore, nearly a third of the unemployed have been out of work for more than a year, the greatest percentage on record by a significant margin. “It should come as no surprise if the [unemployment] rate starts to stagnate or even to rise slightly as an improving job market draws workers back into the labor pool.”

As for inflation, investors have been lulled into complacency by the extended period of low interests rates. But “Investors ignore inflation at their own peril,” says Morningstar’s Christopher Benz in an AP interview. “Not many [mutual fund] managers spend a lot of time thinking about the macroeconomic environment … Instead, most hew to a specific style. That means investors who want to ensure their portfolios have insulation against inflation should take steps to put it place themselves.”

The time to take those steps is now, while the false recovery is holding back the price of gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 05, 2011 - There is something fishy going on with current gold prices. Just when all indications are that the long awaited breakout has begun, stocks and Treasuries mysteriously rebound after some new sign that the “recovery” is gaining momentum.

In MarketWatch Peter Brimelow reports this from The Gartman Letter: “Someone … or something … has kept a virtual lid on the gold market … and has certainly been at work for the past two weeks making certain that gold does not push upward.” More precisely, forces are at work keeping the dollar artificially high.

The dollar’s rise to dominance met little resistance simply because of the sheer magnitude of the US economy. With a hefty majority of international transactions originating in the USA and unequaled availability of instruments to hedge against unfavorable exchange rates, it was naturally most convenient for companies and even nations to conduct business in dollars.

The size of the economy also insulated the dollar from economic shock and earned its reputation as the premier safe haven. The historical stability of US Treasury securities made them the most important asset traded by international investors. Over time nations around the globe grew ever more heavily invested in America, Inc., which they now see as too big to fail. Just yet.

The dollar still exists only for the lack of a viable alternative. But this is no time for complacency. We were blindsided by China’s meteoric rise as an economic power and there is no mistaking their intention to have the yuan usurp the role of the dollar as a reserve currency. The euro, too, is gaining ground as the zone’s more rational fiscal policies promise to make “E- bonds” an appealing alternative to Treasuries.

Foreign interests have begun a gradual divestment of US sovereign debt while stocking up on gold. It behooves them to keep a lid on gold prices as it behooves the individual to take advantage of them doing so.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 02, 2011 – More and more states are rethinking legal tender as the price of gold climbs against an ever weaker dollar. Article I, Section 10 of the United States Constitution prohibits states from making “any Thing but gold and silver Coin a Tender in Payment of Debts," and that has a growing number of states considering ditching the dollar and going for the gold.

Georgia House Bill 3, known as the "Constitutional Tender Act," was introduced because “sound, constitutionally based money is essential to the livelihood of the people of this state and the stability and growth of the economy.” The bill will “require the exclusive use of gold and silver coin as tender in payment of debts by or to the state.” Furthermore, “Federal Reserve Accounting Unit Dollars, having no redeeming value in gold or silver coin, shall not be made a tender in payment of debts by the state.”

The bill further states that all banks and lending institutions charted by the state or doing business with the state “shall offer gold and silver coins minted by the United States to, and shall accept them for deposit from, the state and other customers.”

In New Hampshire, legislative service request 2011-H-0684-R urges “legislation against losses in value due to money supply by the federal reserve; restoring gold and silver money; and phasing out the federal reserve system.” A widely used template puts it even more bluntly: “Many widely recognized experts predict the inevitable destruction of the Federal Reserve System’s currency through hyperinflation in the foreseeable future.”

So far 13 states are moving to hedge against the inevitable end of the dollar by switching to real money, and the rest will certainly follow. How high that will drive the price of gold remains to be seen, but some of the wildest predictions are now looking very realistic.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

March 1, 2011 – As if the surging prices of food and oil weren’t enough to drive up the gold price, now iron has joined the club. In fact, it is only a matter of time before every single ingredient of an expanding global economy reacts to growing demand and lagging supply.

That won’t be a problem for economies that are keeping pace, but it could be the death blow for those that are languishing. And here in the USA the “news” is that growth will be slower than expected due to cuts at the state and local level. That, of course, is news only to Bernanke and Company, who have lost all touch with the world the rest of us are living in.

As reported in the Wall Street Journal, Ken Fisher, chief executive of Fisher Investments, “thinks the U.S. economy has recovered enough that it can handle the impact of higher oil prices." And Fisher says that “when the economy's stronger, we use more gasoline and we buy more things from Tiffany at the same time."

While Bernanke’s cronies are shopping at Tiffany, however, most Americans are struggling to foot the bill for bailing them out. Rapidly rising commodity prices may be a nuisance to them, but they are devastating to the average American who is trying to subsist on ever weaker dollars.

It might be easier to take if that were all out of ignorance and not a matter of self-serving deceit. But Paul B. Farrell says in Market Watch, “Behavioral science tells us that bankers and politicians are lying to us 93% of the time. It’s 13 times more likely Wall Street is telling you a lie than the truth. That’s why they win. Why we lose.”

It’s time to stop listening to the lies and let the price of gold speak the truth.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 28, 2011 – Worries over runaway oil prices have handed Wall Street it’s third consecutive daily decline and caused the dollar to fall – both good indications that the gold price is in for another rally.

Historically oil prices have not been a reliable indicator for the stock market because when the economy is strong it can absorb price spikes in oil. And risk-off situations such as current events in the Middle East used to send global investors to the dollar. But things are quite different today.

The average American’s tightly constrained discretionary money is reduced with every increase at the gas pumps, diverting cash away from retail purchases. That puts a damper on manufacturing, which in turn slows hiring and prolongs the unemployment crisis and so-called recovery. “A spike in oil prices to $130 a barrel would lower U.S. industrial-production growth from roughly 5% annually to about 4%,” says Kelley Holland in the Wall Street Journal. The cost to American consumers of $100 billion would consume almost all of their gains from income tax reduction.

As for the dollar, it’s the Fed’s policies that are driving investors to greener pastures.

There is little chance that the Fed, which totally disregards energy costs when calculating inflation, will allow interest rates to rise “with economic indicators like new home sales, jobless claims and durable goods orders, all released today, pointing to a slow, uneven recovery with little job growth,” says Holland. Europe, however, bases their calculations on the more realistic headline inflation and will likely raise rates in response to escalating oil prices. Higher rates make currencies more appealing to investors. America’s high energy intensity also puts the dollar at a disadvantage to oil exporters, such as Canada.

It is just one more sign that the dollar no longer reigns supreme, and that the price of gold will continue to climb.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 25, 2011 - Federal spending, which Peter Brimelow of MarketWatch and ESR Research president Ed Rubenstein term “Government grab,” and its relationship to federal revenues, or “tax take,” has a lot to do with current gold prices.

The fiscal-year 2011 federal deficit is expected to be “far higher than the deficits run . . . during the Depression and in the early 1980s. In fact, it’s over a third as high as the deficits run during World War II.” At 23.5% of GDP, the government grab is now the highest ever during peacetime. When you add in the 11.2% of GDP represented by the states’ deficits, government grab accounts for more than a third of our GDP.

We have survived far greater deficits in the past without hyperinflation, the most notable instance being that which followed WWII, but that situation was vastly different. The government financed the wartime deficits by borrowing, much of it through domestically held debt. Inflation spiked in the three years following the war but quickly dropped and in the booming post-war economy the government had little difficulty drawing down the debt.

The current deficit, however, is financed with monetization in a stagnant economy. That has been tried before, and despite deficits that were but a fraction of today’s the consequences were none-the-less ruinous.

It comes as no surprise that with the second heaviest trading of the year the Dow just suffered its worst single day loss since late last summer. “All but three of the Dow’s 30 components finished in the red,” says Kate Gibson in MarketWatch, and “for every stock that rose, nearly seven fell on the New York Stock Exchange.”

According to Sam Stovall, chief investment strategist at Standard & Poor’s, we are “at the crossroads of a correction or the start of a new bear market.” Either way, that’s good news for the gold price.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 23, 2011 – If the price of gold in the USA is any indication, American investors are still buying into Bernanke’s Great Deception. The Fed’s stranglehold on leading economic journals biases scholarly opinion, but sooner or later common sense has to prevail.

Jerry Robinson, well-known Christian economist and author of Bankruptcy of our Nation, reports that “in 2010, gold demand soared by 20% while gold production rose by 3%,” a sure sign that “gold is moving headlong towards higher prices in the future.” The crisis in states and municipalities is only fanning the flames.

Congress has been adamant that there will be no more bailouts, even for state and local governments. Congress’ refusal of aid, however, threatens to topple the $2.8 trillion municipal bond market. But that pales compared to what Martin Weiss, long-term investor safety advocate, labels “The most dangerous bubble of all – the bond bubble.”

“The most obvious sign of a bubble is when asset prices are artificially driven higher by misguided government supports, subsidies, bailouts or sheer greed and stupidity,” Weiss says. “Since 2000, one of the most frequently used and abused policy tools of the Fed has been to cut rates and artificially bubble up bond prices.”

“Most investors, including the banks and insurance companies,” Weiss says, “aren’t paying attention” to soaring commodity prices or to money supply and inflation in emerging markets. But when it finally catches their attention “an instant bond market bust is the likely outcome.”

Weiss adds that foreign investors now hold 60% of US federal debt, and they aren’t pleased to see their dollars cheapened as the Fed irresponsibly prints up gobs of unbacked currency. They are certain to dump their holdings “when the dollar collapses, driving down bond prices and raising interest rates.”

The gold price may be in doldrums, but when this latest bubble bursts the wind will billow its sails.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 18, 2011 - The economic crisis is more correctly an entitlement crisis, for unless we address that basic issue the price of gold against the dollar will go through the roof.

With states across the nation going belly up, thanks in large part to unrealistic health and retirement entitlements for their employees, I doubt the unions are going to find much sympathy for their current public tantrums. New Jersey Governor Christie has bluntly told the unions that for decades they were lied to about what benefits the state could afford to provide. They were duped, but rather than accepting that and moving on they are crying foul and demanding that their states pay up.

That’s the problem with entitlements. People start believing that they deserve things that they didn’t earn. So let’s get back to basics. There are only three entitlements in America: life, liberty, and the pursuit of happiness. The purpose of government is to ensure those basic rights – no more and no less. We are given the liberty to pursue happiness as we see fit, but there are no guarantees and we must accept the consequences of our choices. We are not entitled to any part of anything that somebody else has achieved or acquired.

The concept behind Social Security is in the name itself: a safety net that ensures we have a roof over our heads and healthy food on our plates. If we are able to work then work we must. We should ask the government to supplement what we earn only to enable our survival. It owes us nothing more.

Social Security is but a Ponzi scheme that has run it course. We must take responsibility for our own futures. There is no better way to do that than by taking strong positions in gold before the price of gold exits the current dip and resumes its climb.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 16, 2011 – The dollar has had its day, and as it fades into history along with all of the other great currencies of the past, the price of gold will again become the standard of wealth in America.

The IMF and World Bank agree that the dollar’s reign as the world's reserve currency is over, and that there is an urgent need for a replacement. CNN Money says that “the goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to swings in the domestic economy and changes in US policy.” And we can thank Bernanke’s disregard for the dollar’s impact on other economies for there being a need for such action.

The IMF sees a role for special drawing rights (SDR) – instruments that “can be converted into whatever currency a borrower requires at exchange rates based on a weighted basket of international currencies” - in stabilizing the global monetary system, and the World Bank is looking for ways to incorporate gold. Interestingly, against the “weighted basket” of currencies the gold price tends to be stable.

The wanton running of our printing presses is fomenting global ire as dollar dependent commodity markets fuel global inflation. Many countries that have tied their currency to the dollar are now desperately seeking divorce. As the global economy weans itself off from our currency, reinstituting real value into the dollar will be the only way to ward off hyperinflation. But there is no way that will happen without a fundamental change of thinking in Washington.

Throughout history currencies have come and gone; few have lasted more than a century. Fiat money as a class, and the dollar in particular, are relics that have no place in global economics. In the very near future we will see the gold price resume its role as the global standard.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 14, 2011 - If you want to know the future of gold prices, pay close attention to China. That country has just passed Japan and is now the second largest economy in the world. And we are in its sights.

There is no secret how that country managed to increase its GDP tenfold in 16 years while fostering the growth of other emerging Asian economies. They have a goal and a plan to reach it. And they are not encumbered by a political system that squanders its wealth on meaningless endeavors.

I would never suggest their form of government is superior to democracy, but it is a whole lot better equipped to get a job done than one in which the decision makers are swayed by big money special interests and reality is continually spun just to get them reelected. Instead the Chinese government can act swiftly and decisively to control its economy without regard for the popularity of its actions.

Interestingly, one of the most unpopular positions the Chinese government has taken is coming under a great deal of domestic fire lately. “Most of China's $2.85 trillion in reserves is invested in dollar assets,” says the Wall Street Journal. The Chinese people are growing increasingly concerned about that, and in particular the hundreds of billions of debt tied to Fannie Mae and Freddie Mac.

Lu Zhengwei, a senior economist at China’s Industrial Bank Co., says Obama’s guarantee to pay back Fannie and Freddie securities is almost impossible "looking at the current political situation in the U.S." While the government maintains that no money has been lost on those assets, it is still encouraging strong gold investments.

China knows how to survive our government’s fiscal irresponsibility: they will see to it that the price of gold keeps their dollar investments safe.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 11, 2011 – The last time the stock market tumbled the historic run in the price of gold went into high gear. Now that the Fed has got Wall Street back on its feet the traders are up to their same old tricks. They have placed their bets, jacked up the price of toxic assets, and are licking their chops as small investors (aka suckers) are once again testing the waters.

“Impressive as the stock market’s surge has been,” say an AP release, “it’s nothing compared to a small number of . . . stocks of the riskiest, most indebted companies.” Companies most in danger of default have beaten the S & P by eight points since January of last year and those with the highest PE ratios returned 12% more than that. Most telling, however, is that the stocks of companies most active in short sales have returned a solid 32%.

The casino is in full swing and is looking for more pigeons. Small investors, who historically get the fever too late in the game, are getting intrigued. Although once in a blue moon a long shot will pay off, so soon after the last debacle one has to suspect that something is rotten in the state of Denmark.

Most of those stocks are vastly overvalued losers; their prices have been inflated with Bernanke’s play money for the sole purpose of duping the average American. “As small investors edge back into the market, the danger is that they will buy these high flyers just as the trend breaks,” which, of course, is the whole idea. When gullible amateurs stampede the market hoping to cash in on the next big thing the equities quickly tank. Insiders who bet on that rake in the pot.

The economy isn’t going to recover and the gold price won’t level out until the rigged casino gets shut down for good.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 09, 2011 – Slowly but surely concerns about inflation are heating up, and when it reaches the flashpoint gold prices will shift back into high gear. The signs of impending global inflation are mounting and both voting and non-voting members of the Fed are voicing their opposition to any further stimulus. Many are expressing doubt that the Fed can mop up the flood of cheap money already out there, let alone another $600 billion. Bernanke, on the other hand, keeps strutting about the stage in his Theater of the Absurd.

Although Mr. Bernanke has no truck with the notion that food and energy prices are inseparable from the cost of living - and by extension, real inflation – UN warnings about dangerously escalating food prices have put him on the defensive. Bernanke claims the problem is not with the dollar but rather with growth among the emerging economies. That is simply ridiculous.

The food index is notoriously volatile, but over the last two decades the average deflated annual rise has been around 3.5%. From 1990 to 2006 the index rose less than 10.5%, but since 2006 it is up more than 69%, and that includes an 18% drop in 2009.

Nothing very dramatic has changed in the growth of emerging economies since 2006, but as the credit bubble expanded food prices rose at nearly twice the previous record yearly rate and when the bubble burst they dropped at a record rate. It would seem that the dollar has quite a bit to do with food prices. And since the Fed announced its plan of quantitative easing last summer, the deflated index has risen a mind boggling 87%.

Inflation isn’t coming, it is here – and 1.5 trillion Bernanke bucks has a lot to do with it. Thankfully, in terms of the gold price, food and energy are holding steady.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 07, 2011 – The price of gold is a clear indication that America, once the shining example of capitalism, is now fighting capitalism’s natural progress. We are not experiencing a crisis in capitalism as many are saying, but only the natural evolution of the system as it adapts to a changing world. Economist Joseph Schumpeter called the process “creative destructionism,” where the old must constantly be torn down to make way for the new.

“Schumpeter’s concept . . . is as relevant to government as it is to industry; we cannot emerge as leaders in the new global order without first tearing down the obsolete structures that stand in our way,” says Thomas Stevens in the Entrepreneurial Element blog. But our government has been steadfast in its policy to resurrect failed structures, in the process wasting trillions of dollars that would have been better spent on starting over. “Such folly could cost us dearly when we at last come to the realization that we must reinvent ourselves in the context of globalization,” Stevens says.

“According to a McKinsey study, global investment is expected to jump from $11 trillion this year to $24 trillion in 2030 - with most of the money going to market economies that didn't even exist 30 years ago,” says Bill Bonner in the Daily Reckoning. “Emerging markets have grown 85% in the last 5 years, while mature markets have been flat.”

The reason for that is simple: the more successful an industry – or government – is, the more complacent it becomes, opening the door for the more aggressive and innovative to move in. We had our chance to let capitalism claim its victims and move on, but instead we chose to interfere.

There is no crisis in capitalism, just a failure to follow its lead. And the price of gold is a constant with which we can evaluate the direction we are taking.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 05, 2011 – The price of gold has always been a reliable barometer of what actually is going on in the economy, but Bernanke insists on living in his own little world. Brushing aside growing global concern over his policies, Bernanke has been making it abundantly clear that he has no intention of backing away from monetization, which he claims is moving us forward.

By “us,” apparently, Bernanke means Wall Street. He directly equates the wellbeing of Americans with stock market performance, pointing with pride to a rallying market as evidence of his policy’s success. The 22% of the population that are the real unemployed (according to Shadow Government Statistics) might think differently, as would those on fixed incomes who have to choose between eating and keeping warm.

However, Bernanke can rightfully claim a part in the stock market rally through his pumping mountains of dollar debasing cash into the system. The Financial Times reports that the Fed is now the largest holder of US debt, having surpassed China, and by June it will likely hold nearly as much as China and Japan combined. Bernanke claims he is not just printing money, but consider this:

One government agency, the Fed, prints money for which another government agency, the Treasury, issues a debt security. Until those dollars are physically destroyed the government holds both the cash and the negotiable securities against that cash. No matter how you slice it, that’s doubling the cash just by firing up the presses.

With many sovereign debt crises worse than our own, it is not surprising that Bernanke’s policies would appear to be working in the short term. As Europe hammers out a more rational and responsible monetary policy, however, the Euro could well surpass the dollar as the preferred reserve currency.

How high must the price of gold go against the dollar before Bernanke wakes up?

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

February 02, 2011 – Wall Street pundits go to great lengths to put a negative spin on current gold prices. For more than a month they have harped on the decline as a market correction, unabashedly declaring gold’s support level to be anywhere from $1200 down to $1000. When the stock market cycles low following a significant breakout, however, they call it a retest. There’s a lot of difference between the two.

From time to time large investors retest long running bull markets by selling off assets. If the price falls below the support point they conclude that the market was overvalued and the selloff continues – that’s a correction. If it doesn’t, however, they reinvest and the rally resumes.

Well, it looks like once again the gold bears jumped the gun. By every indication gold has bottomed out at a support point far above their claims, and the big boys are coming back. SPDR Gold Shares, for example, gobbled up over 3 metric tons of bullion – nearly 100,000 ounces – this week.

I wonder how Wall Street would explain away what Jordan Roy-Byrne, CMT, predicts in the Resource Investor: “In the next year there is a good chance that we’ll see stocks and bonds in a bear market, simultaneously for the first time since the late 1970s.” Throughout the 11-year bull market in gold, with a few notable exceptions, “mainstream advisers and managers could avoid precious metals and still generate reasonable returns.” But if stocks and bonds join real estate, there would be but one asset class to turn to – gold.

Only 1% of global investment is currently allocated to gold, which leaves enormous headroom for market expansion. Because “markets tend to follow a retest with at least several years of acceleration to the upside,” gold bears will have to eat crow or watch their fortunes go up in smoke while the gold price climbs.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 31, 2011 – I don’t put much stock in short-term patterns in the gold price for the simple reason that past events happened under circumstances that rarely have any relevance to conditions today. There is one, however, that seems to be independent of changing times and is more a reflection of the varying mood of gold investors - the McClellan cycle.

In a post on Seeking Alpha, Prieur du Plessis discusses comments from Richard Russell, author of the Dow Theory Letters, that help put the gold bears’ propaganda about a major correction in the price of gold into perspective.

The McClellan Market report, which is noted for its research on cycles, has identified a cycle low in gold prices that repeats like clockwork every 12 and one half months, independent of current gold prices even in a bull market. The next predicted low should occur in mid February, as “many traders have traded out of their gold positions, just as we near the date for the McClellan cycle bottom.”

That low marks an ideal time to invest in gold. Asian economies are continuing to bolster their gold reserves and safe-haven investors are certain to return to gold as data prove economic recovery is merely an illusion.

The long-term projection for gold remains unchanged. We as Americans have yet to accept the brutal fact that we no longer control the puppet strings of the global community. We can fail and the world will survive. The dollar is no longer sacrosanct, and ultimately the global monetary system will have gold as its cornerstone.

Until the government puts its arrogance aside and musters the courage to do what must be done to restore our position as global leader, the gold price will continue to rise against the dollar. Look at the gold price charts for the past five years – the McClellan cycle lows are easy to spot.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 28, 2011 – Those new to the gold market might see the first-of-the-year slump in gold prices as a sign that the bull market is coming to an end, but nothing could be further from the truth.

