After yesterday’s almost 400 point drop on the Stock Market we know what traders think of the stimulus plan… No stimulus here! Gold is up another $8 and is looking like it’s getting ready to test $930 then $950. The treasury has the money presses running full steam and Inflation will be the end result. Smart Investors are starting to realize there is only one place to be and that is Gold and Precious Metals. A good place to start, is where I get my bullion,and get a free gram of Gold to boot just for opening an account… Good Investing – jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

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Source: Mineweb.com

IMF may no longer need to sell its gold

The IMF does well in difficult times for the global economy as its income to meet its internal budgets arises from loans to nations in economic difficulties. In such times IMF loans increase, as does its income, which could mean there is not such a pressing need for the Fund to sell its gold says London’s VM Group.

Author: Lawrence Williams
Posted:  Wednesday , 11 Feb 2009

LONDON – 

Some two years ago the gold price was hit, albeit temporarily, by the announcement that the International Monetary Fund would sell 403 tonnes of gold as the basis of an endowment, the interest on which would be used to help defray the shortfall in the IMF budget.  Indeed, at the time the Fund was suffering as its loan book was shrinking, eventually falling to SDR5.8bn at the end of the first quarter of 2008.  The IMF does well when the world economy does badly, but conversely does badly when the world economy does well and at that time the global economy seemed to be riding high.

The reason the IMF does badly when the world economy does well is a simple one.  The Fund relies on income from the loans it puts out to countries in economic difficulties for its day to day running expenses.  When the Global economy is strong, countries can repay these loans and there are few takers for new ones, so income shrinks.  After several years of strong global growth the Fund’s loan book had shrunk – hence the need for the new source of funding recommended by the IMF’s Committee of Eminent Persons to Study Sustainable Long Term Financing of IMF Running Costs, chaired by Sir Andrew Crockett, former head of The Bank for International Settlements (BIS). This is the Committee which recommended the sale of IMF gold reserves, the interest on the revenue from which could be used to plug the Fund’s own internal budget deficit.

But, since the middle of last year the global economy has been in virtual freefall and the IMF has again been called upon by a number of countries to help prop up their economies with major loans.  From the low of SDR5.8bn noted above, at the latest count the IMF now has loans out totalling $17.8 bn – and this figure is much more likely to rise than fall for the foreseeable future.  Indeed it may well double or more.

In a briefing to clients from London’s VM Group, the Group’s analysts suggest that, with the increase in income currently being generated, the IMF no longer has a short term need to boost its income in other forms – such as with interest from the proceeds of a gold sales programme – and there will be certainly less urgency to implement such a programme.

Notwithstanding the IMF’s improved internal funding circumstances the VM Group believes though, that “the Fund would still like to sell, largely because the Crockett Committee pinpointed some structural problems in the way the IMF financed itself. The Committee criticised the IMF’s funding strategy, not just on the ground that it no longer covered its expenditure, but because it was too concentrated, wasn’t related to its expenditure (in that other functions were covered by unrelated interest income), and – crucially – that it lacked predictability, soaring in bad times and falling in good times.”

But – and the VM group reckons this is an important ‘but’ – “..the Fund is not the only interested party in the question of IMF gold sales. It was always considered the US’s share of IMF votes, has an effective veto. In the past, Congress has been against gold sales, not just because of the impact on the gold price (and gold-mining in the US and elsewhere), something the Committee was at pains to say would be minimised, but also through general unease about funding commitments to international financial institutions. Some US legislators will certainly pose the question …. now that the IMF’s income is much better, does it really need to sell any gold? Moreover, the Fund might possibly have too much money after the financing reforms, if its loans were to continue to increase.”

This is obviously a speculative assessment, but not one without merit.  A major improvement in IMF finances may well lead to a ‘no sale’ directive by the US Congress given that there will likely be many in the legislature uncertain of the impact of such sales on an already very fragile economic system.  Leave well alone may be their feeling if the IMF is seen to be fully self funding again.

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My Note: Is the Treasury Bubble Getting Ready to Burst? Read between the lines in this next article and you decide… jschulmansr

China Needs U.S. Guarantees for Treasuries, Yu Says 

Source: Bloomberg.com Worldwide

By Belinda Cao and Judy Chen

Feb. 11 (Bloomberg) — China should seek guarantees that its $682 billion holdings of U.S. government debt won’t be eroded by “reckless policies,” said Yu Yongding, a former adviser to the central bank

 

 

 

 

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The U.S. “should make the Chinese feel confident that the value of the assets at least will not be eroded in a significant way,” Yu, who now heads the World Economics and Politics Institute at the Chinese Academy of Social Sciences, said in response to e-mailed questions yesterday from Beijing. He declined to elaborate on the assurances needed by China, the biggest foreign holder of U.S. government debt.

