2010.12.31 Today is the New Year Eve. With 20/20 hindsight, we can conclude the last decade belongs to commodities. The following two charts shows the major leader (so to speak) of the pack. It shows gold has moved in an parabolic manner that closes above U$1400+ for the year. The chart shows a growth more than 5 fold since year 2000. This is impressive. However, if you use the nominal high of U$540 (rather than the interday high of $850) in January of 1980, we see the compound growth of 3.2%. Let do not get emotional about gold bug or not. Gold prices was on a steady rise from 1978 to 1980. Number crunching can give you excitement. If we use the U$175 since 1978, the annual compound growth is 6.7%. This is amicable return. But we also observed that 6.7% may be also the number we are familiar with: great mortgage rate during the 1950, the average inflation rate during normal year and so on. By alleging gold is the best performer of the year, it is fact but we may also taking fact our of context. This also illustrates the importance of asset allocation at different period. Now lets turn to oil. Oil was about U$5 before the oil shock during 1970 (which is about 7 year before the gold historic high in 1980). Today we have oil at U$90. It is 7.5% annual compound growth rate. Is oil price at $90 reasonable. It is because the $5 oil did not start from 1970. You can trace it back to 1920. Then the growth rate is 3.2%. Is this realistic? No it is too low. While rapid rise of oil price will harm the economy but the rise is necessary to reflect the true value of the good. The cost to produce oil in 1920 is far much lower than the deep sea oil or tar sand oil today. So oil still cheap. The question is can the economy work with the $100 oil. The answer will be yes. The demand is there and it is inelastic. In the West, the social structure build on it either the transportation or home comfort. The East is demandingly increases their Quality of Life that demand more energy consumption. So the Arabian will sell either to the West or to the East. There will be higher oil. If we ignore the spike in the chart below, oil is actually rising on a steady trend. Steady trend is the trend the difficult to change. In the coming year, commodities will be growing fast. West has been spoiled with abundant material. When the price is adjust to fairer value, they cry foul because the East what to share it. Gun does not work now. Suck it in.

2010.12.31 Not a bad year for precious metals. The silver and platinum charts are included. They all perform better than the average 6-10% range of investment. If this is inflation, then this is a bubble. If the rally is catching up the hidden inflation it is not doing a full hearted job. No matter what the demand is now not on industrial purpose but also the investment purpose. As long as asset fear exists in other asset class, precious metals will perform well. We see the new high near the year end then back off a bit before recover to just below or above the year new high. The action is set. In next year, there could be some pull back at the beginning of the year, but the upward direction could continue fueled by the inflation emerging from the past, the present and the future. The rise of the precious metals in U$ could be high but in C$ may not be. However, the suppressed inflation will make the investment beat the inflation because the hidden inflation will be reflected in the price of precious metal. With the precious metals continue to rise, all short will cover sometime. If the short is political based, the short covering may be painfully slow. If the short covering is pure greed, then the other greed force will kick in to squeeze the short. The war of tug is on.

2010.12.27 Gold and silver rose $22.80 (1.6%) and $1.06 (3.6%) when USD rose 10 bps closed at 80.37 (all end of the day numbers). Gold did not recover when USD was under 80 but broke up when USD stays above 80. This is counter intuitive if we attempt to explain this using U$ depreciate. This time gold and U$ rose at the same time when USD holds above the critical level of 80. We know gold and silver have huge short position by the commercials. These commercials are not the the fund managers. They do not dress the window. The short position is to manipulate the market. Checking the volumes. Both precious metals are training about 1% of the 200 days average. This is just the act of small investors who balance the book before the year end. The true movement comes from the first week of January.

2010.12.25 Life is getting quiet and calm before the 3 days holidays. No body is trying to hold on too much or too little. The activities are diminished as every year. The U$ year end settlement effect will start to wearing out. The above chart showing three out of four years, U$ rally at the year end and starts the decline at the tail end of the December. This year could be the same until the March which is the fiscal year end of many companies. By far, gold is not really doing much of heavy lifting this year. Although we see 30+% gain for gold but this is actually only have a yearly compound gain of 1.7% since gold hit the U$850 in 1980. Any fixed income will able to beat it during this 30 years. Tony Boeckh is right on the point that asset allocation is vital to survive but not necessary only during now. It should be anytime. Although U$ is continue to be debased by its monetary policy, gold may facing its challenge to climb the mountain if you correlate gold to U$. The detachment, as far as I see, is complete which does not mean no interaction. The interaction remains from the impact of asset allocation. If we go back to the 1.7% performance of gold we may misconclude that there is far more room to grow. However, if we do not using the interday high, the compound yearly gain becomes 3.2%. This nominal rate is quite close to the normal inflation rate. By this method, the climb to the coming years may be slow. On the other than, gold is denominated by U$, it may get some help from there.