In fact, the slump is normal say Claudia Assis and Deborah Levine in MarketWatch. In six out of the past ten years the lowest point in gold prices came in January and February. This year, however, has been somewhat unusual in that investors appear to be buying into the propaganda about economic recovery.

The sustained selloff can be directly attributed to fears of rising interest rates and the belief that the worst of the economic crisis is behind us. But there is no indication that the Fed will back off it’s policy of holding interest to near-zero and “a surprise decline for durable-good orders” is adding to an already grim economic outlook.

The New York Times reports that “the long-predicted double-dip in housing has begun with cities across the country falling to their lowest point in many years.” And the expectation is that foreclosures won’t reach their peak until 2012.

An AP release adds “Layoffs have slowed dramatically . . . but hiring has yet to pick up.” Even the Labor Department’s sugar coated statistics reveal that the unemployment rate increased in 20 states and held steady in another 15.

Jobs and homes are the source of wealth for the great majority of Americans so I can’t see where the economy is recovering. Bernanke recently pulled some numbers out of his hat and predicted a growth of 3% to 4% in the GDP this year. Even at that, with an estimated deficit of 10% of GDP we will still fall backwards by 6% to 7%.

The slump in the gold price will end soon as smart money moves in to buy at market lows before investors return.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 26, 2011 – Whenever I feel the need for a reality check I go back to the gold price trend, and I certainly needed one last night. Call me delusional, but I had hoped to hear something new – from either side – but instead I just got bit on the left leg by the administration’s dogma and on the right leg by the opposition’s.

Not once did President Obama or Rep. Paul Ryan mention the most pressing and immediate threat to the economy – the insolvency of our states. Obama declares victory in 300,000 “teachers and other education workers” being reemployed, but the jobs of millions of others are in peril as states slash their budgets. All of the so called “investments” (a.k.a. spending) cannot elevate state incomes fast enough to prevent economic collapse.

Ryan says that our “day of reckoning” is “around the corner,” but for a vast number of Americans living in some of our largest economic centers that day is already here. Ryan succinctly states the cause of the problem, pointing the finger at “poor decisions made in Washington and Wall Street that . . . squandered our savings, broke our trust, and crippled our economy,” and at “a federal government that controls too much; taxes too much; and spends too much in order to do too much.” He also underscored the self-evident truth that “endless borrowing is not a strategy.” He had my attention and I was waiting for some sort of plan of action when he did just Obama did – started waving the flag.

That’s not good enough. Somebody has to stand up and say “We are in critical condition on life support. Either we take our bitter medicine right now or they will pull the plug.” That’s reality. That’s what I see in historical gold prices. And I expect to see historic gold prices in the days to come.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 24, 2011 – Gold prices are a pretty good indication of how well different nations are recovering from the recession and by that measure none of the western countries are doing very well. If European Central Bank President Jean-Claude Trichet gets his way, however, that should change.

According to the Wall Street Journal’s Brian Blackstone and Marcus Walker, Trichet has the radical notion that “budget austerity and vigilance in the face of rising energy and commodity prices are the best path to economic recovery.” In other words, the quickest way to solvency is to stop spending. That makes a lot of sense to me, but the IMF disagrees and the UN says that “the impact of fiscal austerity planned or under way risks a renewed economic downturn.”

Trichet, however, does "not buy the very simple reasoning that would suggest that pursuing sounder fiscal policy would hamper growth." Neither do I. In fact, I cannot see any possibility for recovery until governments at all levels grow up and learn to live within a budget. Trichet believes that doing so actually accelerates recovery by "improving confidence of households, enterprises, investors and savers.”

The Fed, of course, is not budging from its stand. Food and energy prices are soaring but “Fed officials don't see much evidence that commodity price pressures are feeding broader inflation in the U.S.” Europeans, however, know that food and energy are very significant to the cost of living, and that is what determines real inflation.

Trichet has his feet firmly planted on the ground and is prepared to raise interest rates and enforce austerity to ensure recovery. The Fed, on the other hand, doggedly pursues recovery through even greater spending.

If Trichet is successful implementing his plans then my bet will be on Europe, and as gold prices moderate against the Euro they will skyrocket against the dollar.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 21, 2011 – Gold prices are sensitive to short-term economic news because only a tiny fraction of global financial wealth is held in gold, and most of that is in short positions that are highly reactive to current events. However, long position safe-haven investments are set to experience explosive growth.

“Gold bugs” are often derided as paranoid for their doomsday scenarios, but that will change. Catastrophic failure of our infrastructure becomes more likely each day that urgent repairs are delayed for lack of funding. States, buckling under unserviceable debt, are placing ever greater burden for maintaining infrastructure onto counties, cities, and towns while drastically cutting their funding, driving local governments into default. According to Meredith Whitney, a highly respected Wall Street analyst, it will take only 50 to 100 sizeable defaults to seriously disrupt the municipal bond market, triggering an unstoppable chain reaction.

This is not some remote possibility. Last year Newark, NJ was forced to cut its police force by 16% and now Camden has laid off 45% of its police, one third of its firefighters, and over 100 other municipal workers. With no other recourse vigilantes have been called in to help maintain order. The problem will snowball and soon even healthy local economies, unable to issue municipal bonds, will be driven to take similar Draconian measures.

It takes little imagination to envision a future of social disorder and marginal, if any, services. According to a growing number of experts such a future is not only inevitable, it will be necessary before America can rebuild. And gold possession will be necessary to ensure we have the wealth we will need to do it.

As America wakes up we can expect a strong upsurge in long gold positions that will stabilize the price around its moving average. Until then, we can all profit from the dips in the daily gold prices.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 19, 2011 – Gold prices have had a rocky start this year due to a lot of hoopla about the stock market, but two recent articles put that into perspective.

Dave Kansas in SmartMoney.com, lists “5 Reasons to Still Like Gold”. The first is inflation – something the Fed really wants despite its insistence to the contrary. The European Central Bank echoes the Fed, but it too “has maintained an array of extraordinary programs in a bid to keep the economy moving ahead.” And politicians here, in Europe, and in Japan know that they can make electorate believe that deficits disappear with a wave of the magical inflation wand.

Currency devaluation goes hand in hand with inflation – when a currency depreciates relative to others, sovereign debt falls and trade balances diminish. But it can’t work when the US, Europe, and Japan are all trying to use the ploy. Voices around the globe are crying foul and threatening all out trade war.

On the other side of the issue, the Wall Street Journals’ Brett Arends warns us “Don't Get Carried Away by the Market Rally,” because “stock-market fever is one of your biggest enemies as an investor.” Arends’ overarching message is to not be reactive with investments.

Investors heat up with short term good news, but the “urge to buy shares after the stock market has risen has nothing to do with the economic outlook or investment risks . . . It's pure instinct.” “Who cares about next quarter's earnings” when only 25% of the market’s value is accounted for by the next decade’s profits?

Arends concludes that “plenty of data suggest that shares are on the pricey side, and that long- term returns from these levels may well prove disappointing . . . There is no urgency. Over time, disciplined investing beats short-term speculation.”

As the year progresses, gold prices will bear out that sage advice.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 17, 2011 – Inflation is certain to drive up gold prices, and higher interest on our debt is certain to spark inflation. While the government does its best to assure us that it is holding inflation at bay we are inching ever closer to a credit downgrade.

Last November China’s first domestic credit rating agency, Dagong Global Credit Rating Co., downgraded its US rating from AA to A+ due to QE2. According to Dagong, “The serious defects in the U.S. economy will lead to long-term recession and fundamentally lower the national solvency . . . The credit crisis is far from over in the United States.” Analysts were quick to debunk the report and the credibility of Dagong in general, but we cannot afford to underestimate its significance in China, which holds the lion’s share of foreign held US debt.

We also cannot afford to ignore the warnings of Moody’s and S&P that unless the government takes action to lower its debt they too will downgrade our rating. Mark Gongloff, Mark Brown and Nathalie Boschat report in the Wall Street Journal that “the likelihood of a negative outlook over the next two years will increase," according to Sarah Carlson, senior analyst at Moody's.

Thanks to the European sovereign debt crisis little attention is being paid to problems here at home. But we cannot rest on our laurels forever. "The view of markets is that the U.S. will continue to benefit from the exorbitant privilege linked to the U.S. dollar. But that may change," says Carol Sirou, head of Standard & Poor's France.

A drop in credit rating means higher interest on debt. In the US the debt spiral is overdue. Inflation is inevitable, as is the continued escalation of gold prices.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 13, 2011 – Wall Street is turning up the heat to hold back gold prices but it can’t go on for long. Individual investors are getting wise to the rigged stock market game and Facebook’s recent so-called “IPO” is just one more example of how Wall Street insiders skim the cream off the top before investors are even let into the game.

In an article in the Wall Street Journal, Europe, L. Gordon Crovitz gives a refreshingly unbiased look at our government’s complicity with Wall Street Traders. The Facebook offering, which was made available only to “the wealthiest private clients of Goldman Sachs . . . should be a wake-up call about how regulations have undermined public markets,” Crovitz says.

The stock market was intended to provide all investors with the same information, opening corporations’ books so everyone can assess their performance and judge for themselves whether they merit investment. Private equity, however, chokes off the flow of information, “making it likelier that prices are wrong, letting bubbles brew.” And Crovitz puts the blame squarely on Washington’s shoulders.

After the dot-com bubble burst the government passed the Sarbanes-Oxley Act in 2002, which under the guise of bringing companies such as Enron under tighter scrutiny succeeded only in shutting down the IPO market. To comply with the act new ventures must divert vast resources away from vital operations, making the IPO unfeasible.

Private equity, however, is exempted from Sarbanes-Oxley, offering a far better option to corporations seeking capital to take their business to the next level. But that is where the real money gets made. By the time the company eventually goes public the best investors can hope for is a share in the profits.

“Now that Washington has defriended investors, the would-be investing public should defriend the politicians who took away their markets.” Good advice that will keep gold prices strong.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 10, 2011 – What does the price of gold have to do with getting old? At the rate that America is aging Medicare and Social Security are severely underfunded, but to politicians the mere mention of Draconian measures to save the programs is taboo. If we don’t find a solution to the funding problems there can be no economic recovery. It’s that simple. Consider Medicare.

Contrary to popular opinion the percentage of the population over 65 actually declined between 1990 and 2000, according to census figures. But those same figures reveal a much bigger problem for Medicare. While the general population increased by 13.2%, those 75-79 grew by 21.1%, 80-84 by 25.7%, 85-89 by 35.4%, 90-94 by 44.6%, and those over 95 by a remarkable 34.7%.

People are receiving benefits far longer than was anticipated when Medicare was enacted. Furthermore, the cost of medical care rises exponentially as recipients require more frequent and more expensive medical services – many of which were not even in existence when the program began. As we might expect, the government has tried to minimize the problem. According to Geoff Colvin of Fortune Magazine, the government forecasts for Medicare assume a reduction in payments to doctors of 41% over the next 9 years. Since doctors are not required to take Medicare patients, that’s not going to work. Applying the accounting methods required of pension funds, Colvin calculated that Medicare is underfunded by $34 trillion without the reduction.

As usual we can’t count on Washington to make the tough decisions. We also can’t count of future generations to bail us out. That leaves it up to us to prepare for the day when Medicare disappears.

Gold investment is one good way to do that. Until our government gets fiscally responsible, the gold price has no where to go but up.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 06, 2011 – Gold has had a bumpy ride starting off the new year, but that is just good reason to get in on bargain gold prices. In less than one week we seen equities bounce around in step with conflicting reports about unemployment and retail sales. It is like 2010 rolled up into a few days.

The underlying problems of the economic crisis did not go away when the ball dropped in Times Square. Consider unemployment. The problem is that there are different types of unemployment and each tells a different story.

Typically we hear about cyclical unemployment, which more or less follows the business cycle of supply and demand. When recession causes a protracted period of high unemployment, however, frictional unemployment compounds the problem.

Frictional unemployment occurs when there is a mismatch between what workers have to offer and what jobs demand. The more people there are seeking work, the fussier employers become. Unemployed professionals are particularly hard hit either by being rejected as overqualified or by being hired into positions well below their skill level. Both situations seriously harm the chance of working at their previous level when the economy recovers.

At that point they fall into the ranks of structural unemployment, joining workers with obsolete skills and those who are left behind when major industries leave a region, for two examples. A credit rating ruined while trying to survive unemployment may be all it takes to brand a worker unemployable.

Current government policy addresses only cyclical unemployment but even a healthy recovery will do nothing for the bigger issue of pandemic structural unemployment.

The problems facing us cannot disappear with a quick fix and no degree of optimism can change that. We can expect the gold price to continue its long-term upward trend throughout 2011.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 04, 2011 – Anybody who has been watching gold prices and wondering what why their cash investments are doing so badly should take the time to make a simple calculation of real inflation. Look at how much the cost of basics – groceries, fuel oil, gas for the car and such - has gone up over the past year. See if you agree with the government that they haven’t gone up one bit.

The government has a good reason to fudge the numbers: it saves them billions in cost of living increases for employees and Social Security recipients. It also rationalizes the Fed’s ridiculous policies that are bleeding most Americans dry in order to feed Wall Street’s greed.

Zero inflation is one of the Fed’s strongest arguments for holding interest at zero, the most transparent result of which is that returns on cash investments have plummeted to next to nothing. That is just what Wall Street hopes will lure Americans away from cash and into speculative investments. But for insurance there’s a more insidious ploy.

Despite claims that QE2 would bring down long term interest rates the effect has been the opposite. As a result the housing market is in for another very bad year. Because Americans with incomes under the top 10% have 60% of their wealth tied up in their primary residence, Wall Street hopes that declining housing prices will be an even stronger incentive to speculate.

They have rigged the game well, but one thing that the Fed and Wall Street have not been able to manipulate is the gold price. They have made considerable effort to convince us that gold is the real speculative investment and that gold’s strong and steady growth cannot be sustained, but the market continues to call their bluff.

It’s the government’s gimmicked numbers that aren’t real. Gold prices tell it like it is.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

January 3, 2011 – If the worst happens and the stock market collapses as many predict it will, what will happen to gold prices? Although nobody can say for sure how such a calamity would play out, history tells us what we can expect.

This scenario is just one of several possibilities for systemic failure, or total disruption of the economy. Initially all asset classes would post dramatic losses as investors liquidate their holdings. Gold, however, would quickly rebound as hyperinflation, which typically follows on the heels of a systemic failure, sends people rushing to gold as a stable currency.

We have never before faced problems like those we face today, even in the Great Depression, and it will take extraordinary measures for the economy to survive. Success can come only at the expense of many things that we have always considered to be non-negotiable, and even Social Security and Medicare are on the table. We are a very resilient people who are capable of bearing the heaviest burdens to ensure a future for our offspring, but to do so while the fat cats keep getting fatter is another story altogether.

Reports of the top five Wall Street firms handing out $90 billion in bonuses this year while some 25% of us can’t find a job that pays even close to our worth is just the sort of thing to make us dig in and wait for their comeuppance. And taking up positions behind bulwarks of gold will surely bring sweet revenge.

Comparatively speaking, the top 1% are only marginally invested in gold and will remain so for as long the government subsidizes the Wall Street casino. But when the next gold rush commences and gold prices soar, wealth will flow from their coffers back into those who had preemptively invested in gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 29, 2010 – In the end-of-year market doldrums, a time typically marked by selloffs, gold prices are finishing surprisingly strong. The explanation for that lies in open interest.

Open interest simply represents the number of futures contracts that remain open at the end of a trading day. When open interest increases that means investments are flowing into the market. Tuesday’s increase in open interest of nearly 3.5% over Monday with only light trading represents an enormous amount of new investment.

Clearly investors are taking the government’s feigned optimism and Wall Street’s rosy projections with a grain of salt. Quite possibly we are witnessing the dawn of America’s awakening to the seriousness of the debt crisis. As NJ governor Chris Christie says, “The day of reckoning has arrived.”

As governments from the town on up to the nation buckle under unsustainable debt, interest rates will escalate in pace with risk. At some point something has to give, and the first thing will likely be infrastructure.

The lifeblood of our country is the power flowing through a vast network of transmission lines called the grid. But that network is highly dependent on obsolete equipment that is well past its meantime for failure. The entire grid is in peril and already many sections of the country have unreliable power more like what one would expect in third world nations. If we don’t fix the grid soon we will face unthinkable consequences. But that would cost $1.75 trillion, and we just don’t have the money.

Repairs to infrastructure require borrowed money, so one of the first signs of collapse will be rising municipal bond rates as defaults begin to mount. When that happens the growing numbers of gold investors will become a stampede. It would be wise to invest at today’s gold prices before that happens.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 27, 2010 – We talk a lot about movements in the price of gold, but only because most people assess value in terms of currency. To understand how that has the relationship between currency and gold backwards we must first distinguish between currency and money.

Modern currency is merely a convenient means of keeping score and has no intrinsic value. Money, one the other hand, has value in and of itself that is consistent and accepted among all who exchange it for goods and services. For centuries gold has served as money, transcending all social and political boundaries.

It would be more accurate, then, to express the price of currency in terms of gold. When the gold price is $1000, for example, that really means that the dollar is worth 1/1000 ounce of gold. And an increase in price to $1400 means the dollar fell to 1/1400 ounce of gold. Instead of the gold price going up 40%, the dollar fell about 29%. We can learn a lot by pricing things in gold. For example, while the inflation adjusted price in dollars of a basic subcompact car in 1970 is essentially the same as it is today, in terms of gold the cost has dropped from 50 ounces down to 8. That is a much better reflection of the gains made in manufacturing efficiency over the last four decades.

Similarly, it would have taken 20 ounces of gold to buy the Dow in January 1972 but only 8 ounces to buy it today. Put another way, the Dow dropped nearly 60% of its value in 39 years. And the dollar is worth but 3.3% of what it was back then.

Currencies around the globe are heading for meltdown as debt spirals out of control. Turning the gold price around gives a clearer picture of true economic conditions, enabling us to act accordingly.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 22, 2010 – Gold prices aren’t experiencing the usual year end slump, a sign that concerned investors aren’t ready to cash in on this year’s gains. Heading up their list of concerns is the European debt crisis, closely followed by inflation in Asia, unemployment, and QE2 – all of which show no signs of improving significantly over the months to come. That explains why experts from every camp are weighing in with positive forecasts for where the gold price is heading.

A PricewaterhouseCoopers survey of Canadian mining company executives sets the floor with a modest prediction of $1500 per ounce by the fourth quarter of 2011. With that 7% increase as a baseline those execs are poised to be heroes as profits double every dollar gold climbs over that forecast.

Next in line is the forecast of J. P. Morgan Asset Management’s Ian Henderson as reported by Adrian Ash in International Business Times. Henderson, who is less than enthusiastic about gold and very conservative in his forecasts, puts the gold price at $1600 by year’s end while Capital Economics expects it will reach that level by midyear.

Goldman Sachs believes gold will peak at $1750 in 2012, but Saxo Bank predicts that the price will keep climbing as global currency wars heat up, reaching $1800 next year.

Taking things a bit farther out, John Paulson, a highly respected hedge-fund manager, predicts gold will reach $4,000 in the next few years and Shayne McGuire, who manages the Texas Teacher Retirement gold fund, believes that $10,000 is not out of the question down the road.

Although these forecasts vary widely, there is no denying the consensus of these experts that the bull market will roll right through 2011, driving gold prices to new levels and producing returns somewhere between solid and spectacular.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 20, 2010 – A lot of folks are holding their breath waiting to see what the North Korean situation will do to gold prices. It would be sheer lunacy for the country to follow through on its threats, but lunatics are clearly running the show.

There is no end to possible scenarios, and the outcome of almost every one is not pretty. But there is one ray of hope. China is the only country having any influence at all on the regime, and they have ample reason to intervene - their hands are full dealing with issues that the threat is making only worse.

One such problem is the distinct possibility of a real estate bubble (sound familiar?) Sensing the potential for economic crisis imposed by their crazy neighbor, investors are rushing to lock in profits, creating ever deepening losses for developers. The tension in Korea along with concerns about a tightening of monetary policy is driving down stocks, especially in the banking sector. If any North Korea action were to destabilize the region, which China has cultivated to service its economy, it could be devastating.

Whether China can or will rein in North Korea remains to be seen, but even if they do the damage has already been done. Until a degree of security is returned to the region tensions will remain high and chaos will dominate the Asian economies. As things stand, security is but a very distant possibility and until such time investors will continue taking ever stronger safe haven positions.

How far the chaos will spread and how deeply it will effect western economies is anybody’s guess. But folks can stop holding their breath because there is only one effect the situation can have on gold prices: it will keep driving them up.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 16, 2010 – Looking ahead to next year for clues to where the gold price is headed, it is helpful to revisit the Congressional Budget Office’s August update of The Budget and Economic Outlook.

One assumption of the report was that the Bush tax cuts would be allowed to expire. If they were to be extended the report estimates that “the deficit in 2020 would equal about 8 percent of GDP, and debt held by the public would total nearly 100 percent of GDP.” That is a very sobering projection.

Another of the report’s assumptions is that “the measures enacted in the past two years to provide fiscal stimulus to the weakened economy will expire as currently scheduled and that future annual appropriations will be kept constant in real (inflation-adjusted) terms.” Even in the absence of tax cuts and expanded stimulus the CBO expected this year’s deficit “to be the second largest shortfall in the past 65 years . . . attributable in large part to a combination of weak revenues and elevated spending associated with the economic downturn and the policies implemented in response to it.”

What that all means is that servicing the national debt is going to be a huge problem, leading “to a fourfold increase in net interest payments over the next 10 years, from $196 billion in 2010 to $778 billion in 2020.” Larger deficits caused by the tax cuts and stimulus will “result in even greater interest costs.”

