Even Steven Day

Both gold and silver ended nearly even steven, despite a strong day from the dollar. Trading on both continues to be about inflation hedging and speculation. Demand is of course low as the economy struggles, but the shadow of inflation continues to lurk.

Combined with the struggling dollar, high US debts and inflation; investors continue to see gold and now silver as a safe move. The question is, if inflation is not seen and the economy begins an uptick, how quickly will gold and silver correct? That is as they say the million dollar question. However, with China clearly making a push against the dollar, the Obama administration which holds the spend to get out of the recession theory and the continued world turmoil, any uptick may be short lived and minor at best.

As of right now, most people recommend holding steady, buying on any form of correction and continue watching very closely.

Gold Closes on Record High in London

Gold closed at $1064 per troy ounce in London. Once again the driving force behind the precious metal's surge was the falling dollar. The American greenback dropped against the euro, driving investors towards gold.

There really seems nothing steaming the tide of the falling US dollar. As the United States pushes toward larger deficit the push out of the dollar will likely continue. The key factor in this commodity bull market and falling dollar is the presence of Asia. Never before has there be an economic power challenging the United States like China. Because of China, the historical indicators of the past are nearly null and void as their economic growth has been stunning.

Gold Milestones

This is a great article from Reuters . It shows the run of gold over the last few decades, showing how quickly things can turn up and down. Something of note however, is the influence of China as a new economic power. Even during the Soviet era, their economic influence was nowhere near what the Chinese have accomplished. Their presence is changing everything, including the continued decline of the dollar.

China Economic Growth in Energy

The Chinese just keep growing in all segments. The question of what type of the economy they are, gadget, small goods are a real world player is now clear. Anyone who denies this is fooling themselves.

Gold on a Run

The rampant reports of the dollar being phased out as the oil currency sent gold on an expected run today. The precious metal finished the day at $1042 per ounce. It's partner silver was right behind, going over $17 per ounce. The run came after a report that the Chinese along with other nations are working a deal that will phase the dollar out as the currency of choice for oil trade. Making things even more interesting was the fact gold was added to rumored equation.

This would of course explain the Chinese move to buy up gold and prompt their citizens to do the same. China is making a major push to become the world's number one economic power and they are succeeding. It is time for the United States to work closely with the Chinese as the two become more reliant on each others' economic stability. Interestingly enough, as these powers race in the economic world and create economic allies, the ideal of a more stable, peaceful world draws a bit closer. Nothing promotes peace more than economies which are reliant on each other.

Gold and Silver: Bear v. Bull

There still seems to be some mixed feelings as to if the gold/silver market is bullish or bearish. Indicators are mixed, leaving many scratching their heads. Here's what we do know. Gold has stayed at are near $1,000 this entire month, silver continues in the $16-17. The dollar shows little signs of life and is taking another beating against the Euro and other foreign currencies. However, on the flip side, how long before investors decide it is time to sell and take profits. This could create a self induced correction that history shows, can be sharp.

From reading and listening most believe if gold and silver continues to hold steady, then it is time to jump in and buy as that signals a sign the prices are going to remain. This really seems to the direction as so many signals (including the demands in India and China) indicate a bull market with an extended life. The best move right now might be sell, take some profits and wait. If the correction comes jump back in hard, if it does not slowly re-invest a little at a time. Remember hogs get slaughtered.

China Going Nuts Over Gold and Silver

Reports are flying all over the business world that the Chinese government is creating a gold and silver rush in the homeland. According to the website MineWeb.com, the national television of China is promoting the ease and importance of individuals purchasing gold and silver. This a dramatic shift for a government that just a few years ago prohibited individuals from owning precious metals. It is also an indication that government has the metals and are looking for buyes. Add this to Bloomberg report about China increasing their gold and silver positions and it appears the Reds are turning colors.

Even more interesting was a report from David Gallard of the Casey Report that China has become nervous with their holdings in the American Dollar and have apparently begun exchanging the cash for gold.

The circumstantial evidence that a big player is on the gold scene is overwhelming; the rapid increase in gold prices is a clear indicator. Second, there have been reported shortages around the world, meaning someone is buying large quantities. Gallard noted in his article last year the he called the Northwest Territory Mint and inquired about gold. The receptionist after sometime, noted to Gallard the Mint was back logged 30,000 orders, not money, but orders and new orders would take 16 weeks to process. Add this to the US Mint halting sales of the American Gold Eagle and it appears the demand is certainly extreme.

So what does this all mean? It is looking more and more like the floor for any correction is rapidly going up. It also means the boom in gold looks alive and strong. If China is in fact moving in this is good news for gold and silver investors. It is bad news for the American dollar, a currency that continues to get hammered on the international scene.

Gold Price...Where's It Going?

If I could answer the question of where gold is going, well then I wouldn't be posting on this blog. Instead I would be sitting on the beach, with my lovely wife, sipping a Corona. However, all indications are pointing to up, up and up for gold prices.

Now here are some reasons to start buying gold.

Let's take a look at the world around us. First, the banking system remains unstable at best. The problems which hounded the financial system remain in place. No, not lack of regulations, but the continued increase of it. Barney Frank is insistent on keeping Freddi Mac and Fannie Mae alive and kicking. This in essence allows the government to continue pressuring or allowing banks to continue making the borderline loan an easy transaction. So long as these two government entities are buying up bad loans, banks will continue giving them, keeping the entire situation unstable. Secondly, as the dust continues to settle, look for the financial sector to be monopolized by a select few; aided by the government.

This is nothing more than one symptom of an infested economy. Perhaps the looming 800 pound gorilla is the policy of printing money to pay for the debt. This practice can have devastating effects on the economy, creating hyper-inflation. The theory is simple, more money dilutes the value of the dollar, pushing up the prices of goods and services at a rapid price.

The strain on the investment class or rich, is growing to a breaking point. As the policies of this nation create more and more debt, taxes must and will be raised. This will drain money from those who can create wealth and place it squarely in the hands of the government, which cannot create wealth.

Finally, America's debt is no longer an in-house debt. Folks, our debtors are foreign nations specifically, China. This has in essence created a situation where our actions must be explained, at the least, to a foreign government. This situation is self explanatory.

The foundations of the American economy are rattled and this means one thing; gold. The top investors will continue running to gold, so as common investors, follow them. I am not supporting a complete pull out of the stock market, but instead shift a percentage of investment money into gold. It is the wise and prudent action until we have clarity to the direction of the new economy.