Benchmark 10-year Treasury yields climbed above 3 percent this week on speculation the government will increase borrowing as President Barack Obama pushes his $838 billion stimulus package through Congress. Premier Wen Jiabao said last month his government’s strategy for investing would focus on safeguarding the value of China’s $1.95 trillion foreign reserves.

China may voice its concerns over U.S. government finances and the potential for a weaker dollar when Secretary of State Hillary Clinton visits China on Feb. 20, according to He Zhicheng, an economist at Agricultural Bank of China, the nation’s third-largest lender by assets. A People’s Bank of China official, who didn’t wish to be identified, declined to comment on the telephone.

Clinton Talks

“In talks with Clinton, China will ask for a guarantee that the U.S. will support the dollar’s exchange rate and make sure China’s dollar-denominated assets are safe,” said He in Beijing. “That would be one of the prerequisites for more purchases.”

Chinese Foreign Ministry Spokeswoman Jiang Yu said yesterday that talks with Clinton would cover bilateral relations, the financial crisis and international affairs, according to the Xinhua news agency.

The dollar fell 0.6 percent to 89.96 yen today on concern that the U.S. government’s bank-rescue plan will fail to revive lending. Treasuries declined as investors prepared to bid for a record $21 billion sale of 10-year notes today. The yield on the benchmark 10-year note rose three basis points to 2.83 percent.

Currency Reserves

“These comments are some sort of a threat but of course China can never get such a guarantee,” said Thomas Harr, a currency strategist at Standard Chartered Plc in Singapore. The U.S. may assure China that it will clean up the financial system and that it “won’t push for a weaker dollar but they can’t promise not to increase the fiscal deficit,” he said.

U.S. government bonds returned 14 percent last year including price gains and reinvested interest, the most since rallying 18.5 percent in 1995, according to indexes compiled by Merrill Lynch & Co. Concern that the flood of bonds would overwhelm demand caused Treasuries to lose 3.08 percent in January, the steepest drop in almost five years, Merrill data show.

China’s loss of more than $5 billion from investing $10.5 billion of its reserves in New York-based Blackstone Group LP, Morgan Stanley and TPG Inc. since mid-2007 may increase its demand for the relative safety of Treasuries.

“The government will be a net buyer of Treasuries in the short term because there’s no sign they have changed their strategy,” said Zhang Ming, secretary general of the international finance research center at the Chinese Academy of Social Sciences in Beijing. “But personally, I don’t think we should increase holdings because the medium- and long-term risks are quite high.”

Fed Buying

Bill Gross, co-chief investment officer of Pacific Investment Management Co., said on Feb. 5 the Federal Reserve will have to buy Treasuries to curb yields as debt sales increase. Fed officials said Jan. 28 they were “prepared” to buy longer-term Treasuries.

“The biggest concern for China to continue buying U.S. Treasuries is that if Obama’s stimulus doesn’t work out as expected, the Fed may have to print money to cover the deficit,” said Shen Jianguang, a Hong Kong-based economist at China International Capital Corp., partly owned by Morgan Stanley. “That will cause a dollar slump.”

China’s foreign-exchange reserves grew about $40 billion in the fourth quarter, the least since mid-2004, as an end to yuan appreciation since July prompted investors to pull money out.

The world’s third-biggest economy grew 6.8 percent in the fourth quarter, the slowest pace in seven years. Policy makers announced a 4 trillion yuan ($585 billion) economic stimulus plan in November to spur domestic demand.

Linking Disputes

Yu said China has no plans to channel its reserves toward stimulating its own economy because its trade surplus is sufficient to fund any import needs. China’s trade surplus was $39 billion in January.

China “should diversify its reserves away from U.S. Treasuries if the value of China’s foreign-exchange reserves is in danger of being inflated away by the U.S. government’s pump- priming,” he said.

China may try to link trade and currency policy disputes to its future investment in Treasuries, said Lu Zhengwei, an economist in Shanghai at Industrial Bank Co., a Chinese lender partly owned by a unit of HSBC Holdings Plc.