The CBO expects that economic recovery will be slow for at least the next few years and that “slow income growth as well as lost wealth will weigh on consumer spending.” That, in a nutshell, is the formula for keeping gold prices in the bull mode throughout 2011.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 15, 2010 – One recurring theme in this column is the importance of long term trends in analyzing gold prices. That is not new or original, just proven common sense.

One of the lesser known but better performing investment newsletters is the Aden Forecast, created by the Aden sisters, two rather unlikely economists from Costa Rica. They attribute their uncanny success to studying “megatrends,” patterns in the long term moving averages of prices. They believe that a break in either direction from a megatrend is far more significant than deviation from any historical cycle.

Traditional market analysts typically have a more myopic view, looking only a quarter or two into the future. Doing so they fail to assess the root causes of events, the primary fundamentals that drive the market. On the other hand, megatrends directly reflect what is happening at the quantum level.

Megatrends take years to develop and during that time attention is focused on near-term factors. Once a megatrend evolves, however, it will overwhelm near-term trends. In MarketWatch Peter Brimelow quotes the Adens’ predictions: “We expect gold to continue higher in the years ahead as its mega rise evolves, [but] stocks probably won’t. At some point, we suspect the rise will stall and it’s quite possible that the sideways action since 2000 could end up being a big top that precedes a huge stock market decline.”

Their grim outlook for the stock market is not written in stone, but it closely mimics Farrell’s warning. It “is a scenario that cannot be ruled out considering the big picture fundamentals, like the debt load and its repercussions in the years ahead.”

The Adens advise strong gold positions for the long run. They say that corrections will occur, but even as much as 15% would not send gold prices below the current megatrend.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 14, 2010 – Where is Wall Street heading, and why will it drive up gold prices? Paul B. Farrell’s article in MarketWatch pulls no punches on the issue.

The Fed’s largesse in handing out $3.3 trillion of taxpayer money to irresponsible Wall Street financial institutions as well as banks overseas served only to reward those who created the crisis in the first place, sending a strong signal that “they can take bigger and riskier bets in the future because they will get away with it next time, too.” Bernanke’s policies have been nothing but a “a tragic disaster.”

On the surface it may seem that Wall Street traders are giving up proprietary trading, the convoluted derivatives that precipitated the crisis, practices that no purpose but to create wealth out of thin air without contributing one productive dime. Traders are simply too greedy to give that up. As Michael Lewis stated in a Bloomberg article, they “are merely disguising the activity, by giving it some other name.”

Meanwhile the American worker continues to pay the tab. It takes a 3.3% growth in the economy just to tread water as the population expands, but growth is projected to remain around 2% or less throughout next year. Farrell predicts that “America’s new era, featuring no growth, deflation and a jobless recovery, will continue for years.”

Under the direction of what many are calling the worst chairman ever, the Fed will continue bowing to Wall Street while American’s bear the burden of its reckless excesses. As long as politicians and traders remain bedfellows there is faint hope of any real change before “we bottom out … until it’s too late … until [Wall Street] takes America down with it.”

As Americans wake up to that harsh reality, they will seek shelter in gold and gold prices will soar.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 13, 2010 – Now that Wall Street has invented a way to pervert the commodities markets, will gold prices suffer? At issue, of course, are ETFs.

While it is true that ETFs have significantly driven up demand for gold, it is unlikely that Wall Street manipulations will effect any long term influence on gold prices. Already many ETFs are considered overbought and as their physical reserves of gold dwindle to pay fund management and storage fees their appeal will undoubtedly fade compared to debt and obligation free investment in physically held gold.

However, gold investment in the sheep’s clothing of stocks is still attractive to many investors, revealing disastrously misplaced faith in Wall Street. The Wall Street Journal’s Market Watch has at last challenged that faith in an article by Paul B. Farrell entitled 10 Reasons To Shun Stocks Till Banks Crash.

For decades Americans have entrusted their futures to stock investments in the belief that when a company prospers, so will they. But that could not be further from the truth. According to Farrell, “Wall Street has lost 20% of your money in the past decade . . . And, worse, Wall Street will do it again by 2020.”

Why is it that the big money firms continue to post enormous profits and positive trading days while investors continue to lose? Why have profits risen 203% over the past dozen years while stock values of the S & P 500 rose a paltry 7%? Peter Morici, the former chief economist at the International Trade Commission, says it was “captured by hedge funds, electronic traders, private equity funds, and aggressive M&A shops.” In other words, it went to the insiders and not the investors.

Such Wall Street slight of hand cannot be sustainable to which the price of gold will ultimately attest.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 10, 2010 – Gold prices are steadily holding above both 10-day and 20-day moving averages, strongly supporting its ongoing uptrend. Still, the market continues to react to the least little stimulus and sometimes a single event can move the gold price in opposite directions.

Webster’s plain English definition of investing is putting money into something “for the purpose of obtaining income or profit.” Economic pundits, on the other hand, tend to think of only income generation as investment and label profit seeking as speculation. Thus the timeworn and pointless debate over whether gold is an investment or speculation, and a clue to the apparent paradox in the movement of gold prices.

Income investors typically turn to gold when the yield of other instruments makes them unattractive compared to the expected growth in the gold price. When Bernanke announced the Fed might expand its Treasury note buyout, Treasuries strengthened and income investors backed out of gold. Only a couple of days later, however, they returned as the notes fell back, joining other investors who entered the market to hedge against inflation threats raised by the same announcement.

News about unemployment is also causes opposing reactions. While bad news about jobs attracts investors seeking shelter for their wealth, goods news raises the potential for inflation attracting those hedging against it.

Daily gold prices are volatile simply because gold investing serves a broad range of short-term investment needs. Over the long term, however, gold investment is neither a means of generating income nor a source of profit. Instead gold investment is insurance for wealth, and as such it will never fit well into any pigeon hole created for traditional investments.

Regardless of where gold prices will be years down the road, it is certain that gold investments held over those years will prove to have fulfilled their purpose.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 09, 2010 – Today’s gold prices are without a doubt exceptional, but that in no way suggests that the market is topping off. This year has seen a profound shift in investors’ strategies as they have taken increasingly stronger positions in the commodities markets, which are up 12% this year and are at the highest level on record. As the market has been driven steadily upward, big investors – managers of mutual funds, hedge funds, and recently even pension funds – followed suit.

There has been considerable concern that speculation big investors is driving prices artificially high. According to Commodity Futures Trading Commission (CFTC) data they are taking net short positions and they account for nearly 52% of open interest in the gold market. Although non-commercial and non-reportable participants are taking net long term positions, the data suggest that the market is biased towards speculation. However, no consistent correlation between speculation and increased prices has ever been demonstrated.

None-the-less, the CFTC is under heavy pressure to impose position limits to keep a lid on speculation, and that certainly wouldn’t hurt the individual gold investor. Without such limits we could see a repeat of the Hunt brothers attempted takeover of the silver market in 1980, which sent prices far above the metal’s worth.

Still, record high prices in any market always stirs up concern, as well it should. Today’s gold prices, however, aren’t even close to a record level when put into proper perspective. That was set back in 1980 when the gold price hit an average of $650 – the equivalent of about $2,200 today.

It is entirely likely that the gold price is on its way to a record high, but this time it will get there through strong, steady, well-grounded growth and not through wild speculation.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 07, 2010 – Another day, another record high in gold prices. And the cause? Fed Chairman Bernanke’s appearance on 60 Minutes in which he tried to convince America that everything is under control. Apparently investors are viewing his attempt with considerable skepticism.

Topping the list of things nobody wanted to hear from Bernanke was that expansion of the QE2 bond buyout is definitely on the table. Foreign nations, already gravely concerned over possible trade imbalances, took the news as a direct threat and lack of regard for ramifications of the Fed’s actions overseas. At home it stoked fears of runaway inflation. And Bernanke’s cavalier dismissal of those concerns and assurances that the Fed is in complete control somehow didn’t ring true.

Bernanke also tried to quell concerns about the economy returning to recession, stating that he thought that would not be likely. He qualified the remark by saying that it could happen if unemployment stayed high for an extended period but he played that possibility down, predicting a return to “normal” unemployment in four or five years. Most would consider that more than sufficient time to slide back into recession, and recent data and expert opinion indicate that is a very optimistic estimate.

Probably the most unsettling thing about the interview was Bernanke’s almost delusional attitude about what he and the Fed are capable of doing. According to him they could spring into action at a moment’s notice and derail any adverse movement in prices before they could do any harm and he assures us that they would have “no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time."

Bernanke’s interview was clearly aimed at calming the general population and record gold prices testified that economic experts found nothing remotely encouraging in it.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 06, 2010 – That the gold price is climbing again might be a sign that reality is once again taking hold. It has been difficult of late to distinguish investor optimism from wishful thinking.

One prime example is the sovereign credit crisis in the Euro zone. The domino effect of failing economies – Greece then Ireland and now Portugal and Spain in line – is leading to a bond crisis, which many believe will drive European nations into a printing spree like in the USA. Sure, Germany is doing fine, but has anybody asked the Germans how they feel about bailing out the rest of the bloc? Rather than trying to make sense out of faltering economies, let’s take a look at a very healthy one.

China has engineered its growth since the 1970s with the goal of reaching world economic dominance. Their expansive development of infrastructure has created a burgeoning middle class across the nation who, despite their relatively low wages, traditionally save 40% of their earnings in bank accounts. Lately however, the government’s cap on interest rates has been lower than inflation, producing negative returns.

As China stands poised to fully emerge into the global economy, the government is encouraging its citizens to buy gold. They will be quick to respond because the Chinese perceive gold more as true wealth than as an inflation hedge. Domestic production cannot keep pace so the government has ramped up imports and has even permitted limited investment in foreign gold. In the first 10 months of 2010 China imported five times more gold than it did in the entire previous year.

China has discovered that having gold as a secondary – or even primary – currency has distinct advantages both at home and abroad. That is certain to have a profound effect on gold prices for many years to come.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 02, 2010 – From the signals the stock market is sending about soaring investor confidence one might expect that gold prices would tumble. To the contrary, however, they continue to climb.

Wednesday’s rally is of particular interest because it covered the length and breadth of the market - all 30 of the Dow's component stocks and 485 of the S&P 500's closed with gains. But most astonishing of all, the "fear index", as the CBOE Market Volatility Index (VIX) is commonly called, plummeted 9.5%.

The VIX is a widely used indicator of expected market volatility looking 30 days into the future. Volatility in turn is directly related to investor uncertainty, so a fall of that magnitude strongly suggests a major shift upward in optimism about the economy. With precious little news to support that sentiment, one has to wonder what is really going on.

It is possible that it is just a case of diminishing options. The current ratio of equity yield to that from bonds is nearly 50% over the 90 year average. And the dollar is struggling just to stay afloat. Compared to the other traditional investments, stocks are looking good. But so is gold.

According to a Goldman Sachs note cited in the Wall Street Journal, investors are expected to keep buying gold, steadily driving up the price of gold. The firm’s very modest estimate that gold will peak in 2012 at $1750 is far eclipsed by other experts predicting 40% growth and more next year alone. Concern about global inflation is the most widely cited reason for the growth, but there might also be a link to the stock market rally.

According to Citigroup estimates equity is trading at 12 times projected 2011 earnings. Although equity yields are enticing, that ratio cries out for diversification and gold has no equal in that regard today.

As long as investors have the need to hedge their optimism, gold prices will remain strong.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

December 01, 2010 – Since October gold prices have been unusually erratic, waging a constantly changing tug-o-war with the dollar. The slightest bit of good news has sent scores of wishful thinkers back to the dollar, only to return to gold a short time later.

There has been little change in the conditions that drive gold prices over the past few months, so it is not surprising that daily gold prices average out to a continued strong upward trend. However, we can expect to see marked ups and downs around that trend for at least another few months, especially as trade slows down over the holiday season, and that will present some excellent opportunities for gold investment.

Last week’s gold prices are an perfect example of the bargains to be found. For most of the week the price hovered around $1375, but Friday morning it fell sharply by nearly $20. Throughout the day the gold price inched back up to around $1360 and rallied another $5 at the end of trading. Monday morning trade resumed at $1365, dipped below $1360, then gradually climbed up to $1370. On Tuesday the dip abruptly ended as the gold price instantly rebounded to $1385 - very close to where the trend predicted it should be.

Let’s put those numbers into perspective. If you were right on top of the market there was ample time to buy gold for around $1355 while the predicted value was closer to $1380 – an immediate return of nearly 2%. In a more practical sense, if you bought gold within that two trading day window you would have realized a healthy return of at least 1.5% by Tuesday morning.

The key to cashing in on bargain gold prices is knowing the current trend. In the absence of any world altering events, that will be a reasonable predictor of the fair market gold price.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 30, 2010 – If you follow the market pundits you have undoubtedly heard lately that gold prices are forming a “head and shoulders” pattern, and that indicates that the market is topping out. However, using formula pattern recognition for market prognostication is dubious, and this one is certainly no exception. Cyclical analysis is best applied to historical data to explain after the fact why specific events have occurred.

The “head and shoulders” pattern is simply a sequence of three peaks, a center peak, which is the highest (the head) flanked on either side by two lower peaks (the shoulders). When the peaks are distinct and separated by deep valleys it is an indication that prices are rebounding off some ceiling. The problem is that such a pattern is repeated throughout bull markets, and they indicate nothing more than skittishness among investors. Only after the market has been accelerating without any major reversal for several years does the pattern gain any relevance.

An examination of monthly trends in the gold price indicates that the gold market is probably accelerating into the super-bull stage, evidenced by performance consistently above the moving average. Because gold prices have been in this stage for only one year, we can be expect the market will not top out for several years to come.

Of course there is no law that says the gold market must top out in any time frame. In all likelihood that won’t become a concern until the global monetary system moves from fiat money to some universally accepted and stable standard.

Looking back we might well see a “head and shoulders” pattern in gold prices before the market tops out. For the foreseeable future, however, gold prices are expected to continue outpacing the moving average trends.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

November 29, 2010 – Once again we are experiencing a minor slow down in gold prices against the peculiar resilience of the dollar. The dollar’s strength, however, is more a reflection of the stresses put on the Euro than a sign of economic recovery in the US.

In November the Fed revised all of its economic recovery predictions downward from those it made in June. Growth estimates for 2010 are down nearly 25% while those for 2011 are down 15%. The Federal Open Market Committee predicts that unemployment will fall much more gradually than previously thought, extending the problem for at least two to three years. The bottom line? The Fed estimates it will take at least five more years for the economy to regain its health.

Also revealed in November’s meetings was a concern among many Fed members that current policy will depress the dollar and spur undesirably high inflation. In fact, the Fed has discussed the possibility of placing a cap on long term interest rates, a tactic last employed in the post WWII era.

All economic forecasts, not only the Fed’s, assume that the economy will experience no major shocks. The crisis looming in Korea, however, poses a serious threat to global stability and has the potential to precipitate economic disaster around the world.

It would seem that faith in the dollar is misplaced and perhaps only wishful thinking. Gold prices, on the other hand, are a far better reflection of true economic conditions over time. As unfounded optimism gives way to reality over the next few years the gold price is bound to continue its sustained record growth.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

At current rates an individual engaging in a transaction of just one half ounce of gold will be reported to the IRS under the law. That is an unprecedented government intrusion on individual gold investment and strong motivation to move before the law takes effect. Already projections for the gold price have been pushed up to $2500 an ounce by the end of 2011.

The forces driving gold upward are also the reasons for taking this secret government action very seriously. Stimulus measures can be expected to continue diluting the dollar well into the future, eventually undermining the trust that gives it value. At some point the government will be forced to back up its paper with hard assets.

In 1950 the government held about 68% of the world’s gold reserves, but today that has diminished to a little over 28%. Private holdings would be a tantalizing treasure to a government facing default on its bonds. In this country privately holding gold is deemed a privilege and not a right, so the threat cannot be taken lightly.

The Trading With the Enemy Act is still on the books, giving legal basis for an executive order to confiscate privately held gold. And with the Treasury’s official price of gold sitting at $42 per ounce, enormous wealth stands to be lost.

For the time being that is good news for gold prices, but clearly we cannot sit back and let this law take effect.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

The global market today has to deal with a broad spectrum of economic concerns. At one extreme China is trying to cope with exceptional growth. Concerned that the government might put the brakes on growth to control inflation, investors there ignited yesterday’s selloff. At the other extreme, stagnant growth here appears to be resistant to all attempts to stimulate the economy. The world is only now recognizing the European debt elephant in their living room while Vietnam has taken the extraordinary measure of briefly permitting the import of gold to dampen the domestic market.

Thus we see a selloff in global stock markets precipitate a dumping of commodities while the diluted dollar continues to climb merrily along, staunchly defying reason. Fortunately, history has repeatedly shown that such odd behavior cannot become the norm – sooner or later something has to give, and the NYSE just might be it.

There is strong evidence that the US stock market has grown too much too fast relative to the overall economy and is now teetering at the peak of its cycle. Gold might continue tracking the market’s short term fluctuations for a while (a possible side effect of ETFs?), but if stocks nosedive, there is no doubt that gold will surge in response.

While uncertainty about the global economy may cause unusual fluctuations in daily gold prices, the long term trend strongly suggests that gold prices will continue to climb for exactly the same reason.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

That does not imply that gold prices are responding to deflation, however. Instead, in the long period between the peak of deflation and the reversal to inflation conditions for gold investments grow increasingly favorable as interest rates fall. At the same time, the approach of inflation steadily drives up investment demand for gold.

Nobody can say for certain when the reversal will happen, and many experts believe it won’t come for quite some time. They dismiss the notion that the stimulus will bring on inflation, at least in the USA, because Japan has been utilizing similar measures for a decade without any sign of pending inflation. But there are some major differences between the conditions here and those in Japan.

The recent elections sent politicians a clear message to come up with a quick fix for unemployment and inflation is a shortcut to job creation. Inflation is also a back door means to lower the perception of our debt, another clear mandate from the electorate.

Regardless, until inflation arrives low interest rates will continue producing favorable conditions for gold investment. And because the rate of change in daily gold prices is highest at the point of transition, the penalty for delay could be extreme.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

For the past 30 years China has fit the bill nicely. Since the country applied for admission to GATT/WTO in 1987, through their accession in 2001, and on up to the present. Although China has been accused of every form of trickery and malfeasance imaginable in its bid to dominate world markets, there has been little concrete evidence to support the claims – at least insofar as their practices being more egregious than those of other nations. However, today China has a distinct advantage in regards to currency: Their renminbi is the only modern currency that is not freely traded.

Gold prices help mitigate currency manipulation on the global exchange, but China is free to unilaterally fix the value of its currency. In effect the country can impose hidden tariffs simply by adjusting the value of the renminbi.

The WTO has long had a rule against currency manipulation as a covert means of gaining a tariff advantage but it has never been tested. World Bank President Robert Zoellick has proposed that the WTO should get more involved in the currency crisis by hearing cases where a nation has allegedly instituted trade subsidies through artificial currency adjustments.

China can and should be held accountable. While the impact of their currency policy on gold prices is difficult to gauge, there is little doubt as to its effect on the global monetary system.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

Fiat currencies are easily manipulated by the issuing governments, giving them a means to regulate domestic economies. However, globalization has magnified the ripple effect of such measures throughout the global monetary system, often producing unpredictable results. Today nations regularly use currency adjustments to improve their trade position, making it even more difficult to properly position the currency. Robert Zoellick, President of the World Bank, has proposed having the WTO intercede in such cases, citing an old but untested rule prohibiting the activity.

Clearly the time has come to reinvent the monetary system. Mr. Zoellick directly attributes soaring gold prices to the uncertainties in global currencies. Gold has universal appeal as an alternative to currency and in a very real sense has become a currency in its own right. Mr. Zoellick has called on international financial leaders to work together and devise a more stable and equitable system to manage global currencies, and he has strongly suggested that gold play an important role in any such system.

Undoubtedly the day will come when such a system is put in place. But until the global economy as a whole improves spurring widespread economic growth, financial inequity among nations will remain an insurmountable barrier. In the meantime, gold will continue growing as the de facto international currency. In turn, gold prices can be expected to keep climbing against all fiat money.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

Mr. Arends bases his predictions on the cyclically adjusted PE (CAPE) model, which compares present market values to long term averages as an indicator of growth potential. The out look is not very good. The current CAPE sits around 22 while the long term average is about 16, a spread that bodes well for a near future bust. Only once has the market defied the prediction under those conditions – the end of the century bubble. And we all know what happened next.

Long term bond returns are projected to be even worse, and Mr. Arends calculates a 60/40 mix of stocks and bonds will yield only a little more than 4% in the long term. The CAPE model has proven very useful for assessing potential growth in investments because over time the market always cycles around fair value, which is the long term average.

The last round of stimulus was a cautious approach in order to prevent another bubble and to stave off inflation. That approach, however, has raised serious concerns about the weakening the dollar which would further depress stock values while driving gold prices even higher.

Gold prices are expected to continue their strong climb for several years to come, far outpacing Mr. Arends’ predictions for growth in traditional assets – by 5 to 1 this year alone.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

One troubling inconsistency is that the Fed very likely was aware of the numbers but went ahead with the stimulus anyway. That would be a strong indication that there was nothing in the report to indicate that the economy is healthy enough to sustain the unexpected payroll growth.

Record high gold prices – now poised to break $1400 per ounce – also reflect a pessimistic long term outlook. The government has consistently played down the threat of inflation citing record low interest rates, which the stimulus is designed to drive even lower. Gold prices, however, suggest something else.

The Fed has saturated the economy with mountains of cash. When the economy finally does rebound, all that excess cash will be almost impossible to rake back in before inflation takes off. Furthermore, the potential for all out currency war grows every day as governments consider measures to counter the export advantage of a devalued dollar. Threats such as those invariably drive up investment demand for gold.

