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My Note: Gold is testing it’s new base of $825 to $840 level, if Gold Hold here then our next target will be $900-$940. After it clears that and yes I am bold enough  to make that prediction, then watch out! I have heard predictions of $1000, $1200, $1600, even $2000 and above. On a seasonal basis Gold usually makes it’s low in Nov. and then has a great rally through the 1st and even 2nd quarters of the following year. My prediction is that we should see Gold somewhere in the $1250 range on this next leg of the rally. Next, the Gold to Silver Ratio is 80-1, historically it has been averaging 50-1. If the ration tightens only to 60-1, then at $1250 gold we should see $25 silver. Platinum, not to be forgotten will resume it’s normal premium to Gold level (see article below) and I think with $1250 Gold we will see $2200 to $2500 Platinum. Bottom line if you haven’t gotten in (invested), NOW would be an excellent time! Now for the latest news… Enjoy! – jschulmansr

Gold and Silver Forcaster Market Alert!

By: Julian D. Phillips of Gold/ Silver Forcaster.com- Global Alert!

Gold has now entered the next and major leg of the long-term gold bull market after correcting down from $1,035.   We believe it is now targeting $1,000, initially.   This will be achieved with pullbacks and periods of consolidation.

 

We believe, too, that gold shares will benefit to a greater extent than gold itself, in the next moves up.  In particular, we feel that soundly based gold “Junior” mining companies will benefit strongly.

 

Please refer to our latest issues for our preferred shares.

 

The move has been triggered by the clear signal from the Fed that the deflationary spiral gripping the global economy is far more serious than realized until now.   The initial impact has already been seen in the precipitous fall of the U.S.$ to over $1.41 so far.   As repeated attempts to re-invigorate the flow of liquidity have failed, the U.S. Federal Reserve had to do more, much more. 

 

q       The Fed’s interest rate cuts and ‘Quantative Easing” will soon be followed by central banks across the world.  

q       The swamping of the global economy with liquidity will stem deflation, but will also badly damage confidence in the world’s monetary system and give rise to explosive inflation.  

q       The time it takes to reflate the global economy will be far shorter than most commentators expect.  

q       The strains that the world will now feel, particularly in the different world economies, will become in many instances, unbearable, so we expect to see restrictive local action in those economies to manage the huge capital flows that will be experienced.  

 

All of these prospects are very positive for gold.

 

We last issued a similar Alert early in September in 2007.   History shows how correct we were!     

 

This alert is to prompt you to act now before the market really takes off.

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Gold Stock On The Move

By: Brad Zigler of Hard Assets Investor / Brad’s Desktop

Real-time Inflation Indicator (per annum): 10.5%

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Why The Bull Market is Far From Over

Source: Gold Forecaster.com

 


Some talk of the end of the credit crunch. Some say that the gold bull market has suffered severe damage, which will affect its long-term prospects. If we were to accept these statements then it would appear that the gold ‘bull’ market is over. But are these statements acceptable and do they reflect the true picture underlying the gold [and silver] markets?

To get the proper perspective let’s stand back
and look at the ‘BIG’ picture.


Is the Worst Over?
Credit Crunch Not according to the I.M.F. An assessment by the International Monetary Fund says potential losses as a result of the credit crisis could exceed US$1 trillion. The assessment includes warnings that further losses and write-downs on prime mortgages, commercial real estate, leveraged loans, and consumer finance were likely. The IMF’s Global Financial Stability report put credit market losses at USD945bn, as of mid-March, with more losses expected for months to come.
The report also stressed the fact that the credit crisis was impacting the full spectrum of the financial market in one way or another, with losses distributed between banks, insurance companies, pension funds, hedge funds, and other investors. We note that credit card finance alonside car finance has been included in assets acceptable to the Fed as collateral, which tells us it is not over by a long shot.

U.S. Trade Deficit February recorded a Trade deficit of $62.3 billion against a January deficit of $59.0. This still looks like a $720 billion deficit to us and with oil prices now at over $120 a barrel and Chinese imports still cheaper than local products and flooding in, the prospects are for a worse annual Trade deficit than ever before. And there is no real sign that this deficit is dropping.

 


Oil Prices With OPEC talking of a potential oil price of $200 a barrel something has to be done to stop more than a decline in the $; a stop must be put to the massive global scramble for resources by a combination of the developed world and the emerging world, because prices will continue to rise until they are so high that some will have to do without. This problem is about the massive rises in demand with far greater ones to come.
 
So are there solutions in the pipeline? It seems that the only solutions available to the authorities are existing market controls and proposed market controls on all types of markets, but not on a globally coordinated front. Unless there is global coordination such control will be completely inadequate.