2010.12.18 When the precious metals behave normal, people panic and see the bull run of precious metals has finished. The observation is based on short period of time and short sighted. But the crowd love it. Trend can have short and long term. Shoehorning situation to create the wow factors to please the crowd is one thing. When attempt to explain short term behavior succeed does not mean they have any luck to foretell the future trend. Majority of people could appreciate what they are seeing but much more willing to accept the fact in the past and formulate an investment strategy to deal with the past. This may not the future trend. The gold and U$ has detached over a year. Yet we still try to explain the co-relationship. which is not necessary a success way to formulate investment strategy.

2010.12.11 If there The sudden advancement of gold and silver at the end of November and first week of December is a mystery. With the demand of the U$ rising for year end settlement, the price of gold and silver should be either be tame or weak. Yet, we witness the all time high of gold and 30 year high of silver which is counter intuitive. It could be explained as the crisis of the Euro zone. When price is pulled up by panic, there is the pull back. The gold price has been moving steadily between the blue upward price channel in the chart above which shows there is not change of major direction. USD has overshot, it may pullback a bit but not until end of January to below 80.

2010.12.06 If there is a stock that it pays 1% dividend every month, it will attract a lot of attention if the payout can be sustained. If a stock can gain 85% in one specific day, this is hot stock. If the daily change is not so spectacular but over a not so long period of time, this is spectacular. Since the beginning of September it broke above U$20 and rally to just under U$30 now for about 60 days or 3 months. This is equal to an average of daily gain of 0.67%. 0.67% is not a small change but it is not a huge. On day, some stock could pop up 0.67% but not continuously over 60 days. This stock is the metal silver. This is kind of slow change (up or down) usually does not catch the eye of investor unless someone continuously and systematically monitor the market across the board. Some may monitor silver but the daily change is so minute that it does not trigger any attention. The market is deceptive. This type of slow change kills many investor when their stock whither. As an investor, proactive to monitor the portfolio from short, mid and long term perspective is a basic survival measure. Returning to silver, the rally is stealthy. It begs for the question what happen and what drives the price up. The slow motion indicates it is not short covering for small volume. Could it be systematic accumulation or short covering of a huge short? In both case, it may not be negative.

2010.12.04 Without question, everyone was waiting to see the tug of war between the U$ and precious metals. There is no tug of war. U$ is driven by the demand of trade settlement rather than reserve as many countries trading without U$. Gold prices has detached from U$ over a hear. It momentum varies but more or less the trend is maintained. Silver's upward trend has slowed down a bit. Gold gains 3.7% (week), 5.0% (month) and 17% (year). Although the 3.7 and 5.0% is exciting but yearly return is 17%. Silver has a much better performance of 10% (week), 19% (month) and a whopping 56% by year. Last week, silver gain 42% by year. This has been a very good week for silver. Anyhow, the momentum of silver seems slowing down (but still at tremendous speed). The relative rate of change for silver has dropped to 2 time of gold rather than 3/4 times last month. The near term U$30 target for silver should be reached very soon. This is a rally of 50% since September this year. If there is any breath, the next target will be U$50.

It should be noted that GLD supposes to be 1/10 of an oz. Gold price is above U$1,400 but GLD is below U$140. The demand of GLD has changed. Perhaps too many gold ETF. If this is true, than the speculation of gold is getting frenzy.

2010.11.26 Precious metals have a weak turkey week as the year end closing in fast. It is not necessary the weakness of the Euro that make U$ healthier. It is seasonal adjustment. Silver is in heavy casualty. So it seems but we have to remember silver rises 3-4 time faster than gold. It will fall as fast. USD may continue the seasonal momentum until New Year when the international trade settlement finishes and the demand of U$ for payment is subsided.

2010.11.20 This is not an unusual week. Precious metals are heavily involved in the market when the Europe financial health is in big question. There is no leader during this period. Jerky movement is all over the place. USD moves back at the end of the year settlement coming, the hording pushes it up. The margin call forces selling pushes whatever that has made a profit in the last few months. It is no surprise to  see gold and silver pull back. However, silver's recover is spectecular.

 2010.11.18 Gold to silver ratio has dropped below 50. The rate of change for both precious metals are fast pace. In two months ago, it moves 1 time of gold vs. 2 time of silver. In last 2 weeks, the rate of change ratio changes to 1 to 3. Tonight we see the rate of change is at almost 1 to 4. The discrepancy make the gold to silver ratio getting interesting. Silver has the precious metal demands. But due to its industrial usage (non-recoverable) it is not seriously treated by entertainyst. Now the price is high, it is recognized. Gold has high medical (targeted medication delivery) and electronic (gold plating and connection). These are non recoverable applications unlike jewelry. Silver is far more application and also non-recoverable. With the decline of film cartridge, entertainyst declare the over supply of silver because silver is not used for negative. They never know it has been stopped or at least reduced significantly for decades. The photosensitive ingredients are most dyes. Now silver has its wider application on antiseptics such as suspended silver solution. Silver's ramped up usage in printed circuit board to replace lead/zinc soldering (to reduce toxicity) has been over a decade now. You can imaging now we could not getaway from electronic, we should know how high the silver demand is. Below is a good milestone for silver's value. There may be some up and down about the 50 ratio but soon we should see the ratio beheld below 50.