Gold speculators closely examine every nuance of events to help them predict movement in gold demand. Although that produces considerable volatility in daily gold prices, the short term trends in gold price help us have a clearer vision of current economic reality.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

In the hope that it will stimulate the economy QE2 calls for a buyback of Treasury bonds – up to $600 billion worth over eight months – in order to expand the supply of money. Simply put, the Fed will print gobs of money and give it to the Treasury. If that sounds like we’re saying “We can’t be out of money because we still have lots of checks,” you are not far off base. Such an arrangement between government and the central bank is a recipe for further overspending, which would drag us ever closer to inflation.

At the peak of the financial crisis we responded by printing a mountain of money, the impact of which is highly debatable. QE2 will more likely exacerbate the problems of a weaker dollar than stimulate the economy in any meaningful way. Every dollar the Fed prints is an IOU. With a current balance sheet showing a negative $200 trillion, we have already stretched our credibility to the breaking point; sooner or later our promissory notes won’t be worth the paper they are printed on.

However QE2 plays out, gold prices are certain to climb. Even if by some miracle the policy gets our financial engine running without igniting rampant inflation in global currencies or causing asset bubbles in foreign markets, the gold price will reflect significantly increased value relative to a devalued dollar.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

There is some logic to that argument, but there also is a question of causality. The public tends to be very conservative in regards to speculation, tending to wait and see for a long time before jumping into a bull market. If a bubble appears soon after, it is quite plausible that it had already formed before they became involved.

So far the middle class is only minimally represented in the gold market, certainly due to a lack of means and not of interest. However, for several years ever greater numbers of well-to- do Americans, including many who are traditionally conservative, have been investing in gold. Individual investment demand has undoubtedly helped to drive gold prices to current levels, but has it created a bubble?

Although those investors are more sophisticated as a group, for the most part they might still be considered amateurs. Their motivation, however, is wealth preservation and protection against inflation and weakening currency, not speculation.

There are two sure signs that the gold market is not in a bubble: The lack of improvement in the outlook for global economic conditions, which creates a genuine demand for an alternative currency, and the steadily increasing entrance of big investors in the market, which has shifted demand from commodity to investment. With investment driving the market, gold prices are likely to continue climbing well into the future.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

What does it all mean? There is no limit to opinions on the subject, but few are willing to attribute the anomaly to random chance. Perhaps it is not so complicated after all.

Interestingly, the last time stocks were so closely synchronized with the dollar was when we abandoned the gold standard in 1971. That move ushered in an era of uncertainty as the economy adjusted to the new basis of fiat money. For a time stock investors were leery of the new currency so it is not surprising that a temporary correlation would result. It is also not surprising that gold prices climbed 57% on average over the next 3 years.

Of course that period of correlation was relatively short lived and the stock market was soon back to ‘normal’, acting with no regard for movement in currencies. But is that normal? Is there some mystical property of paper assets that makes them immune from changes in the currency with which they are traded?

Today globalization is shaking up world economies on a far greater scale than the transition from the gold standard. With the Fed trying to get control through asset buyouts and stocks overvalued near their limit odd happenings are to be expected. And surging gold prices are likewise to be expected to hold everything in balance. In the broad view, the leveling effect of the gold price suggests we still have a de facto gold standard.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

Fund managers are beginning to take note as individual investors increasingly turn to gold to protect their wealth. The prospects for ongoing global financial crises and expectations of an imminent extended period of inflation are fueling a growing mistrust in currency and traditional investments and kindling a shift in strategy among pension funds managers and other big investors. The impressive returns of currently minimal gold investments and their healthy effect on the overall performance of major funds will very likely lead to stronger gold positions in the near future.

That is the trend that McGuire cites for his predictions. Although his baseline of diversifying 1% of global investments into gold may be extreme, only a fraction of that would spur gold prices to historic levels. Also contributing to predictions of skyrocketing gold prices is the in explosive emergence of ETFs. In addition to buying up and holding huge quantities of gold, these funds are luring in vast numbers of first time individual gold investors who do not yet understand the many disadvantages of ETFs versus physically holding their investment.

Many experts agree with McGuire’s reasoning, if not his prediction. For example, John Paulson, a highly respected hedge-fund manager, concurs that gold prices are on the way up to unheard of levels, which he predicts will reach $4,000 in the next few years.

The rules of global economics are changing and pioneers like McGuire are changing the rules of investment to meet the challenge. As others surely follow, there will be no limit to how high the gold price will climb.

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

The currency market and the gold market are by nature polar opposites. Speculators are quick to capitalize on short term uncertainties, creating rapid fluctuations in currency valuation that are reflected in daily gold prices. Longer term trends in the gold price, however, are driven less by speculation than by overall economic conditions, which by any measure continues to favor gold investing.

Although recent activity in the currency market led to a 2.8% decline in gold prices from the mid-month high, the year to date return is well over 22%. Forecasts predict that the gold price will resume its upward climb following a brief sluggish period as options purchased against a stronger dollar convert to futures.

The announcement of higher than expected consumer confidence for October has also had a role in temporarily holding down gold prices, but it has had little effect on the overall economic outlook, which remains pessimistic at best.

While daily gold prices are expected to remain in flux for the next few days, all indications are for a rapid recovery as the gold price resumes its strong and steady growth. Stay tuned to goldprice.net for the latest news and best gold prices

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Stewart Lawson

Senior Staff Writer - GoldPrice.net

Today, the gold price is up $16.00 at $1340.80, and although gold is still up over 20 percent in the last 365 trading days, some investors are starting to worry that their hopes of profiting with gold could burst along with a possible gold bubble. Gold has averaged a little less than 18 percent per year since 2001, so the past three years of 20 percent plus leaves many investors looking for a pullback.

This is a point that many of gold’s top analysts believe is a valid one. Franklin Sanders researches for the Money Changer, and he said in a recent article that gold should reverse course slightly. While we could see anything from a $5 decrease to another $50 decrease like the one we just experienced, Sanders believes that eventually gold will right itself and climb to $1600 per ounce by early next year. With the gold market sitting pretty at $1600 per ounce, investors who buy gold today would be sitting on a 21 percent increase over their original investment.

That’s $2100 for every $10,000 invested, and considering it takes 10-15 years to make that same amount of money with the average CD, and 5-7 years with an average “low-risk” stock, 21 cents on the dollar in under a year sounds pretty good. That’s not to say that gold spot prices won’t fall to $1200 and stay there indefinitely, as some have suggested will happen. It’s a very real possibility, and it could become reality if the three branches of government get our nation’s monetary issues under control. Right now, however, the government is utilizing a “fight fire with fire” strategy by printing more dollars to devalue current debt, and numbers like a $1 trillion deficit can only be good for precious metal prices.

Stay up to date with the gold price every day. Visit up and read the GoldPrice.net daily update.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Since gold has risen each of the last nine years, interest rates are still near zero percent, and the dollar is showing some signs of strengthening, some say a substantial pullback to as low as $1100 is inevitable.

For futures traders and professional speculators, today’s gold price is a conundrum to say the least. For those of us who want to avoid pulling our hair out and having a coronary each time gold moves 1% in either direction, today’s gold price is simply more assurance that physical, palpable assets are always an important diversification strategy when dealing with paper-dominated portfolios.

If we take a good, hard look at today’s gold price, one thing is certain: ANYTHING could happen! It is vital to use historical data, the information we have at the present moment in the cycle, and the transparent advice of those schooled in this type of unstable economy. If you would like to educate yourself about the gold market or take a stake in privately or IRA-held precious metals, contact us today for our free award-winning investor’s guide and to get clarification on all your questions from a GoldPrice.net commission-free specialist.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

This current migration into gold, silver, and to a lesser extent, platinum, was projected as far back as 2001 by economists such as Peter Schiff. Why? As US currency loses value (it hit a 15-year low against the yen last week), commodities that are priced in US dollars gain value. The fact that the dollar has lost 20% of it’s buying power in just the last year and a half, coupled with the fact that excruciatingly low interest rates are causing investors to withdraw funds from their banks, play an important role in the current bull market for gold.

It’s important not to forget that our government has printed billions of dollars out of thin air, and when this currency actually hits the hands of American consumers (right now it is mainly locked up in bonds and treasury notes) look for the cost of living for the average American to rise drastically. We saw a similar cycle from 1960 to 1980, when the dollar was devalued by 65% and the rising gold price earned some investors 1000% returns on their original purchase.

Although gold has already risen over 400% during the last nine years, the key motivator for bullish gold prices is interest rates. The government has been giving out free money for years and will soon need to raise interest rates, devalue the dollar to make our record debt more affordable, and this should keep gold’s upward pattern intact. Of course, there are no guarantees with gold except that it will always hold some intrinsic value, but if you feel that a physical possession gold coin or bar investment may be right for you then email us or call us today for more information.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

China further complicated matters, with the announcement that they have overtaken Japan as the world’s second largest economy. With the US auto market, real estate values, and US currency all seemingly in a hopeless and helpless position, it is no surprise that gold is expected to post another 15 percent-or-better year in 2011.

When you lay all the facts out on the table, it is no surprise that today’s gold price is less than 3 percent away from its all-time high. The dollar separated from gold in 1973, through Nixon’s removal of the United States from the Gold Standard. Since that time, our nation’s leaders have had unlimited access to the dollar’s printing presses by means of long-term treasury bonds, “temporarily reallocated” Social Security and Medicare funds, and other types of good old fashioned debt.

The most interesting part about gold’s current three-week rally is that is almost purely due to investor expectation. Yes, the dollar has weakened somewhat over the last month, but interest rates haven’t jumped at all, and that is what most economists believe really affects commodity prices. For more detailed information on today’s gold price and how gold can protect you from a volatile economy, call the commission-free advisers at GoldPrice.net or request some of our award-winning reports today.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

With the Euro still trying to stabilize after its 2+month struggle with the Greek economy’s chaos and the USD still uncertain across major currencies, expect resistance to remain at around 1200. We’ll need to see more momentum before calling a break back up into the middle ground between June’s highs and this week’s lows.

Traditional correlations for gold remain unreliable as world markets still look for consistency and recovery off the Euro zone crisis and the redefinition of the USD. Chart analysis mirrors the market for now with current consolidation continuing in the 1180 to 1195 range in what could be a classic head-and-shoulders formation before an eventual uptick.

In production news, China, the world’s largest producer, reported a 6% increase on production numbers from the first half of last year. Canadian miner Red Back announced a 9 percent cut off original year-end production estimates due to water line damage at its Mauritania mine. The company expects ounce recovery on the loss in 2011. Zimbabwe’s largest producer, Metallon, announced plans to raise yearly production to 250,000 ounces per year in the short-term, 500k in the mid-term, and 1,000,000 ounces per year in the long-term in keeping with worldwide demand. Constitution Mining Corp announced the discovery of two major fluvial channels at their Peruvian Golden Sands site. Both channels contain gold grades well above the company’s mg per cubic meter standards for production. Production worldwide still on scheduled uptick toward 2012.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

July 20, 2010 - Gold for August delivery rose $9.60, or 0.8%, to $1,191.50 an ounce on the Comex division of the New York Mercantile Exchange. Yesterday’s market close saw gold prices just below $1,182 an ounce, its lowest price since May 21.

While long-term investor interest in gold is predicted to be stable, Monday’s equity market rally and the strengthened U.S. dollar have resulted in a slowing demand for gold and other precious metals. Gold prices are now down 6% from May’s record highs—largely as a result of indicators that Europe is managing the debt crisis that dominated headlines in May and early June. Typically, investors’ appetite for precious metals—refuge assets—grows in proportion to signs of economic instability and currency exchange volatility.

The broad liquidation pressures confronting the stock and commodity markets are affecting gold prices as well. This morning’s discouraging housing market statistics reported housing starts having declined 5% to an eight-month low. Stock futures are indicating a lower Wednesday open on Wall Street.

Silver, with more industrial uses than gold, hovered at $17.71 an ounce today—up eleven cents from yesterday’s close. Platinum traded at $1,508 an ounce—down $5 from small gains in a late-day Monday rally.

Platinum and palladium futures were both up today as investors expressed confidence that demand for the metals (used in automobile catalytic converters) would increase. Nymex October platinum closed at $1,518.70 an ounce, up $15.10. September palladium rose $13.50, or 3.2%, to $440.40 an ounce.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 18, 2010 - Time, tide and gold prices wait for no man, and no economy, for that matter. As Friday morning dawned and trading commenced, the euro maintained its position, while the US dollar slipped a little. As the European economy limped on, gold prices broke last week’s record of $1,252 to touch $1,260 an ounce, bypassing the New York market’s opening prices. One might have thought that gold prices would plateau, considering investors’ not-unfavorable attitude towards risk in spite of what they feel about the existing eurozone debt crisis. The U.S. stock market has been up and down, but not off drastically this week.

The week gone by has seen gold prices reach record heights regardless of the position of the euro, the US dollar, equities, oil, Europe’s debt crisis and its impending effect on the global economy and just about everything that might have worried an investor.

As New York trading opened on a positive note this morning, gold rose by $12.20 an ounce, kicking off the day at $1,257, while silver added 30 cents, opening at $19.03. Other precious metals were not far behind with Palladium rising $1 to $481.00 and platinum steadying at $1,575.00.

Gold buyers can certainly enjoy the weekend, complacent about their investment, even as experts predict that gold prices will reach $1,271. In fact, the EW analysis at the end of the day is likely to refer to a target of $1,340, considering that the record $1,252.35 mark has been crossed so quickly.

There is no doubt that the gold market is surging towards an exceptionally exciting phase, as investors dump the euro and equities in favor of gold. Investment experts who would have once been a little skeptical about gold as a preferred investment are seriously recommending it today.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 16, 2010 - The on-going sovereign debt crisis in Europe seems to be the perfect backdrop for rising gold prices as investors’ continue to look for alternative investment channels. The dollar’s decline only added to the concern, and Spain’s and Portugal’s debt levels look as if they might only get worse, as stated by a draft European Commission document.

Gold prices surge ahead, strong in the face of the current economic situation, making investors feel confident in uncertain times. Matt Zeman, a trader at the LaSalle Futures Group in Chicago said, “It doesn’t hurt gold to have a weaker dollar”. He felt that the euro’s position will improve and Europe’s debt situation will support gold in the long term.

In the meantime, gold futures for August delivery went up $9.90 to $1,234.40 an ounce on the Comex in New York — the highest gain since June 7. In fact, June 8 saw a record gold price of $1,254.50 even as the euro saw a four-year low compared to the U.S. dollar. Gold prices have gone up 13 percent in 2010 while the euro has seen a 14 percent dip.

If we look at the history of gold prices, it shows that gold has always traveled in tandem with the euro when it needed a substitute for the U.S. dollar. However, this year, gold has deviated from this trend to see record high prices in all the main currencies. Frank Lesh, trader at FuturePath Trading LLC in Chicago, was quoted as saying, “There is nothing to say that the problems in euro-land are over. Any severe weakness in the euro will spark capital flow into gold,” And with good reason – since gold prices are certainly keeping the investors happy.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 11, 2010 - Reflecting a shift in trading by buyers and sellers who are rebalancing their accounts at the end of a busy week, the mid-afternoon gold price Friday hovered around $1,222, some $30 off a newly established record high set on Tuesday.

Gold reached $1,252.11 on Tuesday, June 8, the second time in as many months. The previous top mark was recorded on Wednesday, May 19, when gold reached $1,243.10 an ounce. The most recent record gold price is attributed to a proposed tax increase in England.

Gold first began its upward march more than a year ago when recession hit the U.S. economy. Debt concerns have since driven several European nations to the brink of insolvency, which led to May’s record-setting gold price. Now, with the news that gold coins are exempt in the new U.K. prime minister’s plan to double the capital gains tax rate, June gold purchases are blazing as British investors engage in what one observer described as “panic buying.”

But wherever there are economic losers, there are winners nearby, and long-term investors in the gold market are reaping the benefits of the increase in demand. Dealers in gold are caught up in the whirlwind accompanying a skyrocketing gold price, too. There’s simply not enough product to sell.

Supplies are stretched so thin that most gold coins are actually trading above market value by as much as five percent. What’s more, many European dealers claim they won’t be able to fill any purchase orders before August, leading some analysts to speculate on the chances for another record-setting gold price to come in the near future.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 7, 2010 - Gold prices have bounced right back from the recent “low,” thanks to the euro’s sliding value.

For the first time in four years, the euro reached a record low of $1.20, founded on the possibility that the sovereign debt crisis in Europe might extend to markets worldwide. While U.S. and European equities also dropped, the week ended with a loss in the commodities market. According to Frank McGhee, head dealer at Integrated Brokerage Services LLC, Chicago, when currencies drop in value, gold prices save the day. He says, “There is still a flight-to-quality demand.” In his opinion, gold is more likely to be stable compared to other assets.

Gold prices saw an increase of 0.2 percent this week after last week’s slump. Because of the euro’s devaluation, gold prices in euros saw an all-time record. Gold futures in New York saw a record high of $1249.70 on May 14, 2010, staying right ahead of equities, bonds and other commodities.

Michael Lewis, head of commodities research at Deutsche Bank AG is confident that gold prices will touch $1,700 next year as a result of the demand from Asian central banks. He also referred to the rapidly increasing investment in funds traded via the exchange. According to data from Bloomberg, the global holdings of gold ETFs amounted to 2008.1 metric tonnes, a whopping 78 per cent of last year’s global production.

In the meantime, precious metals that are not doing well this week are palladium, with prices down seven percent this week. Platinum futures dropped 1.6 percent while silver prices saw a drop of 6.1 percent.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

June 4, 2010 - Gold prices remain steady as US stocks drop this morning on the combined effects of weaker than expected employment data and fresh rumors of continued troubles in Europe’s credit markets. Confidence in the economic recovery is seen as waning as fewer US workers were hired in May than expected.

“Hiring looks soft,” remarked chief US economist at JP Morgan Chase & Co., Michael Feroli. “It does raise some red flags that businesses are still pretty cautious.” Federal Reserve Chairman Ben S. Bernanke stated joblessness is among the “important concerns” for the hesitant economic recovery.

On the heels of the worst economic slump since the Great Depression, the flailing US recovery is seen as bullish news for the overall upward trend in gold prices. Holdings in the SPDR Gold Trust, the largest bullion backed Exchange Traded Fund, rose to a record 1.289.84 tons yesterday, said the company’s website.

In response to worsening fears over the credit and bank crisis in Europe, Afshin Nabavi, senior vice president at MKS Finance SA in Geneva said, “Gold at $1,300 an ounce could be a possibility this year if there’s no [positive] change in the economic situation.”

The combined forces of a slower than expected US recovery and deepening trouble in Europe are widely considered to be contributing factors to the bull market in gold. Short term, the four-day work week saw little change in the spot gold price following the prior week’s rally of over $30. For year-to-date, gold has seen a rally of just over $100 per ounce--from a January 3rd close of $1,101 to today’s value of approximately $1,204.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Weekly Market Views, a newsletter published by the Dubai Gold and Commodities Exchange and authored by the CPM Group, expects gold prices to fluctuate between $1230 and $1180 this week, “although there still is potential for gold to head toward $1250.” They attribute last week´s gains to the contract roll in the New York market, and note that slightly quelled fears over the euro-zone sovereign debt crisis “could allow for prices to ease a bit this week.” But they add that more financial market instability as well as geopolitical tensions “could push prices sharply higher.”

It was, however, precisely the latest bad news from the euro-zone crisis that spurred the rise in gold prices at the end of last week. Fitch´s deduction of Spain´s credit rating from AAA to AA+ on Friday sent investors scurrying for gold. As Precious Metals Weekly (a Heraeus Trading newsletter) notes, after a recent fall-off in gold prices, “problems of the Spanish banking sector pulled it back up to $1,250 an ounce (it was suddenly back being a crisis-metal).”

The same Heraeus newsletter reports that generally high gold prices have attracted new mining industry investments, and that a recent gathering of mining industry representatives in Lima, Perú, ended in a statement of intent by several major companies to invest in new mines and increase overall production.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

The Dow Jones Industrial Average gained 76.93 points (0.77%) to climb to 10,120.68 points. The Dow suffered a shut-out since last Thursday. Not one of its 30 stocks posted a gain. As of yesterday, the Dow had lost 4,120.78 points (29,1%) since reaching its 2007 high on October 11.

Standard & Poor’s 500 made 10.27 points (0.96%) from yesterday to reach 1,084.30. The rise was largely attributed to nine month low closing of the MSCI World Index along with US home sales and durable order’s data signaling that the US might be straighten before a ‘Lehman-Style’ European crisis.

The Nasdaq chalked up 22.47 points (1.016%). Last Thursday the Nasdaq suffered its largest percentage drop since March 2009. This year’s high was reached on April 22nd at 2,706.67 it has declined by 502.66 (18.5%) to 2,204.01.

Thursday’s trading session was described as very choppy as in previous days. Investors’ attention, they said, were caught between “concerns about global growth and willingness to scoop up shares beaten down in the recent sell-off.”

The Wall Street rally today is mainly due to the global growth forecast for 2010 by OECD. This is a twice a year report by the Paris-based organization. They are forecasting a 4.6pc in 2010 and 4.5pc in 2011.

Investors welcomed any news that will dispel uncertainty in the market.

“As long as people feel like they know what the rules are, they feel like they can position themselves to make money,” said Peter McCorry of Keefe, Bruyette & Woods. “It’s the possibility that the rules might change in the middle of the game that scares people.”

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

In Europe, stocks followed the US trend. Stoxx Europe 600 declined by 5.6% to 237.11 from Tuesday’s high of 251.30.