Control of the Markets
Little has been published on the proposed actions by the Treasury department, the Fed and the G-7. But they are actions that will attempt to place important markets under the control of monetary authorities of the G-7. They do not, however, include the interests of the emerging nations on important fronts.

The plan of Treasury Secretary Paulson to overhaul the financial system included a crucial proposal: it would officially transform the Federal Reserve into a “market stability regulator.” The U.S. Treasury has indicated that the Fed could use proposed new regulatory powers to stop, “credit and asset market excesses from reaching the point where they threaten economic stability.” David Nason, assistant secretary for financial institutions, said the Fed could even use its proposed “macro-prudential” authority to order banks, hedge funds and other entities to curtail strategies that put financial stability at risk.

Treasury wants to merge the Securities and Exchange Commission, the US markets watchdog, with the Commodity Futures Trading Commission that is charged with overseeing the activities of the nation’s futures market. A conceptual model for an “optimal” regulatory framework focused was being put forward to achieve three objectives: market stability, safety and soundness with government backing, and business conduct.

A working group was being established between Britain and the United States to sketch out the best way to tackle financial market turmoil. The British government said that it wants to work closer with the US and our other major international partners in dealing with the global financial turbulence. This is a global issue that requires a global response, it said. While it appears the intentions are noble, they are without a doubt ways and means to control markets as the Fed deems fit, inside the USA and the UK.

“The G-7 group of nations agreed to “calm markets showing irrational moves”. But this message did not have enough emphasis or was it ignored as a threat? To reinforce the statement, Jean-Claude Juncker, Luxembourg’s premier and the chair of Europe’s finance ministers, announced on April 23 “financial markets and other actors [had not] correctly and entirely understood the message of the [recent] G7 meeting.” In other words, markets were put on notice that the world authorities may [will and are?] take action to halt the collapse of the US$ and undercut commodity speculation by hedge funds.”

“French Finance Minister Christine Lagarde likened the recent G-7 stance to the 1985 Plaza Accord when the industrialized nations agreed to “coordinated intervention” to drive down the US$.

“Could this be a joint effort by the States and Europe to try to impose a tight trading range on the €: $ movements in the future? We think it is as the €: $ exchange rate moves of the last few weeks have shown [trading between $1.54 and $1.59 against the €]. Much as Central Banks don’t want to ‘intervene’ in foreign exchange markets, it seems that they will do so. Threats will be ignored until turned into action.

“Now we have food crises; governments in the emerging world are proposing other market controls. The issue of food inflation has led some governments to contemplate provocative strategies to lower food prices. India is reported to be considering a ban on trading in food futures, a move designed to stifle what the Indian government regard the speculative influence of hedge funds and financial market traders in the recent surge in commodities prices. As food shortages build up food protectionism is starting in some nations, curtailing exports of food needed internally. This type of control has to become more widespread as food prices hurt nation after nation going forward. With food as well as resource prices running up dramatically action to restrain them will have to be taken on a national basis, which we do not see being followed through on an international front.


“It seems inevitable that more and more controls will have to be imposed on more and more markets. It is inevitable that global movements of capital will have to be retrained at national levels. The world just cannot afford to have the huge wealth funds and trade surpluses running through constrained exchange rates, spreading inflation through higher prices, until local capital and trade markets demand drastic exchange controls. Attempts at intervening in foreign exchange markets to contain exchange rates will attract the switching of huge surpluses into currencies other than the US$. US-based funds can be controlled for sure, but can Asian and Middle Eastern ones? History well testifies that it takes the full impact of a crisis to give good political cause to trigger draconian measures, such as Capital and Exchange Controls.

The Impact on Gold and Silver Prices
While monetary authorities may not be happy to see a resurgence of global demand for gold and silver, those who are able to, will see these mounting controls as a threat to the true measurement of value, which currencies have provided since the last world war. As the dangers become more apparent, the $: € exchange rate will not serve as a determinant of the gold and silver prices, but the falling macro-confidence, fear of more instability, doubts about the value of global currencies, both ‘hard’ and ‘soft’ and uncertainty on a broad global front, will prompt a broadening of the type of global investors attracted to these metals to reflect these fears over time, to ensure that the gold and silver prices reflect global values and counter those measured against controlled values [managed currencies] in other markets.

Certainly, the ‘bull’ market in gold and silver is far from over. The market is metamorphosizing into a new phase promising far higher prices than we even contemplate now.

What prices will gold and silver have then?

“The actual prices of gold and silver will become simply academic.”