U.S. Treasury Secretary Timothy Geithner accused China on Jan. 22 of “manipulating” the yuan to give an unfair advantage to its exporters. The currency has dropped 0.16 percent this year to 6.8342 per dollar, following a 21 percent gain since a peg against the dollar was abandoned in July 2005.

“China can also use this opportunity to get a promise from the U.S. not to make inappropriate requests on bilateral trade and the Chinese yuan,” Lu said. “We can’t afford more yuan appreciation as the economy is facing a serious slowdown.”

To contact the reporters on this story: Belinda Cao in Beijing at lcao4@bloomberg.net; Judy Chen in Shanghai at xchen45@bloomberg.net.

Last Updated: February 11, 2009 04:04 EST

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Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

Steve Palmer: Juniors Staged to Climb from New Ground Floor? – Gold Report

Source: The Gold Report

 Whether irrational exuberance or the faltering dot-com industry triggered it, the economic downturn of 2001 hit junior resource companies hard. They bounced back in a big way. “Downturn” understates the current scenario, but AlphaNorth Asset Management President and CEO Steve Palmer sees similarities. He looks forward to taking advantage of opportunities “to get in on some of what has now become the new ground floor” and make some “tremendous gains.” While he anticipates more bad news on the employment front, he also tells The Gold Report followers that he believes “we’ve avoided the abyss” and confidence is returning.

The Gold Report: Tell us about your outlook for the natural resource sector for 2009 and your thinking about the primary market of commodities—precious metals, base metals and so forth. Also, are these markets separate or all tied together?

Steve Palmer: 2008 was clearly a disaster for almost everybody. I manage a generalist fund, so it’s not focused only on resources. At the beginning of 2008, I was fairly cautious on resources. I thought the easy money had been made and the risk-reward wasn’t that good compared to some other sectors. However, with the pullback in many of the commodities, many of the resource companies are back to marginal cost of production and the share prices have been pounded so much—in many cases, below their cash value—that those resource opportunities are much more interesting at this stage.

The index I track for the small-cap focused fund I manage is the TSX Venture Index, which is the most comparable benchmark. This index has declined about 80% peak-to-trough. I think it peaked in the spring of ’07 and last year was down over 70%. That’s probably one of the worst-performing indices in the world as it’s heavily weighted toward resources. A lot of the junior companies in Canada are resource companies, probably a little more than 50%. So I think it’s a great opportunity to get in on some of what has now become the new ground floor.

The last time this occurred, back in ’01, I was managing a small-cap fund at a major financial institution that was invested heavily in the junior technology and biotech stocks. There was a significant correction; the NASDAQ declined by 80% over a two-year period and dragged the small caps down with it. The small cap fund I was managing at the time went through a rough patch and bottomed in April 2003, but was up more than 900% over the next four years. So when I look forward from where we are today, I see a similar opportunity for a period of tremendous gains, significantly above what you’d normally expect on a long-term basis.

TGR: But it’s such a different market now. Part of what drove the commodities move earlier in this decade was global growth. What’s the driver going to be in ’09?

SP: I think stabilization. The areas of big scares in the fourth quarter—the financial system and credit markets—needed to stabilize and that seems to have occurred. Credit spreads have come down and indicators of panic (such as T-bills with a negative yield) have subsided. People aren’t panicking like that anymore; it seems we’ve avoided the abyss and we have moved on to addressing the economic downturn.

TGR: Are you looking for a rebound?

SP: Not that we’re out of the woods yet, but there could be a big bounce. Governments are being very aggressive in trying to get things moving again. The stock market hits bottoms before you see the worst of the job numbers, though, many months before. That’s occurred almost every time in the past. This time, too, we can expect to see unemployment keep getting worse after the market has long since bottomed.

TGR: Do you think we saw a bottom in November and December, particularly in the junior resource sector?

SP: I definitely think it was a bottom, at least a short-term bottom. The level of panic was unprecedented. Compounding that was the timing of tax-loss selling that had to be done before year-end, so some stocks plunged to insanely low levels. This wasn’t due to fundamentals—it was all liquidity-driven, tax-loss selling driven and forced selling by various funds.

But as I said, I think most of that’s behind us. We’re in a more normal market and people are starting to look at fundamentals again. From the bottom that the TSX Venture hit, we’ve already had a nice little bounce, more than 25%, in just a few weeks. The larger-cap stocks bounced, too, but only half as much.

TGR: What about the broader markets, the S&P and Dow? Have they bottomed, too?