Adversely to the struggling stock market performance, gold maintained its pace. It rose to $1200.00 for a gain of 23.00 (2%) an ounce. Gold watchers believe that it will take more to bring down gold from its lofty perch at the moment.

The stock decline brings news concerns to the mounting deficits in the Euro zone. Art Hogan from Jefferies Group Inc, New York, said: “We are back in uncharted territory. Korea is a major distraction at a time of global uncertainty. The market is selling for a bigger reason. There’s concern about the banking industry in Europe. The Libor rate has spiked, which signifies that credit is slowing in an interbank basis. The market is trying to price in the worst-case scenario, of not only lending freezing, but of a major bank becoming insolvent.”

Investors, though, are hesitant to get back into stocks after experiencing the housing bubble and the 2008-2009 recession that nearly became the Great Depression.

Mickey Cargile of WNB Private Client Service said that “many investors who got out of markets in the huge 200-09 market sell off still haven’t returned and it’s unclear when that might change.”

Cargile added that investors “got out on fear ad without a strategy. Now they need a strategy to get back in and they don’t quite know what to do.”

It is not farfetched to guess that many of these investors may have already placed their money on gold.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

In all, central banks have sold only 7.2 tons of gold since September. Don’t expect this limited supply of gold from the world’s central banks to affect the overall market much. Analysts say there are too many other issues keeping the price of gold flat right now. Mining companies aren’t really finding new sources of gold, and investors are holding back, waiting for key news on interest rates in the U.S. and a bank bailout package making its way through the Greek legislature. Also as more and more people look to their scrap gold as a kind of personal bailout in a the down economy, we’re seeing scrap gold sales keep up with any slight increase in demand for the first quarter of the year.

Some analysts believe the weakness of the euro could increase interest in gold reserves around the world, while others say the strength of the dollar, coupled by the euro’s weakness, will continue to keep gold prices flat. The amount of gold traded last week was lower, indicating that interest in gold is fading while investors entertain too many questions about the near future of the gold market.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Gold’s run was forecast last week by one analyst who noted that the slight slowdown after the weekend holidays was to be expected and temporary. “Gold is taking a breather, he said. “It will bounce back.”

A parallel run was also recorded in the stock market last week. Before the close of trading day, the Dow Jones Industrial Average surpassed the 11,000 mark but finally settled at 10,997.35 an increase of 70.28 (0.64%) over the previous day. It was DJIA’s highest in 18 moths. Nasdaq gained 17.24 (0.71%) and S&P 500 in creased by 7.94 ().67%).

Meanwhile, the Euro, which has been lethargic for some time, suddenly came alive and turned the tables on the US dollar. It topped the dollar by 0.8% for the first time in almost a week. The Euro had been losing to the dollar and other major currencies this year partly on account of the pressure coming from the Greek Crisis. But reports last week about the agreement reached by finance and central bank officials of member countries of the European Union buoyed the Euro. No details of the agreement had been reported yet but the news was enough to invigorate the European currency.

The gold price is expected to continue its onslaught this week under encouraging signs of an economic recovery both in the US and worldwide.

 Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Wednesday’s sales figure was a slip from yesterday’s sales that reached the vicinity of $1136. But one analyst commented that gold, along with other precious metals, might “consolidate after ‘profit taking’ following holidays at the weekend.”

Another analyst said that “gold is taking a breather after a good run…” and will “…bounce back.”

The same slew of factors continues to influence gold’s performance. The unsolved Greek financial crisis brought down the Euro for the third day, allowing the US dollar to gain against the Euro. It has been reported that so far, the crisis had cost the Euro 6.4% against the US dollar this year. Greece this month, according to published reports, will launch a multi-billion-dollar bond in the US, a move that many said would put more pressure on the European currency.

Crude oil stayed close to $87 a barrel, its highest in over 17 months brought about by increased demand due to increased economy activity. The stock market is on high energy level. Demand for commodities has risen worldwide, directly influencing gold prices. The US unemployment has been improving. Speculation is rife that the Federal Reserve would not touch the record-low interest rate for fear of jeopardizing the economic recovery that is just teeing off. The speculation made equities attractive to investors. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Another negative indicator that also helped lift up the price of gold was crude oil prices that rose to $85 a barrel.

Positive indicators as well extended a helping hand to gold – the announcement by the US Labor Department of a decrease by 6,000 Americans lining up for unemployment benefits, the six-year high manufacturing diffusion index reported by Industrial Supply Management (ISM), higher commodities demand worldwide and the general impression of a recovering US economy.

Mark O’Byrne, executive director of GoldCore Ltd. considered the “higher quarterly close …important technically and shows the momentum and the medium- and long-term remain upward.”

An encouraging sustained performance by gold this 2010 has long been awaited by investors. After the record performance in the past decade, investors have been using the closing figure of $1100 as the yardstick to measure gold’s behavior. The figure was dubbed the “psychological level” not just for gold to cross but to keep a safe distance from.

The quarter ending performance was significant because it was a sustained performance that spanned a relatively long period. It was a first for gold in the first quarter of 2010. Gold’s behavior in the past several weeks was nervous and hesitant and eventually dipped below the psychological level at $1073.85. They were weeks of fast-changing investor expectations shuttling between hope and frustration.

The first quarter performance by the price of gold had tilted the balance to hope’s favor. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

The report showing sales of previously occupied US homes fell in February for a third straight month drove the appeal of precious metals as an alternative asset. The greenback retraced its gains after climbing as much as 0.5 per cent against all six of the major currencies.

"The dollar looks less attractive after the housing numbers," said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. "You've got the bargain hunters out to buy gold after the recent slide."

Gold prices for gained 0.4 per cent, to $US1103.70 an ounce on the Comex in New York. Yesterday, the metal broke the $1100 psychological support level, posting a low of $US1092.10, the lowest price since Feb. 25.

Purchases of existing homes dropped 0.6 per cent from January to a 5.02 million annual pace, the lowest rate in eight months. Median prices are also down 1.8 per cent from the previous year.

Rhona O'Connell, the managing director of GFMS Analytics, said today in a report, “Loss of confidence in economic growth -- and economic policies -- is expected to rekindle investor demand for gold as the year wears on; especially if a double-dip recession develops,"

In 2009 marked the ninth straight year of the current Gold bull Cycle. Gold Prices reached an all-time high on Dec. 03 at $1127.50 and closed the year out posting a 24% gain as the dollar fell 4.2%.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Looking ahead to next week, we could see some much needed relief in commodities and especially in the Precious metals sector. US CPI figures are expected to show the annual pace of core inflation slowed to 1.4%, this matches a five-year low originally set in August of last year, and this would be supportive of a bearish scenario. With short-term traders looking to take profits, and a majority of retail investors turning their attention to Congress and the Health Care reform bill next week, there is an apparent absence of upward pressure on the current Gold price level.

Technically, prices are showing an Inverted Hammer candlestick (a common bearish reversal signal) along with confirmation on the following bar. More significantly, this is after testing resistance at support-turned-resistance marked by a rising trend line set from the swing low in early February.

Although long tern Gold prices appear bullish, we could see dips in spot pricing over the near term. These price corrections are what long-term investors look for when adding to their positions or attempting to get into a position if they missed the initial buying opportunity. The week ahead could create some opportunities to “buy the dips”.

If you would like more assistance in timing an entry in the Gold market, contact one of our Gold Price experts, who will be more than happy to assist you.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

The United States is facing what looks to be impending inflation. As Bob Tonachio, CEO of Robert James & Associates, Inc says, “If money supply grows faster than the economy that will create inflation as it is impossible for the economy to grow anywhere near the vertical spike in the monetary base, inflation is coming.” Gold prices have historically moved up as inflation devalues the dollar.

The struggles in the European Union are adding to the optimism for gold prices. Jim Willie CB, a statistical analyst for the Golden Jackass says, “If Greece is expelled as in my forecast, the Euro will look trim, especially upon instant expectation of expulsion quickly of Italy and Spain. If Greece is rescued, then a new wave of profligate bond rescue will indeed occur. But the cloak of uncertainty will work to lift the defective Euro currency and lead to a short cover rally. Either way, the US dollar will resume its decline, the tail on the Euro dog.”

He continues, “My best sources indicate without any equivocation that German leaders will talk of solidarity, say all the right things, but offer no aid to Greece as it suffers the desired default and removal from the European Monetary Union that shares Euro currency usage. The end to German sponsored welfare has been planned and sealed.” Such a chain of events would likely send gold prices up as well.

With China vowing to carefully evaluate adding more gold to its holdings and uncertain economic conditions in the US and Europe, gold prices are likely to resume their climb.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

When asked about his prediction, Embry said, “I would say at least 30%. I said that I thought it would be the best year to date. We've had nine years consecutive higher year-end gold prices and the best year in that span for a year's return was 31%. I think this will be the year that we exceed it in this, the 10th year of the bull market.”

He believes that investor confidence is building because a greater number of people understand the financial danger in the US. “(The US) government spent dramatically more money and the results are a budget deficit I never thought I'd see in my life. I'm shocked at the numbers.” He continues by saying, “When you can't depend on your government paper as a safe haven, I think that fact puts gold in a much better light in more people's eyes.”

Regarding hyperinflation Embry says, “I think the far greater risk is hyperinflation because I believe that these guys that are in control today have seen the depressionary '30s, and they will move heaven and earth to prevent that outcome.”

Embry finishes by saying, “When inflation rears its ugly head and I suspect that will be sooner rather than later, the market will force interest rates higher in the US.” When this occurs, investor confidence will likely push gold prices much higher.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

A rally early in the US trading session by the euro may be a direct result of meetings over the weekend in Berlin between Greek Prime Minister George Papandreou and German Chancellor Angela Merkel. While no specific details were announced, French President Nicolas Sarkozy said the euro region is ready to rescue Greece if necessary. “If the Greek situation calms down, people may not be as interested in owning hard assets,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago.

News of a rise in German Industrial output was also considered to be factor in the early gains by the euro, as the country posted a 0.6 percent increase. While economists had forecast a 1 percent gain in a Bloomberg survey, the number was still positive as it represented continued growth.

Speaking of today’s drop, James Moore, an analyst for The Bullion Desk said, that gold prices may “benefit from further investor diversification in coming sessions, with dips continuing to be seen as bargain-hunting opportunities. Risk appetite remains steady.” 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

As reported by Franklin Sanders of The Moneychanger, “Gold prices successfully tested $1,090 support last week and battered its way through resistance at $1,100, $1,118, $1,125, and $1,132, not to mention that in February $1,120 had turned gold back. Yesterday gold discretely corrected, bounced off $1,125 and today closed over $1,132 at $1,134.80.” Many traders use technical indicators such as the Fibonacci Ratio to determine key points of resistance and support for gold prices.

Mr. Sanders continues by saying, “All these things set the gold price up to challenge the January high at $1,150.00 closing. That will be the final witness that gold has entered a new rally, ready to test its mettle once more against the $1,226.40 all time intraday high.”

The basis for this belief is the falling wedge pattern which some analysts identified from December 3rd to the end of February; analysts such as Mr. Sanders suggest that this pattern “has broken out upside. Another harbinger of higher prices.”

The US dollar, which generally trades against gold prices, appears to have lost momentum for its rally. Sanders states that the dollar has “double topped at 81.20+ this week. To resume its uptrend the US Dollar Index would have to climb over 81.30. Fall will accelerate once it pierces 79.80, then question will become, Can it hold above 78.50?”

As trading patterns continue to be met, the gold price may be preparing to challenge both the 2010 high and the all-time of the precious metal. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

In the latest report by the Department of Labor, the nonfarm payrolls only lost 36,000 additional jobs, down from the expected 68,000. The announcement was also made that the unemployment rate dropped 0.1% to 9.7%. Unemployment does not directly affect gold prices, but it is an indicator of continued weakness in the US economy.

Since 1950, according to Macquarie’s equity research team, the Federal Reserve has never raised interest rates with unemployment above 7.7%. This historical trend is confirmed by Fed Chairman Ben Bernanke’s comment that it is necessary to continue “exceptionally low” interest rates for an “extended period” of time. This commitment to low interest rates and a low inflation rate are credited by many analysts with contributing to the current increase in gold prices.

As PIMCO’s Bill Gross states, “Inflation expectations remain relatively subdued, providing the Fed cover to delay the normalization of monetary policy. Negative real interest rates have historically been associated with gold bull markets and the longer real rates trade below zero the faster the currency degradation - all of which provides a tailwind for a higher gold price.”

Gold prices are likely to benefit as the current unemployment rate stays near 10% and the Fed’s continues its efforts to keep rates low for an extended period of time, so check GoldPrice.net often for updates or subscribe to our RSS feed to stay up-to-date with the latest economic news. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

According to Commerzbank, investment and jewelry demand are helping to support the current price. "Alongside the currently robust jewelry demand from India and the high interest of speculative financial investors, ETF demand could also support gold price in holding up against the firm U.S. dollar and in advancing toward the $1,200 an ounce mark," a report from Commerzbank stated.

Although overall gold demand was down 11 percent in 2009, the 4th quarter increased nearly 27 percent over the 3rd quarter as demand for both investment and jewelry grew. For the year, investment demand was up more than 7 percent and exceeded jewelry demand for the first time since 1980, according to AngloGold Ashanti Ltd., Africa’s largest producer of gold. While first quarter results for 2010 have not been fully written, analysts suggest that demand for both sectors are continuing to rise, as indicated by the Commerzbank report.

According to the World Gold Council, how much demand can support rising gold prices remains to be seen. The WGC states in a recent report that, “Industrial and jewelry demand are expected to strengthen as the economy improves, but will still be hampered by the lingering effects of the recession.” Visit GoldPrice.net often to stay updated on circumstances surrounding the gold market. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

According to the European Central Bank, Greece’s debt to gross national product has grown to 113%, affecting both the national economy and the price of the euro. “The currency market continues to dictate direction,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report. “The problem with Greece’s financial health will not go away instantly. A temporary rebound in the single currency could well propel gold prices higher.” As of 11:00 AM EST today, gold prices stood at $1,142.60, up $7.10 for the day.

In addition to the budget cuts, the Greek Prime Minister also announced that the government will cut 30% from holiday payments civil servants receive. This move is seen as an attempt to gain additional favor with European Union leaders, who have demanded additional austerity measures from the government in Athens prior to any financial assistance from the Union.

Gold prices have climbed from near $1,098.00 per ounce last week as analysts see a drop in risk aversion to gold. The US Dollar Index currently stands at 80.33, a decline of 0.160 for the day. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Bradley George and Daniel Sacks of the Investec Global Gold Fund are among those who see the $1,300 price level as being possible. "We believe the result of January's US Federal Reserve Open Market Committee meeting is more bullish than bearish for bullion going forward, say George and Sacks. "Although the outlook for inflation is stable according to the Federal Reserve's statement, we believe the reaffirmation by the Federal Reserve that rates are likely to remain low for an extended period, which should be supportive of gold prices in the long term."

Plans by central banks to slowly add gold reserves may benefit the market as well. George and Sacks said publicity involved with large governmental purchases drive down prices and "instead they may be pursuing a strategy of steady accumulation over time in the secondary market," the managers said. Such moves help to steady demand in the market. Finally, there is increased demand in both the investment and jewelry sectors. This rising consumer demand adds pressure on available supplies, potentially driving prices higher.

With these and other factors, Sacks and George see a compelling case that gold prices could climb $1,300 per ounce this year, well exceeding today’s midday spot price of $1,115.10 per ounce. Investors who see the recent correction as the new floor for prices should consider making purchases before any potential price increases occur and lower any possible profits. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

At 12:00 PM EST today, gold prices stood at $1,103.30, up $5.10 for the day. New unemployment claims for last week reached almost one-half million and sales of new homes plummeted, leaving the stability of the US economy uncertain and pushing up the price of gold, silver and platinum. These gains are welcome news to investors, who have seen losses over the past two days that eliminated part of the gains experienced during the month of February.

These gains are viewed as a positive sign for gold. News of a drop in consumer confidence and an announcement that the Federal Reserve still views the economy as fragile had weakened the risk appetite of some investors, leading to gold’s drop this week. The return above gold’s resistance point of $1,100 per ounce suggests that in spite of the headwinds hindering gold, it is maintaining fundamental strength and positioning for another move upward.

With gold prices recovering, now is an opportunity for investors to get back into the market. Although analysts predict some volatility, many expect prices to begin climbing again, as they regroup on the weak US economy data and once again offer a safe-haven investment to buyers. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

As announced this week, the Consumer Confidence Index dropped to 46, representing its lowest level in the past 10 months. This drop is particularly troubling for the Obama Administration, as it has been attempting to assure Americans that the economy is improving despite unemployment figures that continue to increase and the real concern of inflation. Bernanke’s testimony is supposed to allay the inflation fears by claiming that the government can control it, not by denying its potential arrival.

For investors, today will likely set the tone for upcoming gold prices. Should Bernanke convince Congress and the American people that the risk of inflation is minimal; the upcoming gold rally may evolve more slowly. Should his comments confirm inflation fears and lead people to look for safe investment alternatives, prices could raise quickly as people move to gold, the traditional safe haven against inflation.

Investors should continue to watch the day’s events as news from Capital Hill could offer a chance to either pick up some gold at lower prices or witness the start of the next strong gold rally. After an early fall on the day, gold prices are looking to climb as the US economic situation is being scrutinized. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

At 4:00 PM EST today, gold prices stood at $1,110.50, down $3.10 for the day. Analysts believe that the rate hike coupled with the public gold sale announced by the International Monetary Fund are pressuring gold prices, leading investors to take profits before a price drop can occur.

The rate hike was seen as an effort by the Fed to influence public opinion on plans to control inflation, as very little money is actually lent to banks using this discount rate. The general concern at the Fed appears to be more geared towards taking small, initial steps before what some have called the “great money draining” takes place.

While the actions by the IMF and the Fed may initially cause a dip in gold prices, the long-term effect could be beneficial for gold. Concerning inflation, Fed Chairman Ben Bernanke recently said in a statement before the US House of Representatives, “We are quite confident that we can raise interest rates, reduce the money supply and do that all in a timely way to avoid any inflationary consequences.”

Interest rates have sat at zero for an overextended period, and the imminent raising of the key lending rate will play on the value of the dollar, whether Mr. Bernanke likes it or not. Gold is the traditional investment hedge against rising inflation, and investors should consider taking new positions prior to any increases in gold prices. While the discount rate hike shook prices, the long-term outlook could still be viewed as very positive for gold. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Greek finance minister George Papaconstantinou has described the task of trying to save Greece’s economy as ‘changing the course of the Titanic’, saying that it will take time and that the country is currently doing enough to correct its fiscal problems. This turmoil has plunged the EU into a downward economic spiral, with several other members experiencing problems and the currency plunging to its lowest level in nine months.

This chaos has had an invigorating effect on gold prices, as the metal snapped out of a two month correction to post gains in each of the past three weeks. As of 1:00 PM EST, gold stands at $1,115.60, down $2.50. This continues a strong run as investors flee the euro and look to gold as an alternate investment option.

Investors should continue to look at adding to their holdings as gold prices remain strong and many analysts look for steady gains in the months ahead. Gold is likely to be a preferable alternative asset option over the US dollar as concerns about inflation in the United States continue to arise. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Although gold investment has recently been soft in the US as the dollar experienced its rally, investors in countries with currency issues have increased their gold exposure as a hedge against inflationary pressures. While there has been a short-term rally in the dollar, long-term gold fundamentals continue to strengthen as sovereign debt problems in the US and other countries erode investors’ confidence in currency-based assets.

Recent analysts’ reports indicate a growing sense that gold prices are preparing for another rally. Citigroup Inc released a report suggesting that after clearing the $1,100 price point, gold had broken through its resistance and would likely move towards $1,160 per ounce in the near future. As the dollar settles down from its recent climb, many expect gold to be the next to rally.

With gold prices breaking through an important resistance point, many experts see this as a promising time to purchase gold. Rising prices signal potential profits and with some analysts predicting spot prices of $1,350 to $1,500 per ounce this year, profits could be very lucrative for investors who get in before prices increase. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Gold prices have hovered near the $1,100.00 per ounce price throughout the morning trading after going over the key mark in early morning trading. At noon EST, the US Dollar Index was also higher, trading at 80.33, up 0.116. "Investors seem to be partly offloading euro-zone risk equally in gold and the U.S. dollar," said Pradeep Unni, senior analyst at Richcomm Global Services. "This is specifically the reason why gold is firm despite the greenback also being strong.

While both commodities are currently tracking upward, some analysts see that as only temporary. Unni added, "Past data suggest that this decoupling phenomenon is more of a temporary development and (gold and the dollar) will switch to their inverse correlations in a short time frame."

The turn against the euro appears to be directly related to a hesitancy by EU leaders to commit to a plan of action ahead of planned budget deficit cuts by the Greeks. "Traders and investors will be looking for further expansion on the EU's "support" for Greece's debt problems, with the generally negative outlook for the PIIGS (Portugal, Italy, Ireland, Greece and Spain) likely to further question the cohesion and direction of the euro," said TheBullionDesk.com analyst James Moore.

While gold and the dollar typically have an inverse relationship, the reluctance of the EU leaders to commit to a plan of action may create a continued decoupling. The euro has been trading nearly its nine-month low while both dollar values and gold prices rise, suggesting continued gains for both in the absence of a plan from Europe. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

While investors have been wary due to the lack of a clear plan in Greece, many investors are making purchases on the basis of strong fundamentals. Gold is currently oversold as evidenced by the Relative Strength Index and recent trading patterns have suggested an increase in prices. Generally speaking, when investors see prices rising, their risk aversion drops and demand goes up.