2010.11.12 It may be a very triumphant week for precious metal but the inflation in China, as Don Coxe put it, "took a lot of air out of it" from the commodities because speculator think interest hike in China is inevitable that will lower the demand. The demand may be reduced but it is from 12% GDP growth to 9% which remains as high as any time. So the interest hike will prolong the strength of the Chinese economy growth. So the precious metals in term of U$ will continue to rise. As the year end is closing, the demand for U$ rallies. We see the selling after 1:00 pm as a margin call patent. This means those short U$ will have to sell the high flyer to raise money. USD could very possible continue to move near 80 as long as the short squeeze continue to be competing with the international settlement.

2010.11.10 I see gold as a reference currency rather than the ultimate money or the real money. Gold does not have the some specific requirements of money which are portability and easy divisibility. Paper money is created to overcome the short coming of gold money. As money, it should easily transfer from one location to another to facilitate trading. If we split hair, we are using 3 types of money: government issued notes, electronic currency which we do daily payment on internet, and credit currency such as the credit card. All satisfy the portability and divisibility requirements.  However, gold can be used as a reference currency just like cesium is used by the scientist as the reference for length. A reference currency is a third currency between two currencies that can determine the relative values of the two currencies. Should the issuer of the currency owns the reference currency is another matter of policy. Why ownership is not compulsory? The rationale lies on the fact that owning means backing. Backing means the value of the currency can be stable because there is a process to increase the reference currency ownership (reserve) in order to increase the money supply. The money supply is a policy issue. Ownership of the reference currency creates the barrier to create money but does not prevent if it can be unpegged or devaluate the currency by the government. While everyone says going back to gold standard could push up the gold price or silver price, in fact, depends on how gold or silver is being used as reference currencies, they may not. Investors may have to be very agile on this.

2010.11.09 It is Déjà vu again. In the morning, silver and other precious metals were at heaven. Gold hit U$1,420. Silver hit U$29. In the afternoon, gold fell below U$1,400 to U$1,388 and silver U$26.88 on COMEX at 4:00 pm. Around 6:00 pm, things are rosy again. Silver is pushing the high of U$29 and gold recover above U$1,400 to U$1,410. The most unbelievable is that USD rose to 77.74 up 74 bps. So the correction since 1:30 pm to 4:00 pm is just temporary. The lid can be held only for a few hours. With copper broke up U$4 again along with NG above U$4, we should be very careful not to ignore this commodities rally and say it has peaked.

2010.11.05 This is a very exciting week for gold and silver bug. Silver continues its 2-3 time more changes in %. With this silver price can hit U$40 very soon with the gold to silver ratio down to 40, i.e. gold is U$1,600. While USD may continue to struggle but we see the internal of U$ is weakening. This is shown by the decline of gold price spread between U$ and C$ gold price.

2010.10.29 Gold's correction could be completed. My indicator indicates gold is not saying bottom yet but the RSI is turning higher. Gold correction could be very close. Silver is another story. Although it was hammered on Oct 26, the return is just spectacular. Silver closes at U$28.70 which is close to new high. Next week could see new gold and silver making new high.

2010.10.26 The USD does not assert any pressure on the precious metals tonight. With USD up 51 bps the gold and silver are up. Silver recovery is strong at the order of 2.5%. If this persistent, the USD and precious metals are detached. Update in Oct 27 morning: USD kept the gain but gold and silver were sacrified.

2010.10.23 During this precious metal correction, gold down 5 percent, silver 8 percent. There are a few observations we can make. The rate of change for silver is about double of gold. If this is the trend, the prediction of 10 percent increase in gold will translate to 20 percent to silver. The current target of $1,500 will mean 30 percent rally for silver or silver could be at $31. We have to monitor this trend closely. Second observation is that although silver rally more quietly than gold, it is not immune from correction. When it is corrected, it is hit double hard. Third observation is that silver used to correct out of sync with gold. We may see the beginning of the strong correction correlations. This means the interest to invest in silver is increasing comparable to gold. The interest from fund and retail has to be identified so that we can properly model the move. This is an interlude for the whole rally. Perhaps is not the struggle of fiat money. It can be the rotation of asset allocation. From the technical perspective, we see strong volume to the bottom with a low volume. This could be the drying up of the sell order. In other word, the bottom is close when the demand exceed supply.