SP: I focus more on the Canadian markets. With the narrow number of stocks and the way the index is calculated, I think the Dow is an irrelevant benchmark. I don’t even look at that index. The S&P is a broader measure of U.S. large caps. I don’t expect it to go rocketing back up, but the bottom from November has held. I do a lot of technical analysis work and the charts are indicating to me now that, after the initial January bounce, we’ve pulled back fairly significantly. A lot of people are calling it a re-test of the low. It looks as if the S&P has bounced off 800 and it wouldn’t surprise me if it traded up to 1,000 before heading back down again in the spring. It will probably trade in a channel this year.

TGR: Harking back to your stability theme.

SP: Yes. And once we have some stability, people will regain confidence. There’s going to be a lot of money made in some areas of the market. Recently the golds have done really well, and takeouts will occur, especially when we have the very depressed juniors.

Greed will come back quickly, as well. We’ve had several greed cycles just in the last decade. We had the whole junior bull market around Bre-X in 1987. That whole thing imploded. The benchmark at the time was the Vancouver Stock Exchange Index, which was the measure in Canada of all these resource plays. It declined 75% after the Bre-X blew up. It wasn’t long after that when everybody scrambled to buy technology stocks in ’99, and then they imploded. Then in 2002, we started the latest bull run in commodities. So we’ve had three major up-and-down cycles in the last 10-12 years. It will occur again.

TGR: Does your technical analysis give you an idea where the various commodities will be in 2009?

SP: Yes. I use the charts a lot because commodity prices are so hard to predict; so many factors are involved. Those who set commodity price targets are wrong 80% of the time. If you’re contrarian, too, it usually works. For example, during a broker-sponsored dinner with 30-plus portfolio managers at the Prospectors & Developers Association of Canada (PDAC) convention in early March last year, they went around the table and asked everyone what they thought gold would be at the next PDAC. Gold was around $960 at the time and everybody was forecasting prices of $1,500 to $2,000. It’s almost a year later now and the 2009 PDAC convention is coming up. So we’re almost there right now and there were only two people at that dinner—I was one—who predicted a lower gold price. I picked $885. Where it makes sense, I like to go against the crowd. It looks to me like many of the commodities are going to lift in the short term. I wouldn’t be short.

TGR: So where do you see gold going in ’09?

SP: I trade gold almost exclusively—on technicals. It’s very much correlated inversely with the U.S. dollar. One gold analyst plotted the correlation since January ’06 and it was minus 0.926, almost perfectly inversely correlated since January ’06. All you need to do is put up two charts side by side—gold and the U.S. dollar—and you can see it clearly. You don’t need to calculate any fancy correlation numbers.

TGR: So you expect gold to be good going forward, considering all the troubles the U.S. dollar has?

SP: I have been quite negative on the U.S. dollar and thus quite bullish for most of the past few years on gold. I picked a lower gold price a year ago for two reasons: 1) the USdollar had made a significant move lower and was due for a rebound (technicals), and 2) it was a contrarian call as everyone was bullish. However, the direction of the U.S. dollar seems harder to predict now; it could be in for a period of strength. If the U.S. economy leads the way out of this global mess, the U.S. dollar will be strong and that’s not good for gold.

TGR: So if the U.S. leads us out of this global problem, you’re saying the U.S. dollar will be strong and that would put negative pressure on gold?

SP: Yes. That may be offset somewhat by inflation concerns or the “fear” trade persisting for a period of time. I’m not predicting that gold’s going to collapse or anything, but I’m not a super bull like a lot of people. We see a fair number of gold bugs around.

TGR: What about some specific stocks that you’d have The Gold Report readers take a look at?

SP: Colossus Minerals Inc. (TSX:CSI) is one I really like. They’ve been getting some phenomenal grades drilling on their property in Brazil. Garimperos had been hauling gold out of a big pit created there; it’s thought that they took 2 million ounces of gold out of the pit; very high-grade zones of several thousand grams per ton in some cases. After the pit got flooded, it was in limbo with the locals for many decades. Colossus got their hands on it a couple of years ago and went back and started doing re-assays of some of the historical drilling results and re-drilling, as well. The grades they’re getting are quite good. It’s not just gold; they have very high platinum and palladium grades, as well.

TGR: So Colossus came in, acquired the property, got rid of the water and—

SP: No, the water’s still there. It’s like a little lake, actually, in the pit. I think they’re drilling southwest of the pit, and the gold zone continues there. They’re currently considering drilling from a barge, too, to see if they can intersect some of the zones that were being mined before.