Such was the case this week as the lack of a plan out of the EU, the continued drop in first-time US unemployment claims, and efforts by the Chinese government to dry up surplus funds in their economy failed to diminish demand for gold. Many analysts are suggesting that gold is positioned for another rally and a gold price increase in a week when the US dollar rose as well gives many people a great sense of optimism.

The week ahead looks favorable for gold prices as well. The Chinese New Year and the President’s Day holiday in the United States will bring traders back and firm details out of the European Union should lower risk aversion. Gold appears to be currently on an upward track, and investors should consider taking new positions in order to reap the benefits of its possible climb.

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Both gold and the dollar have been affected by the less than stalwart support from the EU for the sovereign debt crisis in Greece. The EU promised they "will take determined and coordinated action, if needed, to safeguard financial stability in the euro as a whole." While encouraging, the statement gave no information about direct action and left speculators scurrying back to gold and the US dollar for protection.

In addition, the US Labor Department announced that first-time claims for jobless benefits dropped 43,000 to a total of 440,000 for the week; analyst predictions had been for a smaller drop of only 15,000. This news was met with mixed reviews as the reality of continued job losses was tempered by those losses being lower than expected. The US government has been struggling to produce positive economic news in a week where Federal Reserve Chairman Ben Bernanke expressed continue concern about rising inflation and announced potential measures to counteract it.

Following the Chinese, Japanese and American holidays, many analysts are looking for continued upward movement in gold prices as renewed demand, risk appetite and positive fundamentals suggest a rally. Investors who are liquid should consider buying new positions prior to any rise in prices. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

In a statement released by EU President Herman Van Rompuy, the EU pledged to “take determined and coordinated action if needed to safeguard the euro area as a whole.” As details are made available concerning the specific plans for Greece and the other unstable economies in Italy, Portugal and Spain, investors’ appetites for investment in the euro will likely join the optimism of gold traders and push the currency up as well, a move that would likely impact the dollar in a negative sense.

Arrival of such news has been a strong force on both currencies and commodities such as gold. The US dollar has enjoyed two months of gains which are generally regarded as a statement against the economic predicaments in these countries. During the same time, gold has suffered through a correction and lackluster trading due to many viewing the dollar as the hedge asset of choice.

Gold prices are moving up today with the statement of support by the EU for the economic problems of its member countries. Investors should consider taking new positions as specific details about the recovery plans could spur additional price increases in gold. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

The London Telegraph has reported that, “Germany is preparing to drop its vehement opposition to a rescue package for Greece, fearing that a rapid escalation of the debt crisis in Southern Europe could endanger German banks and damage the euro.” While this creates a potential solution, the lack of a definitive agreement has helped to push the US dollar back up, with the US Dollar Index currently at 79.96, or up 0.26 from yesterday. At 12:45 PM EST, gold was trading at $1,073.60, down $5.00 from yesterday’s close.

Mixed economic news from the US has come out today, with details of Fed Chairman Bernanke’s testimony before the House and US trade deficit numbers finding their way into the headlines. Bernanke reaffirmed his concern about inflation by ensuring the House that the Fed has a plan in place to fight it, suggesting increased interest rates and reduced money supply as steps that the Fed would utilize to combat further declines in the dollar. News of the trade deficit climbing from $36.4 billion to $40.2 billion in January also came out today, further impacting efforts to strengthen the economy.

While the lack of a Greek bailout seemed to have the biggest initial impact on lower gold prices, Bernanke’s confirmation of inflation concerns and the growing trade deficit may end up driving gold prices higher. Investors who are liquid should make purchases as traders consider all of the day’s news and make decisions that could further affect gold prices. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

At mid-day, gold prices had risen to $1,076.90, an increase of $14.50 from Monday’s close. Friday’s close of $1,052 represented a fall to a new three-month low for gold and triggered automatic sell orders set for such an event. With prices appearing to find their bottom and the RSI (Relative Strength Index) dropping to 38.5, gold prices have started climbing.

April delivery gold on COMEX has also been rising to $1,066.2 on Monday and $1,079.8 at 1:00 PM on Tuesday. August deliveries held firm at $1,192 as prices are expected by many to rise during the next few months.

This news is favorable for many investors, as gold prices have dropped around 13% since reaching their all-time high of $1,226 in December. Profit taking and technical trading led a number of investors to sell, and a rise in the US Dollar Index was also considered a factor in the price drop.

As investors see gold prices increase, it is likely that many will look to get into positions on bullion in advance of any substantial price gains. Traders who are interested in adding gold holdings should contact their gold exchange and buy gold before any prolonged rally begins. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

The gold spot price dropped 1.4% last week on some technical selling, creating the fourth consecutive week with a net drop. The US Dollar Index fell as well, suggesting that gold and the dollar are beginning to act independently as the dollar rides weakness in the euro and gold finds its bottom after correcting. Peter Fertig, owner of Quantitative Commodity Research Ltd. puts it succinctly when he states, “The dollar is down. The metal’s (gold’s) sudden drop last week is also a good indicator that prices may rise.”

The missing inverse relationship that frequently exists between the dollar and gold prices indicates two assets at different stages of reversal. The dollar appears to be reversing its recent gains on fears that the US economy can not recover as quickly as hoped; gold, on the other hand, is closed today at $1,065 and appears to be prepared to reverse and climb based on solid fundamentals and heightened demand. Randgold Resources Ltd CEO Mark Bristow has gone on record stating his belief that gold prices will trade upwards of $1,200 this year and $1,500 after that.

For people looking to protect and grow their wealth, now is a very good time to get into gold. As demand increases and people invest based on fundamentals and not the dollar, gold prices are likely to rise. Purchasing gold bullion or certified gold coins while prices are near the bottom is an excellent way to potential profit as strategists expect a gold price increase. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Although some point to the recent activity of the dollar as the reason for the decline in gold prices, many analysts are not convinced, due to gold’s fundamental strength and the dollar’s fundamental weaknesses. After increasing nearly $300 per ounce from July to December last year, gold needed a correction; that correction has been taking place the past two months.

The dollar, on the other hand, has flaws that make it extremely vulnerable. Most of the success enjoyed by the dollar recently has come at the expense of the euro and EU countries like Spain, Portugal and Greece who are in serious fiscal trouble. The problem for the dollar is that the United States is also in serious trouble; the current rampant spending and the crushing national debt are creating a weakness that the currency soon will not be able to overcome. This predicament plays right to gold’s strength as a hedge against difficult economic times.

When the underlying market demand supports gold’s price and the economy is in disarray, gold prices are perfectly positioned to rise; this is the condition that the world is realizing now. Gold bullion, certified coins and other investments are likely to soar as investors look for security for their current holdings and additional future profits.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Although there is no historical connection between gold prices and world currencies, investors in have been hedging against economic problems in Europe by moving to the dollar. This shift is considered by many analysts to be a temporary situation, given the lack of underlying support for the dollar and the fiscal instability of the United States’ economy.

Gold appears to be the most logical benefactor when investors again look at the US economic situation. Gold prices have tumbled below their three-month low, but the fundamentals of the commodity show no signs of keeping them down. High demand, low available supply and economic distress in the US will once again bring investors back as the current rally by the dollar subsides.

Instead of selling, now is a good time for investors to consider buying gold. Falling prices are a bad sign for weak commodities, but gold has the indicators that suggest another climb as prices look to stabilize and begin to rise. Investors should consider a strategy of purchasing bullion or certified coins on the lower prices in order to hold winning positions when the dollar levels off and the gold prices reverse their trend and start to rise. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

The dollar’s resurgence resumed on Wednesday amid reports that first Greece, and then Portugal are struggling with severe debt issues, weakening the value of the euro and sending the dollar to a .319 gain on the US Dollar Index. The prevailing opinion is that this strength could last for a little while longer as all eyes turn to Portugal and its difficulties.

The non-farm payroll data and speculation over bank interest rates are affecting gold prices as well. The payroll data, expected to be announced on Friday, is believed to be better than anticipated, and the Federal Reserve has been hinting at tightening the money supply with interest rates to avert a threat of inflation.

While such news generates fear among some smaller investors, larger traders are not so easily moved. SPDR Gold Trust, a large exchange-trade fund, continues to be steady with its gold holdings, maintaining over 1 million tons of physical gold at a value of over $1 billion, in spite of members in the fund who have sold their holdings recently, creating outflow. This position suggests that gold prices are expected by many to remain strong.

While gold prices drop over concern about jobs data, interest rates and fiscal problems abroad, many serious investors are seeing this as a chance to pick up additional holdings at lower prices, using the news to their advantage. Private investors should look to do the same, as the see the ongoing financial problems in the US and anticipate a new rally in gold prices. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

While nothing actually occurred to send the dollar tumbling, the potential impact of the President’s speech could immediately be seen as he announced he is seeking approval for a $3.8 trillion budget and more than $100 billion in additional stimulus projects. Wary investors have watched the US deficit soar to new levels while billions in government subsidies have been flooded into the economy; this combination could have disastrous effects, both now and well into the future as the dollar continues to weaken.

The potential boon to gold investors was not lost on the market; many analysts have been warning about the dangers of out of control government spending and another $1.3 trillion in deficit is projected for the fiscal year. As US indebtedness soars, gold investments become extremely attractive.

The sluggish economy and weak dollar make a perfect combination for renewed investing in gold bullion and certified gold coins. Higher demand is typically created when the dollar falls, as investors look for assets that are not directly tied to the value of the currency. Purchasing additional bullion and coins now can be a way to protect assets and grow wealth before the budget kicks in and gold prices rise. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

China’s production increased nearly 19% from 2008, with its top ten mining companies contributing over 47% of that figure. China has been streamlining its gold mining industry, with many small and inefficient producers being closed or integrated. For this reason, the number of producers in China fell from 1,200 in 2002 to about 700 today.

Contrary to conventional thinking, an increase in gold production could have a positive effect on gold prices. Although increased supply can sometimes lower value, gold has a demand that far exceeds any increase in supply; in fact, gold prices may rise because consumers won’t have to rely on more expensive metals such as palladium or platinum for jewelry or electronics applications.

With gold prices correcting and appearing to be ready for a rally, now is a very good time to consider purchasing bullion or certified coins. Additional supply will likely increase demand, possibly leading to higher prices for the metal. Investors who take positions early have a good chance to catch the gold price near its bottom and profit most when a rally takes place. With a record Chinese production in 2009, there is potential for strong gold prices in 2010. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

The leader of the Canadian based gold miner has a first-hand perspective about the gold industry and his comments provide insight into to the expectations of many in the business. He confidently stated that gold prices “may fluctuate, but to us and I think to our investors, the key criteria should be that it’s got a secular tendency now to move up year in and year out.”

Others in the industry show similar confidence as they forecast that gold prices would, over the long term, rise to between $1,250 and $1,500. Some predict that the market could see a bottom near $1,000, but then rebound to as high as $1,300 per ounce this year alone.

What does that mean to the average investor? Now is an excellent time to buy! With the spot price dropping to around $1,080 per ounce, many believe the correction is nearly complete and the rise could begin soon. Buying at the bottom of a correction is any investor’s dream; if gold has truly found its bottom, buying bullion and rare gold coins right now could have excellent benefits in the future.

Analysts contend that gold prices nearing $1,000 are not sustainable due to underlying demand for the metal, particularly given its attractiveness as a hedge against inflation, as a safe-haven asset, and as an alternative to struggling currencies. Investors who are liquid should consider purchasing now in anticipation of another strong run in gold prices.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

After coming out of a recessed economic situation, the current conditions would more accurately be called deflationary. As jobs are lost, businesses fail and bankruptcies soar, many citizens are looking for ways to reduce their credit responsibilities and protect their wealth. This contraction of the private sector credit market is understandable after more than sixty years of expansion. The only problem is this natural correction is being undermined by a credit expansion in the US government.

The government has been operating at a deficit for years, even decades, but if you add in increased pork-barrel spending, the cost of two wars and ill-advised bailouts and stimulus packages, the deficit spending is staggering. This mountain of debt is sapping the strength of the US dollar, and the effect of the economy has been underscored as gold prices continue to rise.

For many people, investment while gold prices are rising is the answer to protecting and growing their wealth during these difficult times. Gold prices raised nearly $250 during the 2009 calendar year, and many analysts are predicting gains in 2010 to be even higher.

Gold bullion and certified rare coins have been strong investments for a number of years, and they are still attractive options for many Americans looking to build their futures in these trying times. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Some analysts are starting to see the Federal government’s stimulus and bailout money as only masking a more serious problem, a sort of “asset bubble” where easy access to money has caused over-stimulated growth. The weak dollar and the enormous national debt are, by extension, the result of this and have create a vicious circle; bailouts add to the national debt, which weakens the dollar, necessitating more bailouts. This cycle cannot continue and its end is bound to be painful.

How should you respond to this potential of an asset bubble? Gold prices have risen due to bad government policy and many predict they are prepared to rise again. Investing in gold bullion or certified gold coins provides a potential source of financial protection that doesn’t currently exist in dollar based investments like stocks or real estate. As gold prices stand near the $1,090 per ounce level, they are still little more than $125 below the all-time high, which some forecast will be broken again this year.

Gold prices indicate that bullion and certified rare coins offer potential protection against further destabilization of the dollar and other currencies. Investors should consider moving out of heavy holdings of dollar based commodities and purchasing gold before prices can begin a new upward climb. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

The world fiscal structure has largely been kept afloat by governments pumping billions of dollars into their economies. As countries like Greece, Dubai and others try to come to grips with the enormous strain this is putting on their treasuries, they could be tempted to pull the funding and actually cause a double-dip recession.

How would such a situation affect gold prices? While no one can offer iron-clad proof, all indications point to a strong rise in spot prices. Recessionary pressures have a severe weakening effect on currency, meaning that it generally takes more of a weak currency to buy gold than a strong one, resulting in a price increase. For this reason, futures prices have started to rise and some economists are predicting gold prices could challenge the $2,000 per ounce barrier before the end of 2010.

All of this bad news offers two strong aspects for gold investors. With bullion and certified coins poised to increase in price, now is an excellent time to invest. Gold purchases can be seen as one way to offset the weakening of the dollar and the fiscal unrest in a number of countries. In addition, gold provides a hedge against the instability that surrounds times like these. During the current world economic crisis, gold prices have risen nearly 20% over the past two years as investors seek to protect their financial futures.

Gold prices have the potential to greatly profit from the current fiscal problems. Investors can watch the economic decisions of countries around the world and monitor gold prices for the right time to invest in bullion and certified gold coins. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Mining and exploration companies use stocks to raise funds for their operations. Prior to hitting and confirming a strike, stock prices can be pennies per share, as with Golden Phoenix Minerals Inc. and its five cents per share stocks or $2.25 per share like Nevsun Resources Ltd and Vista Gold New. Companies like these may issue millions of shares of stocks to generate funds to purchase new lands and finance new explorations.

Once these companies have located gold, the jump in price can be quite amazing. Finding gold can turn stocks into a huge success, like Eldorado Gold Corp at $13.00 per share or Agnico Eagle Mines with an impressive $53.00 per share. Such returns are what entice investors into buying gold stocks in the beginning.

The downside is that not many mines ever hit. Even though a stock may only be five cents, you will still lose $100,000 if you own 2,000,000 shares. Many investors try and ultimately fail because that lure of making $20 million if the mine hits and stocks go to $10 per share is just too tempting.

While the rewards can be great, most people are more comfortable with the advantages offered by purchasing gold. $100,000 invested in gold bullion in 2000 would be worth nearly $400,000 today. The security in owning physical gold is that it is never worthless. If a mining company fails, the stock is worthless paper; if gold prices fall, the gold still retains considerable value that will increase when the price rises again.

Gold stock prices hold great allure for some people; the possibility of a big strike makes them willing to gamble their investment money. For most people, investments represent security, and one of the best investments around is physical gold in the form of bullion and certified gold coins.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

The current price of gold has some merit; knowing the current price can allow speculators to take advantage of a spike in price to sell bullion, while a sell-off or correction can provide the opportunity to buy at a better price. During the past decade, gold prices have risen nearly 300 percent; an investor who bought in 2000 holds gold that is worth today nearly four times what he paid for it. During this time, however, successful speculators who correctly anticipated the volatility of gold prices were in a position to make much more since price changes are not linear.

While you may be interested in speculating on gold prices, deciding on how to do it can be a more difficult decision. The first decision is establishing a relationship with a gold exchange to make purchases. It is important to find one that has a long history of success, low fees and an impeccable record of customer service. For short term investing, it is also advantageous if the exchange has depositories so that you do not have to receive your purchase and then ship it back when you sell.

After choosing an exchange, it is important to do some research and determine a method for deciding when to initiate trading. Some people merely follow market trends and this information can be readily found on the Internet. For more elaborate analysis, candlestick signals, rolling average analysis or working with a specialist at your gold exchange may be desirable.

Regardless of the method used, more than the current price of gold is needed for short-term investing. Traders are wise to do their homework and enlist the services of a reputable gold exchange to make the most out of their trading efforts. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

After a sell off in December brought gold down, comparing the price of gold today would lead you to deduct that prices are rising. While that has been true in general, the price of gold today actually dropped almost 1%. Two people looking at the same price would draw different conclusions.

There are several things that can be gleaned from the data at hand. First, after several weeks of steady climbing, gold prices dropped. This can be the result of a sell-off or other correction of price, or it can simply be the volatility that gold prices experience. Second, the day’s events don’t stand alone; they are the product of days, weeks or even months of activity.

Movement of prices is analyzed a number of different ways. Some people look at moving averages that offer a smoother pattern of price movements, while others use candlestick patterns to search for recognized patterns of movement. While the methods of tracking vary, most investors attempt to determine the direction that gold prices are moving in order to decide if it is a good time to buy or sell.

All investors want to know what will happen tomorrow if the price of gold today is $1,130.00. Gold exchanges and investment charts are among the ways that traders look to predict the winds of change and determine their investment plans of action.

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Some financial institutions obviously believe that the economy is improving and that the US dollar is strengthening, because their gold price predictions call for lower gold spot prices in 2010. The investment company Natixis is the foremost among those calling for gold to be bearish this year, because analysts from this company believe that gold will average $850 per ounce. Barclay’s Capital believes that will remain flat this year, as evidenced by their $1140 prediction. Macquarie Investment Bank also believes that gold prices will remain dormant in 2010, because gold’s rise due to the falling dollar could be offset by investors looking to take profits.

Other financial entities believe that the financial stress of our current recession will increase demand for safe-haven assets like gold, and the dollar’s slide against other major currencies could escalate the yellow metal substantially this year. The Certified Gold Exchange currently has a gold price prediction of $1592, and analysts at Merrill Lynch believe that the gold spot price could reach $1500 by the end of 2010. Kitco analysts have called for the gold spot price to reach $1375 before the ball drops on 2011, and feel free to view the complete list of 2010 gold price predictions or contact us directly for live, discounted pricing on the most popular physical gold investments. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

The price of gold today is exponentially higher than that of 2001, when stocks, bonds, and real estate ruled as kings. Gold was at a paltry $252 per ounce back then, although some investors foresaw higher gold prices in the near future. No investment moves in a straight line, and gold was at a 25-year low.

Our government’s weighty debt, combined with the printing presses that are going full steam ahead, has aided gold prices since 2001 and the yellow metal has climbed over 400% in the last nine years. Many economists believe that 2010 ill be a break away year for precious metals because the dollar’s decline against other major currencies is expected to continue.

In addition to he devaluation of the US dollar, the general sad state of our financial markets is another reason that gold prices could rise in 2010. Some real estate markets have hinted at signs of life, but the long-term effects of our current recession have not yet been felt in the real estate market. Once government rebates expire and borrowers are forced to use their mortgage payment money for groceries due to a lack of jobs, we could see another wave of the mortgage crisis from sea to shining sea. Just as the undertow beneath glassy waters can be treacherous, don’t let the presently calm state of our economy lull you into thinking that we are out of dangerous financial waters. Stay up-to-date with the current financial crisis by reading our 2010 Insider’s Guide to Gold Investing below. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Silver, because it is more plentiful than gold, is the lower priced metal. Although very little is used in today’s United States coins, demand for other applications is still high and the $5 price range of the metal in 2000 has soared to nearly $19 per ounce in early 2010. Silver is still a protection against economic pressures, since it is still accepted as an alternate currency in many places.

The same can be said for gold; less common, gold demand has outpaced its supply for a number of years. The US Mint has been forced to delay production of 2010 bullion until sufficient gold is made available, and the Mint has even decided to eliminate fractional bullion coins from its production. Gold prices have risen from a sub $300 per ounce price in 2000 to the current spot price of around $1,150.

Investors that are concerned with silver and gold prices are obviously looking to trade gold. This desire necessitates finding a precious metals exchange to help with their transactions, and goldprice.net is an excellent alternative. With a strong reputation and a spotless A+ rating from the Better Business Bureau, the company is positioned to advise clients and to help them find the commodities that best fit their investment portfolio. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

As investors look to purchase gold, understanding the buy gold price is important to accurately calculate profits on investments. The price of buying gold includes several charges that need to be remembered in order to realize gains on investments. As you will see, working with a reputable gold exchange is an important part of accomplishing your investment goals.

When visiting a website like goldprice.net, you will find the gold price scrolling across the top of the page. This convenient feature allows investors to see at a glance the latest gold spot price. This is the price that an investor will actually be charged per ounce of gold in US dollars. Once a buyer decides to initiate a purchase, this is when the work begins.

Once a buy gold price is established, the client will determine the quantity and the commodity desired. Once the terms are decided, the benefits of a company like goldprice.net become obvious. Commissions on a buy can range from 5.5 to 7.0 percent. Many larger volume orders have a lower commission, no shipping and no fees when the buyer wants to sell the same gold. With many other exchanges, there are fees for buying, selling and shipping, making the order price higher and causing an investor to lose money on each transaction.