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Gold Marks Two Important Milestones!

By: Martin Zielinski of 8 Stock Portfolio.com

In the past week, gold quietly marked two important milestones.

First, as of Monday the price of gold is now showing a gain for the year. The closing price of gold on December 31, 2007 was $833.75. The price of gold today is $854.60. That makes gold up 2.5% for the year to date. If gold can hang onto this gain into the end of the year, this will also mark the eighth year in a row that gold has had a positive return. For the year and for this decade, gold has humbled its naysayers and rewarded its investors.

Second, on Tuesday the price of gold exceeded the price of platinum. The two metals now trade within a few dollars of each other with gold at $854.60 and platinum at $858. This is a big change from earlier in the year when platinum was trading over $2,200 per ounce, more than double the price of gold. If I’m not mistaken, the price of platinum has been higher than the price of gold for this entire decade. Not since the 1990s has gold been more expensive than platinum. Considering that platinum is thirty times scarcer than gold, this makes a strong statement about the demand for gold.

Disclosure: Author is long physical gold and platinum

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A New Place For Investors To Find Silver

By: David Morgan of Silver Investor.com

received a phone call from Tarek Saab, a former finalist on Donald Trump’s television show, The Apprentice. At first I was a bit suspicious because, believe it or not, there are a few flakes floating around the gold and silver arena, and having someone claim to be associated with The Donald did send up warning flags. I must state, however, that perhaps to an outsider, all gold and silver bugs probably seem nuts!

Tarek’s call was followed by an e-mail and this gentleman sounded as bullish on the precious metals as anyone I have met. In fact he began something that many of my friends and associates have talked about for years. He began a peer-to-peer network where buyers and sellers can find true price discovery and deal in physical silver and gold.

His company, GoldandSilverNow.com, is helping solve a “shortage” problem in the precious metals market by linking buyers and seller directly. In a previous article, I mentioned that one of my colleagues in Belgium has put together a method of tracking eBay (EBAY) prices; see Precious Metals Price Discovery.

The current situation is a huge spread between the paper derivative price on COMEX and the actual price paid for silver and gold by retail investors. This was discussed in my article “Silver Arbitrage.” People can take advantage of a price differential between two or more markets, striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices.

There is without a doubt a price differential between retail silver product, such as 100-troy-ounce silver bars, and the spot price for silver on the Futures Exchange. In fact, this presents a very good arbitrage opportunity for those willing to take the risk. This is accomplished by selling lots of 1000 troy ounces in 100-ounce-bar increments and locking in the 1000-oz. COMEX bars for delivery. This process is achievable and, as with all arbitrage situations, will find some market participants willing to take advantage of this opportunity.

But GoldandSilvernow.com is not an auction house. The company, described by Saab as a “virtual bullion dealer,” has a simple transaction process: A seller registers and sends a picture of his inventory. The buyer, who must purchase a minimum of 500 ounces silver and 10 ounces gold, wires funds directly to the company, which acts as escrow. When the funds clear, the seller ships his bullion via registered mail, according to strict packing instructions.

Now it must be impressed that this seems to be a rather simple idea, and in fact it is, but to my knowledge it is just beginning to be implemented. Saab’s is not the only one, however; we are seeing more and more Web sites pop up that are selling precious metals.

There is another Web site that has begun business recently that is known as seekbullion.com and has some of the expertise from goldseek.com and silverseek.com. The founder of goldseek.com came to one of my first appearances at the Wealth Protection Conference in Phoenix, Arizona, and we have been friends ever since.

According to their Web site, “SeekBullion.com™ is an online precious metals/bullion auction Web site that deals with trusted pre-screened authorized dealers (sellers). SeekBullion.com™ is a division of GoldSeek.com and SilverSeek.com, Gold Seek LLC, founded in 1995. SeekBullion.com™ aims to create a new marketplace for bullion products at competitive rates, whereas other auction Web sites will charge several percent on auctioned products which increases the cost to both parties. SeekBullion.com™ aims to greatly reduce the cost of bullion auctions with the trust and integrity of Gold Seek LLC, the premier global leader in precious metals information and financial truth.”

A third Internet site that deals in silver is FlettExchange.com. According to its Press Release:

Flett Exchange LLC is introducing a new silver market. 100 oz and 1,000 oz silver bars are now listed on Flett Exchange, LLC, to buy and sell. For hundreds of years silver has been recognized as a superior form of monetary currency and is internationally accepted. It has retained its intrinsic value by backing paper currencies and has many versatile industrial uses. Our 100 oz and 1,000 oz silver bar markets will allow participants to convert cash into silver and silver into cash.