TGR: How deep is the lake?

SP: It’s probably about 100 meters deep. That’s another thing. The gold zones are very near surface, which lowers the mining costs significantly, as well. So it would be a very profitable operation because it’s so shallow and very high grade.

TGR: Do they have a 43-101 on this?

SP: No, they’re working on that. They just started Phase II drilling and will be doing a 43-101 report this year. The company has enough money to carry out their Phase II over the balance of this year. The market cap is about $70 million. They could have several million ounces of gold equivalent there. I would consider a takeout highly likely once they get a little more advanced.

TGR: By one of the majors?

SP: Yes, I think several of them have been on the property already.

TGR: Interesting. Another company to look at?

SP: Orko Silver Corp. (TSX.V:OK) is another, a $50 million market cap company. They have a property in Mexico they’ve been drilling, and should have an updated 43-101 report out any day now. It should add to the current inferred resource of 103 million ounces. A lot of the more senior names have done quite well recently. Some of them have doubled in the last couple of months. People are starting to look lower down on the market cap scale at some of the ones that haven’t moved as much. So I think companies in the range of $50 million (where Orko is) and $70 million (where Colossus is) will be on people’s radar screen, as well.

TGR: How far advanced is Orko? Is it close to other mines?

SP: Of course, Mexico is noted for its silver, and it has many, many silver mines. Orko is in an area with many mines around. They’re at the stage now where they’re proving up a resource and then they’ll do a scoping study.

TGR: Do they have sufficient cash in the bank?

SP: They have $3 million in cash right now. They raised money last summer at $1.65 and the stock is 55 cents now.

TGR: Looking at the technical chart, they seem to have been building a base since October. It hasn’t had the move that a lot of other juniors have.

SP: Exactly. That’s why I like it. We’ve been picking away at it recently because I think it’s good for a move. It could double quite easily in the next couple of months. Most of the precious metal names, like this one, I typically don’t hold for many years unless it’s a story like Colossus where I have a lot of conviction that they’re building something that’s going to be big and maybe taken over one day. Some of my positions, as with Orko, are initiated on technical analysis work but are also supported by fundamentals. Combining the commodity and the stock, this one looks like a good opportunity to get in on a timely basis and possibly double your money and move on.

TGR: Any others?

SP: Another one that has a similar chart is Silverstone Resources Corp. (TSX.V:SST). It’s a royalty company, similar to Silver Wheaton, where they take the silver and gold from companies that have producing base metal mines with silver and gold as byproducts. So they typically buy the silver at $4 and the gold at $300 and then they can sell it into the market. There’s little overhead required and you get your exposure to the commodity. In this case, with only $100 million market cap, Silverstone Resources is less liquid and trades at a much lower multiple than Silver Wheaton. I think Silver Wheaton’s trades around 15 times cash flow and this one is close to three times 2009 cash flow.

TGR: And like Silver Wheaton, Silverstone Resources either has capital or access to capital?

SP: It’s small working capital, but they have agreements to buy from these three mines and then they resell. It’s just the timing of when they get paid, really. There’s not much capital required. It’s a royalty play at the moment. It’s a very low cash flow multiple, lower risk. They probably would need to raise a little more capital on the back of a new off-take arrangement, which would be another avenue or catalyst to move the stock higher in the future.

TGR: What about any energy plays?

SP: One of my favorite energy names would be Sea Dragon Energy Inc. (TSX.V:SDX). They’re currently drilling a well in the Gulf of Suez that we should have results on in a matter of weeks. It has a one-in-three shot at success. It IPO’d at 60 cents. It’s currently trading at 14 cents. After they spend the money on the well, the cash per share will be 17 cents, so it’s trading below cash, assuming a failure. So there could be some significant gains if they hit on this well.

The management team has done it before: The same guy (Said Arrata, Sea Dragon Chairman and Director) was behind Centurion Energy, which was a huge success and taken out for over a billion dollars a year or two ago. He’s very well connected in Egypt. Sea Dragon is looking at other opportunities to get in on where junior companies are starved for cash, given that they have a significant amount that they raised on their IPO, $35 million I think. Even after drilling this well, they’ll still have a lot of cash left and could get in very cheaply on other opportunities in the area.