Understanding the buy gold price means more than just looking at a ticker. The price that should concern an investor more is what buying gold will actually cost, both buying and selling. Using a company such as goldprice.net can be an important part of getting the best buy gold price. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Over the past forty years, strong investment demand has created historic gold prices. During this time, investors have sought gold to diversify their portfolios and to serve as a hedge for inflation. This confidence in gold as an investment led to an all-time high price in December 2009 and a bright outlook for 2010.

A person that purchased gold in 1970 paid approximately $37 per ounce; selling the same gold today would result in a profit of about $1,100 per ounce. To make the picture clearer, a purchase of 1,000 ounces of gold in 1970 would have cost about $37,000 and would net an impressive $1,137,000 if sold at today’s prices or 1,226,000 if sold when it reached its high of over $1,226 per ounce in early December.

While a heavy sell-off dropped the historic gold prices, the outlook is very favorable for this year. Since January 1st, prices have been moving steadily higher and are already up nearly 5% for the year. Weakness in the US dollar and a continued bleak forecast for the anticipated economic recovery has allowed gold prices to march higher. The 30% increase in gold prices for 2009 puts the commodity in position to again surpass its high. This optimism leaves 2010 as another potentially profitable year for gold investment.

Whether investing in bullion or rare coins, it is best to enlist the services of a respected gold exchange. Goldprice.net is part of the Certified Gold Exchange and offers clients excellent investment options, superior service and competitive rates for any kind of gold purchase. As historic gold prices drive investment, a wise trader will move forward with the help of a company like the Certified Gold Exchange. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

The gold market is volatile; it rises, falls, and then it rises again, usually happening many times in a day, week or year. Unless you are buying or selling this instant, the current spot price tells you very little. When put together with the prices from a month, year or decade, a pattern emerges. Gold prices held steady in December, 2009; the prices rose nearly 33% in 2009 and almost 300% in the past ten years. By combining daily prices over these time frames, it creates a more explicit picture.

An investor can use today’s gold price for a couple of different things. First, today’s price indicates an approximately worth of an investment. An ounce of gold bought for $1,000.00 would be worth $1,136.60 today, an increase of $136.60. In addition, an investor can use today’s gold price in an attempt to determine a pricing trend. If a trend is detected, an investor can make decisions about when to buy or sell.

Today’s gold price is constantly changing. An investor should visit goldprice.net to see the current price and speak with the company’s specialists to determine the best way to take advantage of that information

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

As the United States’ economy staggers under the weight of an uncertain future, American Eagle gold prices have many investors poised to post additional profits. Wrapping up a highly successful five year period, gold bullion investors still have reason to believe that signs point to a continued upward trend in gold prices, making their investments even more valuable.

Following the global economic crisis, the US economy has been in a state of uncertainty. The government is flooding billions of new dollars into stimulus plans with the hopes of triggering a recovery, yet there have been very few indications that this is succeeding. In the meantime, the flood of money is continuing to weaken the US dollar, adding concerns that the economy is moving towards inflation.

Historically, a weak dollar and higher inflation have led to a rise in the value of gold. In spite of a five year surge of 175% in gold prices, a growing number of analysts are predicting increased prices for the precious metal in 2010. Foreign bullion and American Eagle gold prices reflect the fact that the economy is fragile and the demand for the security of gold is high.

American Eagle gold prices have traditionally benefited from times when the dollar is weak and the economy struggles. Bullion is seen as a hedge against inflation and a secure emergency currency, and American Eagle gold prices reflect this confidence. Investors should look to a gold exchange like goldprice.net to get more information on pricing trends, as well as to buy and sell bullion. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

If you purchase bullion, the American Eagle gold price that will most interest you is the gold spot price, as this is the current going price for bullion. You will have to pay a commission on the transaction, but the spot price is what will drive your attention.

For rare coin collectors, the American Eagle gold price is something very different. In circulation from 1907 to 1933, these coins are scarce and very valuable if they are in excellent condition. The American Eagle gold price is not just the spot price, but is dependent on the Sheldon rating that the coin earns. Because they are rare, coins that are high quality are very expensive. Monitoring the price of these coins is best done with the help of an exchange such as goldprice.net.

Watching American Eagle gold prices can help you decide whether bullion or rare coins best fit your investing needs. Using a gold exchange like goldprice.net allows you to enjoy the benefits of the company’s long history and its impressive A+ rating from the Better Business Bureau.

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Investing against gold price futures is highly desirable by many because it provides an investment strategy that has the potential to generate more profits than physically held gold. While investing against gold price futures offers greater rewards, it must be approached with caution because it can be a great risk as well.

Investing against gold price futures is like any other options trading of commodities. A contract is held against a certain quantity of gold and based on an anticipated future price. As the price moves, the investor makes money if the director matches what was anticipated, and loses money if it goes the opposite direction.

There are advantages and disadvantages to investing on gold price futures. The first advantage is that investors can control large quantities of gold, substantially increasing the potential profit. The second benefit is that futures trading does not require the trader to take delivery of the metal since the buyer is purchasing the right to take possession of the gold at a later time. The biggest liability of investing on gold price futures is risk; since the trader is generally controlling large quantities of gold, a failed investment can cause the person to not only lose the amount of money invested, but more since the contract is leveraged.

Investing in gold price futures is not advised for every investor and must be done understanding that there is both great reward and risk. Goldprice.net is a reputable company that can assist investors to determine if it is right for their portfolios. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Finding the gold price online can be as easy as visiting goldprice.net. The website keeps a price ticker at the top of each page, continuously updating and offering the latest price to visitors. The company does this because it realizes clients are eager to know about any recent price changes as they happen.

Watching the gold price online can be helpful to investors as they make decisions about their holdings. While a long-term investor may only be curious, an active precious metals trader needs the latest numbers in order to decide whether to buy or sell.

Having a convenient place to find the gold price online makes trading gold much simpler for serious investors. Finding it on a website like goldprice.net can provide a full service solution for people who buy and sell gold. In addition to gold spot pricing, investors can review information that helps in their decision-making process, as they learn more about trading this valuable metal. Finally, the specialists with the company can offer expert assistance that has been recognized by the Better Business Bureau with its coveted A+ rating.

Monitoring investments by watching the gold price online is a simple procedure that can create handsome benefits. Tracking that price with goldprice.net not only produces instant results, it provides a full line of services to visitors at its website. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

In 2009, the gold price news revolved around steady growth and spot prices that reached an all-time high. The growth in gold price for the year was a healthy 25%, revenue and yet profitability in Dubai-based businesses fell by around 20 to 30 per cent. Although the drop was substantial, the businesses survived and their owners are optimistically looking forward to positive gold price news for 2010.

The general opinion in Dubai regarding the gold market is that the worst appears to have passed. Sales there last year were largely down from January to March, then normal afterwards. The feeling is that the global economic downturn was to blame, but is getting better, making the gold price news seem better for 2010.

Not only do the businesses have an optimistic outlook for the coming year, but the analysts do too. The feeling is that gold price news might find the metal around $1,350 per ounce in the first quarter of 2010 and perhaps as high as $1,800 by the end of the year. These same analysts envision a scenario where gold could reach $3,000 within five years, revolutionizing the gold market in the process.

Just as Dubai is an important part of the business world, its gold center is a key part of the gold price news. This partnership appears to make 2010 a hopeful and profitable time for the gold industry.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

From the end of February to early April in 2009, the price of gold bullion fell 10.5%. The drop wasn’t alarming, rather a correction to the bull market that has been occurring. From April to December, the price soared from $895 to $1,226, an impressive 37% increase in just eight months. This surge followed a correction to put the price of gold bullion at an all-time high.

In the first two weeks of December, gold dropped from its all-time high down to $1,096, which represented another correction of about 10%. While each pattern has its own characteristics, if another 30% climb occurred it would run gold to a new high of $1,425 or an increase of nearly $330.

When analyzing the price of gold bullion, there are no guarantees, but there are signs that can indicates the potential for change. Current economic conditions are helpful indicators that gold could continue to rise throughout 2010. A weak dollar, continued unemployment woes and a flood of money into an overloaded financial structure serve as indicators that point positively in gold’s favor. The December 2009 sell-off is also positive; after hitting its all-time high, gold adjusted but then began climbing again. This could be an indication that the fall in December was only an adjustment, not a change in the direction of the trend.

With economic signs and the investment market both moving in gold’s favor, analyzing trends in the price of gold bullion would seem to show that 2010 will be a profitable year for investors. While analysis only gives a glimpse into the future, that peek looks like it could be a good time to invest in gold. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

Volatility always makes the investment news. Bad news hits Wall Street and market index falls 300 points, or a winter storm knocks the price of wheat down ten percent. Gold has its ups and downs as well, especially when investors react emotionally to events around them.

Certified gold prices can eliminate much of uncertainty surrounding the gold market. While the value of bulk gold can still vary, professionally certified gold prices are based more on a particular coin and less on the gold it contains. This means their value will consistently track higher than the market price of their gold.

At the current time, the dollar and the US stock market are more vulnerable to volatility than gold. Both of these investments are event-based and highly susceptible to emotional movement, while gold currently has the perfect conditions for continued growth.

Gold is an excellent investment commodity and is currently on a ten-year upward trend, gaining 380% in value during the decade. Certified gold prices have an added element of security that makes them perfect for lessening any impact that volatility might try to make on an investor’s portfolio. 

Daily Updates Archive

Ronald Stevens

Senior Staff Writer - GoldPrice.net

For the first ten years of the 21st century, gold price quotes have made steady gains, up to nearly 400% of their value at the start of the decade. This roaring success was made possible largely due to declining economic conditions that have substantially weakened the United States dollar.

Even in the final month of 2009, gold overcame a sell-off to remain close to its all-time high price. In fact, gold rose in price nearly 26% for 2009 and its five-year growth was up an astounding 149%. Even on the heels of such impressive growth, gold appears ready to climb again.

The variables that move gold price quotes up are still in place. The United States economy, the fiscal health of the US dollar and worldwide demand are all positioned to take gold higher. Some experts have even suggested that gold could go a high as $1,350 per ounce next year alone. This type of jump would represent another 20-25% increase in price.

In general, precious metal prices have been rising; gold price quotes have reflected that increase. Gold is typically the most actively traded metal as many people are attracted to its profitability and resilience as an investment vehicle. With ideal financial conditions and high demand, prices will likely continue to climb well into 2010

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Gold topped $1,225 per ounce in early December to reach its all-time high, yet then tumbled several weeks later to a two month low of $1,074 per ounce during a period of over-aggressive profit taking. After the sellers relented, the gold price trend began moving upward again, quickly going back over the $1,100 mark. Most analysts were unimpressed with the downturn, which was seen to be a simple sell-off and quickly reversed.

Gold price trends for 2010 indicate more upward movement. The US dollar continues to be a very weak commodity and has not shown any indication of a rapid reversal. As the US-led wars in Iraq and Afghanistan drag on and the government-entitlement spending continues, no imminent recovery by the dollar is seen. This is important to the gold market as the strength of the dollar historically trends opposite of gold.

Although gold recently reached its all-time high, its adjusted price is only about half of what it was in 1980. Following this trend makes it possible to ignore the current number and looks at the commodity in terms of what the market can bear. This also indicates continued upward movement.

Analyzing gold price trends allows experts to objectively review the value of bullion and gold bars, and then accurately forecast what they will do in the future. Indications are that while its value fluctuated in December 2009, gold prices will continue to rise in 2010.

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

The first factor in evaluating gold prices is to understand the current price. Although gold has set its all-time high, the price is still in line with traditional pricing. With the current price hovering between $1,100 and $1,200 per ounce, it has not increased like other commodities over the same period. Since 1980, the price of gold has risen less than 50%, while the stocks on the Dow Jones Industrial Average are up nearly 700% during the same time.

If the actual price of gold increased at a conservative rate, the inflation adjusted price has actually decreased. Calculating inflation increases with the 1980 gold price of $873 per ounce would create a current price of $2,200 per ounce. Because of this, analyzing current gold prices against past prices can help keep its level in the proper perspective.

Finally, analyzing current gold prices requires an inspection of the current variables affecting the price. Gold is traditionally affected by inflation in an inverse relationship with the US dollar. As inflation rises, the value of the dollar falls, making gold more valuable. The global economic crisis continues to be unstable, providing an environment for sustained price increases.

By analyzing current gold prices against its past performance and current potential, investors are able to more accurately predict its movements. As 2010 begins, both scenarios indicate that the opinions of the experts have merit, meaning that prices could continue to climb well into the new year. 

Daily Updates Archive

Michael W. Truman

Senior Staff Writer - GoldPrice.net

Strictly looking at current gold prices does not give an accurate indication of gold’s potential in the open market. Inflation can give a false impression of how the commodity has performed. In 2008, junior gold was sold off heavily because of de-leveraging; causing many junior miners to lose as much as 80% of their market value, with gold prices only dropping 30%. Such a drastic fall-off in market share indicates that the junior gold market as a whole would need to double just to reach past levels.

While many investors presently feel that gold has reached the cycle's leveling point for the current cycle at $1,100 per ounce, analysts are far less positive. Gold prices in 1980 reached $873 per ounce, which would have been over $2,200 per ounce if adjusted for today’s level of inflation. To place things in a clearer perspective, stocks have risen 800% over the same period of time. This leaves a great deal of optimism when analyzing current gold prices.

As the world economic picture comes into focus for 2010, instability is expected in gold prices, causing swings that could drop below $1,000 or race above $1,300 per ounce. Conservatively analyzing current gold prices suggests this metal will continue to rise and outperform other commodities, making gold an excellent investment going forward into the New Year. 

Daily Updates Archive

Michael Truman

Senior Staff Writer - GoldPrice.net

Current gold prices are slightly higher than the market’s opening value for two specific reasons. The dollar strengthened somewhat, which usually causes a decrease in gold prices. However, the majority of investors saw today’s stronger dollar as an aberration, and leveraged their other investments further by increasing their physical possession gold holdings.

GoldPrice.net not only provides the latest information about the gold spot price, our research team has vast amounts of historic and live data on the silver and platinum markets. Both of these metals are largely considered more speculative than gold at the moment, because gold has more of a historical, directly inverse relationship with US currency.

Current gold prices for various products depend on the type of item and the gold exchange with whom you conduct your business. If possible, search for a “reputable gold exchange” through a major search engine and then check that company’s Better Business Bureau reputation at www.BBB.org. Or, you can always contact GoldPrice.net directly for direct information on the live gold market and current gold prices. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

The price for gold fluctuates based on current supply and demand, so you have to take into account the yearly output of gold from mining companies (about 3000 tons) and the various uses for which gold is needed. You never know from one minute to the next what the gold spot price will do, because a drop in the dollar index (which has an inverse relationship with gold) could be offset , or even outweighed by a decrease in demand from gold-consuming industries. This works both ways, so even if the dollar gains value, gold might go up in price because of a buying frenzy that could be set off by financial uncertainty.

The price for gold also depends on the particular item that you choose, the gold exchange that you conduct your business with, and the time and volume in which you purchase. Some celebrity-endorsed firms charge exorbitant premiums for their products, so always check the Better business Bureau report at www.BBB.org to make sure that you have located a reputable brokerage.

It is a common misconception for new gold investors that you can buy and sell gold at the spot price, but this is almost never true. Contact GoldPrice.net or browse through one of our award-winning investment tutorials below to get the facts about how to get competitive pricing and be successful in today’s gold market. 

Daily Updates Archive

Arthur McGuire

Senior Staff Writer - GoldPrice.net

Projections for the price of gold are overwhelmingly bullish for 2010, although another rally by the investment-grade yellow metal will hinge on the performance of the dollar and other US financial markets over the next 12 months. Gold was not traditionally considered a mainstream investment, but during the 1970s and in our current cycle we see and influx of investors flock to gold, silver, and other privately held safe-haven commodities in order to protect themselves from faulty traditional markets. The gold price today is the direct result of investors who have increased their safe-haven demand by purchasing assets that can be privately stored and that are not tied to the falling dollar.

The gold price today at 1pm EST was $1132.80, which is an increase of $14.60 over the market’s opening levels. If you have given consideration to a gold investment and you think that the gold price could escalate further in 2010, contact GoldPrice.net directly or feel free to pick up one of our helpful and free investment tutorials below. 

Daily Updates Archive

Arthur McGuire

Senior Staff Writer - GoldPrice.net

The Price of Gold - $1127.80 (+$0.40)

The Price of Silver-$17.38 (-$0.01)

The Price of Platinum - $1442.00 (-$6.00)

Remember that major precious metal dealers do not buy or sell products at the spot price. Rather, premiums are added to each product, and these markups vary depending on the type of item, the amount purchased or sold, and the gold dealer in question.

The price of gold has been a hot topic recently because of the United States’ financial meltdown that began three years ago. While some indicators could show that a recovery is underway, the overwhelming majority of data points to a long-term inflationary cycle down the road, as well as the continued struggle of many of our nation’s long-standing industries.

Gold traditionally rises with inflation, and recessionary periods cause investors to seek diversification with safe-haven assets like precious metals. If our economy and the US dollar index continue to deteriorate in 2010, the price of gold could climb to $1500 per ounce. If you seek protection from our dollar’s withering value or if you simply feel the need for a back-up plan with physical possession gold, contact GoldPrice.net or browse our helpful investment guides below to get more information on how to make a successful precious metal investment. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Gold prices have been on the rise since 2001, and many economists have called for higher gold prices once our Federal Reserve starts to raise its key lending rate, which has remained near zero for an overextended period of time. In the 1970s, higher interest rates meant higher gold prices, because gold and other commodities historically tend to increase in value with inflation of US currency.

Many nations have increased their gold holdings lately, but China and India have led the charge. Most recently, India’s central bank purchased 200 tons and $6.7 billion worth of gold from the International Monetary Fund (IMF) on November 3. This move helped the gold price listed on the COMEX division of the New York Mercantile Exchange (NYMEX) to escalate to $1227, although recent bouts with profit-taking by some short-term investors have reduced the gold price somewhat.

The gold price has increased 36% in the last 365 days, and most economists agree that the future of the gold spot price hinges on our economy’s performance and the Fed’s handling of interest rates. If you believe that our economy will continue to struggle and you want to protect yourself from a future inflationary cycle, contact GoldPrice.net or one of the nation’s reputable gold exchanges to protect and grow your wealth during these unsteady financial times. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Gold’s spot value reached an all-time high of $1226 a month ago, but the low gold price of this week was the direct result of a stronger ZUS dollar and renewed confidence in US stock indexes. Much of the economic data recently released by White House economists forecast a better economic situation for the United Sates, but the counterargument is that our financial markets have only been boosted by intentional government manipulation of the monetary supply. Both sides are fully convinced of their own respective opinion, so you have to look at the facts and decide for yourself if the economy is going to improve or worsen.

If you believe that our economy is in a recovery stage, then the low gold price will probably get lower in your mind. If our government keeps a lid on inflation and improves consumer confidence, gold prices will likely fall.

If rising interest rates spark inflation, and if Americans continue to distrust US stock and real estate investments, then gold prices could rise in a pattern similar to those of the 1930s and the 1970s. For more information on gold price fluctuations, contact GoldPrice.net directly or browse through any of our helpful and informative tutorials below. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

At 2pm EST the gold spot price was $1132.80, which is a gain of 0.08% for the trading session. Gold dropped substantially earlier this week, but the yellow metal is still up an astounding 38% in the last 365 days. Silver, which is presently selling for $17.38 per ounce, is down $0.09 for the day.

Silver and gold are highly sought after investments for individuals who foresee inflation and the eventual collapse of the dollar, which are fears that have become much more urgent now that the Federal Reserve is contemplating raising interest rates.

Once the Fed starts to raise interest rates, it could set off a massive bout of hyperinflation, similar to the high inflationary cycle seen in the 1970s when interest rates reached double digits. Gold and other commodities that are priced in US dollars have a historically proven inverse relationship with this currency, so a weaker dollar means higher commodities prices and vice versa.

If you fear that the dollar’s declining value could trample your buying power and diminish your financial independence in a national economic emergency, take advantage of the gold price per ounce now, because economists expect a gold spot price of $1400-$1500 next year. Register below or contact us directly to get the 2010 Insider’s Guide to Gold and Silver Prices. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Gold investment values vary based on the COMEX gold spot price, which is available around the clock on the GoldPrice live ticker. This spot value fluctuates based on supply and demand, and the latter has been growing lately because of gold’s worth as a privately-held, safe-haven asset.

Gold and other commodities that are priced in US dollars cost more when our currency falters, and this inverse relationship between the yellow metals and the greenback has been proven in the 1930s and again in the 1970s. Inflation destroyed cash accounts during those cycles and many economists expect massive inflation once the Federal Reserve starts to raise interest rates.

Gold bullion investments are usually made when a short-term inflation cycle is foreseen, and some investors have utilized gold bullion to hedge their portfolios against any upcoming inflationary trends. Other investors are concerned with more than simple inflation, and this second demographic is concerned with the long-term solvency of our dollar, our economy, and our nation.

These investors tend to shy away from gold bullion investments and instead purchase certified gold coins. Learn more about gold bullion and certified gold by registering below for our award-winning 2010 Insider’s Guide to Understanding Gold Investment Values. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

As a matter of fact, the Kitco Gold price Index listed at www.Kitco.com shows that today’s pullback in the gold spot price is exclusively due to predominant selling, because the US dollar index dropped this weekend. The dollar’s inverse relationship with gold aided the gold spot price, but those gains were slightly outweighed by the investors who liquidated their holdings for holiday shopping purposes.

At the moment, skepticism over traditional markets abounds within our nation because no one is sure what radical monetary moves will be made next by our policymakers in Washington. When Ben Bernanke and the rest of the “experts” at the Federal Reserve start to raise interest rates in 2010, this could set off a bout of inflation that may not ease for a decade or more.