100 oz and 1,000 oz silver bars are proficient way for investors to gain access to a growing silver market. These premium bars are easily shipped, conveniently stored, uniformly stacked and are dependable forms of financial liquidity. Our silver bar markets are live, anonymous, two-way market determined by Flett Exchange, LLC, users. Customer price-negotiation eliminates the premium buyers pay and the discount sellers incur, when transacting with major bullion houses and other auction platforms.

These are just three of the recent websites that have seen an opportunity and capitalized upon it. To be clear I have not personally dealt with any of them, so I am not necessarily endorsing any of them but do find it interesting that market participants and proving the free market still exists. In closing, this will be the last weekly article in the public domain as we are working overtime on the January issue which is by far the largest issue of the year. Those interested in viewing our work in full can click here.

Some readers outside of the U.S. have asked us where can I buy without huge premiums and one place that works with industrial size bars can be found by clicking here.

So, in closing out another year, I wish everyone Peace in the New Year

My Note: If you go to these websites please due your due diligence and check them out before investing or buying- A word to the wise!- jschulmansr

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In light of what I just mentioned above, here are some tips-jschulmansr

Ponzi Red Flags!

By: Andy Abraham My Investors Place

It is front page news that Bernie Madoff created one of the largest Ponzi schemes ever….How could sharp investors get sucked in… it is really unbelievable…The question is what can you do to protect yourself…Here are some of my quick thoughts…as well open the floor to all to add their thoughts..

1.Avoid managers who are unknown, or unregulated, or come without good referrals, or haven’t been in the industry long.
2.Look out for an investment manager who wants complete control of your money and does not fully detail what EXACTLY he does… it has to be simple enough that anyone could understand.
3.Check Finra (I added the link-jschulmansr)
4. Understand the EXACT strategy
5. Don’t rely on black box ideas
6. If the returns are too good to be true…( it goes without saying)
7.Have a broker dealer have custody and get copies of your statements directly from the broker.
8.Ask for recent audits…and make sure the accounting firm is a reliable entity…

Some of these basic ideas would have kept you from investing with Madoff… but with consistent 10% returns for years… it almost becomes a self fullfilling prophecy…and as other investors plow money into the idea… the safer you might feel… but look at this list…and I would like to hear your opinions as well…

Andy

 

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Have a Great Weekend! –jschulmansr

 

Noticed something? Take a look at the inflation number in the subhead. The indicator’s gone into double digits as the result of the Fed’s recent move to cheapen the dollar. Gold, not surprisingly, responded with a gap-higher opening Wednesday and a fill-in trading session Thursday.

February COMEX gold has set itself up for a test of the $880 level, a price visited but not held on Tuesday. A close above $880 would be convincing evidence of bullish resolve to work toward the October reaction highs above $900. On the other hand, a close below $803 would indicate that a short-term top is in.

 

COMEX Gold (Feb. ’08)

 

 

It’s that “other hand” stuff that’s so worrisome to gold aficionados.

There’s been a lot more enthusiasm for gold stocks recently. Over the past trading week, mining issues proxied by the Market Vectors Gold Miners ETF (NYSE Arca: GDX) have gained 6.5%, while bullion has risen just 4%. The performance edge, in fact, has been held by gold equities for more than a month as bullion formed a base and started working higher. That can be visualized by comparing the relative performance of the SPDR Gold Shares Trust (NYSE Arca: GLD) to the Market Vectors portfolio. The bullion trust’s price multiple has fallen from 4.1 to 2.8 since late November.

 

Bullion (GLD)/Gold Equities (GDX) Ratio

 

 

Of the Market Vectors ETF’s three dozen components, Royal Gold Inc. (Nasdaq: RGLD) has been the strongest. And for good reason. Denver-based Royal Gold acquires and manages royalty interests in a variety of production, development and exploration stage projects worldwide. Strong fundamentals such as industry-beating cash flow-to-sales and current ratios, together with a steady dividend stream, have attracted interest in the stock. So much so that Royal Gold shares have appreciated nearly 38% for the year, with 20% less volatility than the Market Vectors portfolio.

 

Royal Gold Inc. (RGLD)

 

 

So, the big question remains:. If Royal Gold has been noticed by investors, is its stock now fully valued?

If you’re a “glass half empty” investor, you’d have reason to be concerned. After all, a 38% return in a market like 2008’s is a gift. The “glass half full” folks, though, are looking at a short-term price objective of $51, another 18% in upside potential.

You can either raise your half-empty glass to bid farewell to 2008 or toast the new year with your half-full glass.

Enjoy your holidays.