Steve Palmer and Joey Javier, an investment team since 1998, took three key assets—their excellent track record, their experience and their belief that exploiting inefficiencies in the Canadian small-cap universe would produce superior long-term equity returns—to AlphaNorth Asset Management, launching the Toronto-based investment management firm in August 2007. By year-end 2007, the long biased small-cap hedge fund they built made its debut. Until Lehman Brothers’ liquidated, credit markets froze, massive investor requests for redemptions forced hedge funds to sell out of their positions and “volatility” no longer came close to describing the frenzy in financial centers, the fund was flush and its investors were as happy as clams. Its first seven months netted a return of 35.6%, significantly outperforming the major Canadian indices. During that period, the TSX Venture Index declined by 3.7% and the TSX Composite Index rose by 7.4%.

Steve, who is a Chartered Financial Analyst, earned his BA in Economics at the University of Western Ontario. After starting in the investment community as a research associate, he moved to a major financial institution in mid-1998, where he met Joey and built his career. As Vice President of Canadian Equities, he managed assets of approximately $350 million, including a pooled fund that focused on small-cap companies.

Want to read more exclusive Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Expert Insights page.

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Gold Is Entering An Accelerated Trend Channel – Gold Report

Source: The Gold Report – from/by: Oliver Tischendorf of Tischendorf.com

Gold has history on its side. It is a proven way to preserve one’s wealth over time. It acts like an insurance and it is highly unlikely mankind’s behavior during the last 6,000 years is going to change anytime soon. Some things never change. Two of those things are human nature and gold’s capacity to preserve one’s purchasing power.  

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That said gold has recently reached new highs in various foreign currencies. The chart of gold in Euro terms tells the story of what is to come. Don’t take this lightly. This is an important event as new highs typically attract more buying. If the Europeans start allocating more funds to physical bullion demand will increase drastically and gobble up supply. It is reasonable to expect additional upward pressure for the price of gold. Physical accumulation is accelerating on a worldwide basis. Keep in mind gold is a very tiny market compared to the equities market. A change in asset allocation resulting in a small increase to bullion exposure could easily double worldwide demand for gold bullion investment purposes.

A story hitting the wires recently is that: Greenlight Capital’s founder, David Einhorn, is finally taking his grandfather’s advice. The $5.1 billion hedge fund is buying gold for the first time amid the threat of inflation from increased government spending. Einhorn fund’s recent decision to invest in physical gold bullion is testament to increased awareness of gold’s bullish long term trend and it looks like this is only the beginning to added buying pressure for gold bullion.’ For full coverage of the story click here.

It looks like the price of gold in US Dollar terms is merely lagging other currencies as the US Dollar has been very strong lately. It is still early to draw conclusions as the US Dollar could stay stronger than most people expect but the new accelerating trend channel looks to be a valid one.

So what it all comes down to is that worldwide accumulation of physical gold is accelerating. Hence the odds the gold price is going to accelerate as well are rather high.

If you haven’t built a physical bullion position yet now is a good time to think about doing so. I typically recommend holding at least 5% of one’s liquid net worth in gold bullion held in your own possession. Increasing that percentage up to 20% isn’t that bad an idea either. Although the markets look like they might want to stage some kind of rally right now taking a longer term perspective indicates the gold trend is going to make you more money than buying the S&P500 via the SPY.

Gold should reach new highs in US Dollar terms soon following the lead of foreign currencies like the Euro, the Canadian Dollar, the Australian Dollar, the Swiss Franc and the British Pound Sterling to name a few. As long as the lower trend line of the new dotted trend channel is not breached ‘the trend is your friend’ and you should hold on to your gold bullion position. You could use that level to protect your position with a stop loss.

If you want to be more aggressive you should consider buying silver bullion. The silver market is much smaller than the gold market so the market is considered to be a riskier one. But once the public is going to stress silver’s monetary significance as opposed to viewing it simply as another commodity silver prices will increase significantly and should ultimately outperform gold. I recommend closely watching the gold – silver ratio for clues. Historically the ratio has showed to be lower than the actual one. Watch for the ratio to go back to the 55 level and overshooting to the downside as soon as silver garners more interest.

You can easily keep track of the three charts and how they evolve over time by visiting my public list.

Subscribers to my free newsletter get an email notice whenever I buy or sell stocks.

Olivier Tischendorf
http://www.tischendorf.com/

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As the last article said now is time to accumulate Gold, do so here and Get 1 Free Gram just for Opening an Account!

Catch the New Bull! – Buy Gold Online – Get 1 gram free! – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

Good Investing! – jschulmansr

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