Thompson-Reuters recently conducted a poll in which 80% of CEOs within the United States feel that our government’s current stimulus will be unsuccessful, and these sentiments have been echoed by American household investors since the first government handouts were announced.

Future gold prices could go up or down, because anything could happen in this economy. For live gold prices or projections on what could happen in the gold market, request our free information kit below or simply call our toll-free number for answers to your questions. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Market analysts projected a slight pullback in precious metal prices this week because the rally has marched on unhindered for weeks. Generally, profit-taking will take place after a rally of a few days, but the falling dollar has driven the gold spot price higher despite some mild profit-taking by short-term investors.

Falling gold prices are most likely temporary because our government is going to raise interest rates soon and this will repress the dollar’s worth substantially. Many economists have called for the gold spot price to rise to $1700 in the current cycle, throughout the same time that stocks, bonds, and cash accounts could become devalued significantly.

The rising gold spot price has been almost exclusively due to the fact that our dollar could collapse. Currently, investors are seeking safe-haven assets that can be stored privately and used for goods and services in lieu of fiat currency.

Falling gold prices are not a reason to exit the market unless you are simply a short-term investors looking to take profits and convert back to cash. If you desire to protect your wealth with gold and escape the troubles of the greenback, rest assured that we are in all likelihood, near the very beginning of a long-term inflationary cycle that will result in higher gold prices.

Take advantage of falling gold prices by strengthening your position in the gold market, or educate yourself by requesting your free information kit below. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Gold coins do not sell for the flat spot rate, because other costs must be accounted for before the investor can take delivery of the gold. It is very expensive and time-consuming to mine gold, so the costs of these efforts must be covered. Additionally, mints like the Perth Mint and the US Mint operate as businesses, so they also add premiums to their coins to cover operational costs and also to turn a profit.

Gold bullion coins trade closer to the gold spot price than certified gold coins, so short-term investors usually opt for the bullion products. Safety-oriented investors who plan to hold their gold for longer than 14 months generally shy away from gold bullion coins, which could be confiscated if our government makes another run on gold bullion. Learn more about the historic gold bullion confiscation here.

The gold bullion spot price is the main factor in determining gold bullion coin prices, and this spot value is always available at www.Kitco.com and GoldPrice.net. Certified gold coin prices can be monitored at www.PCGS.com, and household investors like you can take advantage of institutional discounts from these levels by contacting the Certified Gold Exchange directly. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Gold prices have risen recently due to the international community’s scramble to locate and hoard substantial amounts of gold. The International Monetary Fund (IMF) sold 200 tons of gold to India’s central bank on November 3, and now that same bank and China’s national bank appear to be competing for the IMF’s remaining 200 tons.

The gold spot price has had no choice but to spike to keep up with the increased demand of household and institutional investors. Many US investors previously thought that the IMF’s 400 ton offering would subdue gold prices and allow investors to save a few dollars per ounce before the Federal Reserve raises interest rates and sets off a bout of inflation.

However, the quick removal of the first 200 tons from the open market sent gold prices soaring, and the mere speculation over the remaining ore has caused enough of a stir to elevate the gold spot price on the COMEX division of the New York Mercantile Exchange (NYMEX) to a new record high of $1217 earlier today. The gold spot price now resides at $1214.80, and you can get the latest info on gold spot price fluctuations by calling us directly or emailing us for free, live, spam-free updates. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

The price of gold at noon EST is $1199.40 per ounce, and earlier this morning gold reached a new historic high of $1201.80 per ounce on the COMEX division of the New York Mercantile Exchange (NYMEX). In the third quarter of this year, many banks and economists called for gold spot prices of $1050-$1100 before the end of 2009.

These projections have already been eclipsed by a long shot because of changes in the global gold scene, so these same prognosticators are now calling for the price of gold to rise to $1350-$1450 in 2010. India, China, and other nations have frantically scooped up gold from the open market in recent months, and these moves have been highlighted by India’s $6.7 billion purchase from the International Monetary Fund (IMF) on November 3.

There has been widespread speculation that the IMF’s remaining 200 tons of gold will soon be taken off the market by one of these gold grubbing countries, so US household investors have driven the gold spot price higher with their demand for hard, safe-haven assets. If you believe that the price of gold could escalate further, or if you are searching for a way to protect and privatize your assets during our current recession, contact GoldPrice.net directly to get your free information kit on investing in physical gold. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Now is not the time to splurge uncontrollably on gifts for yourself or others, because the US economy is on the brink of collapse and no one knows how our nation’s financial situation will change in the coming months. After shooting to $1183 last week, the gold spot price declined to $1173.20 by noon EST today.

Gold price drops on the Commodities Exchange (COMEX) were caused, not by a strengthening of US currency, but by investors who decided to liquidate their gold holdings and convert back to cash. Gold bullion prices were repressed this morning because bullion bars and coins fluctuate exclusively based on the COMEX gold spot price. Certified gold coins retreated slightly because of their inherent gold content, but demand for non-confiscatable assets like certified gold coins remains high, as it has throughout our recession.

If you are considering a gold investment, it is advisable to take your position in the gold market before the repression of the gold spot price reverses. Once our economy regains solid footing and the dollar starts to increase in value in the eyes of international investors, the gold price will likely continue to drop. However, key financial institutions like JP Morgan and Merrill Lynch have called for the gold spot price to increase 12-18% in 2010, so gold price drops that were seen today will likely be corrected soon.

For live quotes on the most widely traded gold products, contact GoldPrice.net directly through our toll-free number, or simply send us an email and request your copy of our 2010 Insider’s Guide To Gold Investing. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

It was only a few weeks ago that economists were calling for the gold spot price to reach $1100 before 2010, but gold looks to have stabilized above $1100 levels for the time being. Market analysts expect the gold spot price to rise another 12-18% in 2010, so if these increases manifest themselves then we could be buying gold based on a $1400 spot price before the end of next year.

Don’t believe the hype if someone tells you that gold will continue to rise at current levels, because it is unreasonable to expect that the gold price will increase by 10% every month until our economy regains health or drastic measures are taken to reshape our nation’s finances. Like all other investments, gold does not move in a straight line and the gold spot price fluctuates based on factors that change constantly.

The latest gold price of $1083 is evidence of weaker US currency and higher demand for safe-haven assets within US borders. If you believe that these factors will continue to hold true, then you may want to fortify your portfolio and/or retirement account with physical gold. Email GoldPrice.net to learn more about today’s gold market, or call our toll-free help desk to have your questions answered. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

• CitiFX analysts believe that the gold bug will continue to bite investors next year. These analysts have called for the rise in gold since 2001, when the yellow metal was worth $252 per ounce. CitiFX analysts have predicted gold prices of $1300 in the first quarter of 2010.

• Dr. Michael Berry believes that Washington will continue to run the printing presses, which has historically had a profoundly rewarding effect on precious metals. Dr. Berry believes that gold could eventually reach $1500 per ounce, and he has remained firm in his stance that silver could reach $35 per ounce around the same time.

• Martin Armstrong is the former President of Princeton Economics, and he foresees the gold price reaching $1350 in 2010. He believes that our nation will reach a danger zone in terms of citizen confidence next year, which could provoke a complete economic meltdown. He believes that higher demand for safe-haven assets will drive gold prices throughout the next few years.

These are only a few of the most conservative gold price projections for 2010. Some economists have called for seemingly outrageously high prices, and it remains to be seen if dollar devaluation will double or triple gold prices over the next decade.

To give yourself some protection with a hard asset like gold, and to potentially profit while our traditional markets crumble, contact us directly for free information and discounted quotes on the most widely traded gold products. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Some companies produced bars that have previously been found to contain less gold than claimed, and other gold bullion products have a very limited market, so it could be hard to liquidate your investment. Since gold bullion is primarily used as a short-term investment, and because the gold bullion market is so volatile, liquidity is crucial.

By investing in gold bullion bars that have been produced by one of the following companies, you could prevent a lot of future headaches:

• Johnson-Matthey

• Credit-Suisse

• Engelhard

• PAMP-Suisse

Gold bar prices for these products are available by registering for free, live quotes or by calling us directly. Gold bar prices are formulated by utilizing the current gold spot price, and then adding on a 2-4% premium, depending on the gold exchange and the bar’s brand and weight. One-ounce gold bullion bars are presently selling for an average of $1195, and this average is based upon a gold spot price of $1149.

If you desire to learn more about the wide range of gold bullion products that are available on today’s market, visit www.Gold-Bullion.org or contact GoldPrice.net directly. Our 2010 Insider’s Guide To Gold Investing could be a helpful tool for you throughout your time in the gold market next year. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

The lower gold prices as caused by the strengthening dollar, but most economists are skeptical that US currency will be able to rebound to pre-recession health. Our government has manipulated US financial markets by infusing trillions of dollars of paper money into dying sectors like big banks and commercial real estate.

Our government’s efforts have overwhelmingly failed, because the mild improvements that were seen in the third quarter of 2009 have been called an anomaly by some Wall Street experts. A lower gold price over time could mean that our economy is improving, but the dollar is expected to drop further and gold owners are not likely to give up their ore anytime soon.

There are some short-term gold investors who are just hunting for quick profits, but the majority of US gold owners have purchased precious metals as a back-up plan and an insurance policy on their financial wealth and independence. Only another US government-led gold bullion confiscation could pry these investors from their gold, and many investors have freed themselves of that fear by purchasing gold that has been deemed non-confiscatabale.

Historically, gold coins of rare and unusual value were exempt from seizure by our government, even in a time of crisis like the Great Depression, so these same types of coins would most likely be protected again. Contact us directly or call or toll-free number to learn more about the various categories of gold, and to take advantage of today’s lower gold price. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Unlike the Dow Jones Industrial Average, which has fallen drastically since revisiting 10,000 in September, the gold spot price has relentlessly risen since crossing the historic $1000 milestone. Today’s gold price is slightly lower than the historic high of $1153 per ounce, because some short-term investors decided to jump to the sidelines and take profits on their position.

Short-term investors who buy bullion sometimes liquidate their position when they see the gold spot price start to decline, but they do this only when they are positive that a strong valley will soon manifest itself. Buying and selling in quick increments means that traders have to re-pay bullion premiums and commissions, so it requires a keen eye on the gold market to make money with rapid-fire gold bullion trading.

Although gold bullion investors may be able to reap extra profits by exiting the market when a slight pullback occurs, long-term investors are better off sitting on their position until our economy shows signs of improvement. Gold bullion could be an excellent way to make profits if short-term inflation flares up, but investors who plan on a long-term hold are likely to do better financially with certified gold coins.

These coins track the gold spot price that is listed on www.Kitco.com and www.GoldPrice.net, but they also contain a numismatic value that has caused our government to deem these rarities non-confiscatable. If you are concerned that our dollar and our nation are up against long-term troubles that run much deeper than simple inflation, contact us today to protect your portfolio before our economy devolves further. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

It was only a few short weeks ago that the all-time high gold spot price was $1033, which was reached almost two years ago. After gold peaked at $1033, many Wall Street economists called for the yellow metal to retreat once again. Gold hovered in the $800-$900 range recently, but over the past two months gold bullion traded on the Commodities Exchange (COMEX) has increased by 14.8%. The dollar has continued to suffer brutal losses against a basket of other major currencies, so even investors leaving the gold market to take profits have not permitted the gold spot price to lie dormant or retreat.

US economists believe that the upcoming holiday season could spur more gold investing instead of gift buying, and the increased demand for the yellow metal could rare historic gold prices yet again. Retailers expect a third consecutive disappointing shopping season, and their expectations are mainly attributed to the higher unemployment levels and foreclosure filings. These economic indicators most likely point to consumers with less money and more worry.

Investors who have funds available to shift into safe-haven assets have frantically rushed to sufficiently balance their portfolios and get some gold in their hands before the entire nation realizes the severity of our nation’s economic situation. Our government could be forced to take drastic measures to salvage our nation’s future, so savvy, long-term investors are increasing their holdings in private, certified gold coins.

Certified gold coins are as liquid as bullion in over 120 countries, but they are deemed non-confiscatable and private by our government. If you require further diversification before our eco-political scene worsens, contact us today to find out the best route to safe-haven protection during these volatile times. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Gold prices have surged in recent weeks due to the dollar’s demise as well as investors’ heightened demand for safe-haven assets. Investors have become increasingly more wary about investing in dollar-backed assets and anything tied to the real estate sector, and they have instead chosen to supplement their holdings of privately held assets like gold and silver.

Much different than speculative gold exchange traded funds (ETFs) or shares of gold mining companies, privately held gold investments are viewed as insurance policies by many investors. Stock indexes, real estate values, and cash accounts have become tragically devalued throughout the last three years, so investors have sought alternative means to protect and even grow their wealth.

Some investors have decided upon physical gold as their back-up plan, because the yellow metal historically grew in value when our nation was mired in economic turmoil in the 1930s and the 1970s. Although savvy investors realize that anything could happen in the current cycle, the trend since 2001 has been for gold to consistently rise. Our recession has intensified the upward movement of the gold spot price, which has increased by 52% within the last 365 days as per www.Kitco.com. If you would like to give some gold lining to your portfolio, contact us directly for live quotes and expert assistance. 

Daily Updates Archive

Arthur McGuire

Senior Staff Writer - GoldPrice.net

The all-time high for the gold spot price is $1134, which was reached earlier this morning. Some analysts believed that the gold spot price would correct itself due to predominant selling, but such selling has not materialized because of the increased demand for safe-haven assets. Other assets are able to gain value during recessionary periods, but investors have the ability to privately and securely store physical gold. This is a hard quality to find in most investments, so security-oriented buyers who want control of their own wealth have flocked to gold. Merrill Lynch’s top technical analyst called for this to happen years ago, and experts from banks like JP Morgan and Bank of America have recently echoed the sentiment of a bullish precious metal market.

The gold price today is significantly higher than that of Friday afternoon, because the US dollar index has declined slightly. Higher demand and dollar devaluation are the main influencers of today’s gold price. The gold price is always available on the GoldPrice ticker, which runs around the clock for the benefit of household and institutional investors. If you would like to learn more about the gold spot price and how you can take a position in the gold market, call us toll-free to get your free, customized information packet and get started. 

Daily Updates Archive

Arthur McGuire

Senior Staff Writer - GoldPrice.net

Our dollar index is a representation of the value of the US dollar compared to a basket of six other globally used currencies. Those currencies are the euro, the Japanese yen, the British pound, the Canadian dollar, the Swiss franc, and the Swedish krona. The dollar index is used worldwide to determine if US currency is inflated, deflated, or steady. When the dollar gains value, it causes commodities that are priced in dollars, like gold, to decline. Conversely, when investors place less value on the US dollar, it requires more dollars to purchase gold and other commodities.

The law of supply and demand also plays an important part in the Kitco Gold Index. If you are buying for safety, security, and wealth preservation, then a certified coin investment may be a wise addition to your portfolio. Virtually all of the gold that has been mined throughout history still exists, which is dissimilar to most other commodities. Despite gold’s ability to outlast most other resources, it has still managed to consistently rise in value. Investors are seeking safe-haven assets that are a better store of wealth than stocks, bonds and commodities, and gold is one of these privately held resources. When there is less demand for gold, it decreases the gold spot price. When there is not enough gold to meet immediate demand, the price rises.

These two factors are further discussed and elaborated upon at www.Kitco.com. If you would like to learn more about the gold market and how to take advantage of gold prices before long-term inflation takes hold, register with GoldPrice.net and we will send you our award-winning investment tutorial, absolutely cost and obligation-free. 

Daily Updates Archive

Arthur McGuire

Senior Staff Writer - GoldPrice.net

The gargantuan gold purchase by India last week sparked the initial climb above $1100. The International Monetary Fund (IMF) sold 200 tons of gold to India, leaving the same amount in the IMF’s coffers to be sold sometime soon. Economists believed that gold prices would fall in response to the IMF’s sell-off, but the fact that one nation took so much gold off the market immediately boosted gold prices.

The IMF plans to sell 200 more tons of their holdings, and many have speculated that China will attempt to bid on the entire lot. If another 200 tons of gold are removed from the market, the $1400 gold spot price that economists believe we could see next year may materialize much quicker than they previously anticipated. The current historic gold price of $1119 could seem a lot less impressive in the coming months, so gold investors are strapped in tightly for the remainder of this cycle.

If the gold spot price continues to rise, investors who currently own gold could reap substantial profits to accompany the safety that their physical gold investment provides. To learn more about the historic gold price, contact us directly to receive our free gold investment tutorial. 

Daily Updates Archive

Arthur McGuire

Senior Staff Writer - GoldPrice.net

There was some profit-taking seen in the market, but to no great consequence. The Kitco Gold Price Index (KGPI) clarifies the amount of profit-taking that has been seen. The KGPI shows the gold price’s change in relation to the dollar index, which has a direct and inverse relationship with the greenback. It also shows the gold price change that is influenced by buying and selling, so it is easy to understand what is affecting gold bullion prices at any given moment. The KGPI is available to the public at www.Kitco.com, and this is a very helpful resource if you want a clear picture of how the gold spot price fluctuates.

Gold bullion prices move in the same direction as the gold spot price, and gold bullion bars and coins track the gold spot price very closely. Fair markup for gold bullion is between 4-9%, depending on the specific item chosen. PAMP-Suisse and Engelhard manufacture 0.999 pure gold bars in various weights, and the US Mint produces a number of gold bullion coins that are available. To find out which type of gold investment best fits your strategy, call www.GoldPrice.net to get your free Investor’s Guide To Gold Bullion Investing. 

Daily Updates Archive

Arthur McGuire

Senior Staff Writer - GoldPrice.net

• Euro

• Japanese Yen

• British Pound

• Canadian Dollar

• Swedish Krona

• Swiss Franc

The $1100 gold spot price that was first seen last week was a direct result of the falling dollar. Even though some investors have put their metals back on the market, the gold spot price has continued to rise. Economists believe that we could see a mild pullback near the end of November, but banks like Merrill Lynch and JP Morgan have called for the gold spot price to set more record highs in 2010.

The current gold spot price is $1107.80, and this is a $9.50 gain so far today. The gold spot price has consistently risen during the last three years, because investors who fear a worsening economy have purchased gold and other safe-haven assets. To learn more about gold’s preservation abilities during these stressful economic times for our nation, contact www.GoldPrice.net at 800-300-0715 to get your free 2010 Insider’s Guide To The Gold Market. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

Last year, many blue-chip economists called for $700 gold prices by the end of 2009. It is November 6, 2009, and the gold spot price currently resides above $1100. The Commodities Exchange (COMEX) gold spot price broke through the $1100 barrier today for the first time in history, and most market analysts now believe that the current rally is sustainable. It could even intensify, because demand for safe-haven assets like gold and silver is increasing more than previously expected. Precious metals are considered safe-haven assets because they offer private storage of wealth, and they tend to move inversely our traditional markets. When everything else within our portfolios fail, gold investments historically tend to rise.

By vesting 20-30% of your assets in physical gold, you may be able to protect yourself from future economic calamity. Investors who think that our nation is on the road to recovery and that the United States will continue to be the world’s dominant financial power are encouraged to invest in gold bullion. Investors who foresee a long-term recessionary period, another Great Depression or the possible collapse of our dollar, are advised to research certified gold coins. Contact www.GoldPrice.net directly at 800-300-0715 to learn more about the various types of gold investing. 

Daily Updates Archive

Stewart Lawson

Senior Staff Writer - GoldPrice.net

American Gold Eagle prices have skyrocketed this week, and the Certified Gold Exchange is trading the coin at $1169 per ounce. This is a 5.8% increase over Friday’s levels, and economists expect the modern-day bullion coins to increase by 12-18% within the next year.

Two factors are driving the current Gold Eagle rally, and neither of these factors looks to disappear anytime soon. The rising gold price has forced all bullion dealers to raise prices on their inventory, and the US Mint recently announced that they will not produce the $50 bullion coin until there are enough gold blanks to produce the coin in sufficient supply to meet US consumer demand.

American Gold Eagle prices track the active Commodities Exchange (COMEX) spot price, and they also carry a small premium that is added by the US government. Fractional coins tend to have a larger premium, so it should come as no surprise that the US Mint is still producing and selling the ½ oz., ¼ oz., and 1/10 oz. American Eagles. Individuals who want to track American Gold Eagle prices and purchase these coins for their portfolio are encouraged to visit www.USMint.gov or www.CertifiedGoldExchange.com. Call 800-300-0715 now to get a live quote for modern-day or historic Gold Eagle coins. 

Daily Updates Archive

Arthur McGuire

Senior Staff Writer - GoldPrice.net

Many economists believe that China will also purchase a large amount of the IMF’s gold, because China’s gold holdings are presently less than 2% of its’ total assets. Many analysts previously thought that the IMF’s gold would go onto the open market, which could saturate the available supply and drive the gold spot price lower.

The gargantuan purchase by India has instead elevated precious metal prices, and the current spot price of $1092.40 is just below the historic high gold price. Economists expect profit-taking to remain at a standstill until the rally pauses, and the drastic increase in gold futures contracts gives credence to that theory.

JP Morgan said in a note to clients recently that the Commodities Exchange (COMEX) gold spot price could exceed $1100 before the end of the year, and mainstream US economists have called for spot prices to surpass $1200 in 2010.

If these figures materialize, investors who presently own gold could reap substantial profits to go hand-in-hand with the safety that their physical gold investment provides. To learn more about the historic high gold price and what effect it has on gold investments, contact www.GoldPrice.net directly at 800-300-0715. 

Daily Updates Archive

Arthur McGuire

Senior Staff Writer - GoldPrice.net