2010.10.15 Nothing defies gravity. You can defy it short term. Gold is running too fast and it pulls back. It does not mean the pull back has to be huge. It has to move back to the trading channel which runs steeply upward. This is not necessary manipulated. Professional has to take some profit to pay themselves and the shareholder, sometimes. One should pay very close attention to the USD. It is rolling over which means the fall will not be broken out quick.

2010.10.11 How strong is the silver rally? When people talk about a strong gold rally, they say it is tremendous. During the fall of commodities in the fall of 2007. It was dumped much less serious than the gold and hits the ratio of 50. Gold took off since then and people forget silver. Now, it is coming back. Within one month, the ratio dropped from 68 to 58.

2010.10.08 Without any question, the challenge to take down gold was carried out and failed. Silver slipped in and continue to set new high. This is the season of precious metal. But profit taking will happen at some high point. It should be pointed out that gold to silver ratio is now below 60 over two weeks. This trend is taking toe. With the strong rally of silver, it could reach U$40. If the ratio hit 40 then gold will be U$1,600. All silver stocks are doing very well which indicates the silver rally has legs. What about the purchasing power? With U$ falling, does it means no real profit made? Silver rally by another 100% could just means USD lower by another 10% to 70. The leverage is huge. So there is absolute profit. What happens is that, the suppression of silver in the last half century is getting the payback. This means investment has to rotate asset classes. It is always true that buy and hold may not be the only winning strategy. It depends on the timeframe.

2010.10.03 USD has broken down below 80. This is ugly for USD. Can it rebound? It has a huge top and a huge H&S. Technically, the chance will be high. Geopolitically, the chance will be low. So what will be next resistance point. It will be very possibly the 70. If so, what will be the commodities' price? The lowering of the currency value does not have to be reflected by the commodities price if the inflation could not be show. But the American kill the Chinese inflation generator by killing all the small manufacturers with low profit margin. The inflation will flare especially when RMB appreciate. The RMB does not drive the price directly up. It is the ASEAN currency peg that causing it because the low price merchandize manufacturing has been again shifted back to India, Malaysia, Vietnam, Thailand, Philippine and Indonesia (the ASEAN countries). The price of gold was below U$1,000 last time USD dipped below 72. To make this happens, the Euro, GBP, Yen and A$ must bet strong and willing to lost in this competitive devaluation war. Will that happen? The chance is 50/50. The European countries may bow to the American influence. This is becoming a typical complexity theory system.

2010.10.01 The "sudden" weakness of USD accelerates very quickly to form a triple bottom break down which is a very bad weak signal. Although the gold and the USD is now weakly linked, we still have to examine the situation carefully. The weak USD will cause a lot of margin call. The holders do not sell gold, in fact anything but natural gas, shows the strength of the commodities. The typical response is selling those have new highs. Gold, copper and oil continue to move up indicate high is believed to be in the near future. Selling them will cause more lost. As the result, natural gas and gold stocks becomes the victim. To certain extend, the financial also suffers because of uncertainty in the future growth. In another word, the weakness of financial will be permeated when the second wave of mortgage renewal comes next April. So the fund managers sell the financial but keep the keeper; i.e. the commodities. The blue zone of gold price in U$ has been established since the beginning of this year. Now the gold price is getting closer. Should the plunge protection team have the ability to do anything, it should happen now. Otherwise, we shall see a string of historic new gold high. These new high is not necessary equate to inflation or escape to safe heaven. The moving in is just to seek stability of the underlying asset which could not be created through thin air (Don Coxe). With the premium of gold and silver at 10-30% on physical coins or bullion, this is already a bubble. The bubble is small. When the rush is in, we can see the really gold parabolic. By association, silver will shot up much faster. The near term new target of silver is now set to U$41 which may bring down the gold to silver ratio to around 40 from the current 60 or gold will be at the U$1,600 range.

2010.09.28 Gold has peaked and going for a correction. Of course, nobody can predict how much downward correction it will be. Rather than a negative event, it is extreme positive. Despite the chart looks parabolic, we see gold continues to make correction with 10-20% advance and pullback rather than a continuous run. This is a strong indicator of non-bubble. The following is a spot gold chart that shows the zigzag journey. Updated at end of day: Gold broken the U$1,300 and stayed put at close. Now the U$1,300 will be the psychological support but the actual one is at U$1,288.

2010.09.24 Gold and USD is loosely tied only. This week is just a watershed. USD broke below 80 with help from Benny. U$ and C$ gold price made historic high. Silver is 30 years high. Base metals move up. But the lid may come next week. If not, it will be a strong rally.

2010.09.22 USD broke below 80 after not much of struggle for the last few days. This will create a major ripple on the selling of some commodities to cover short. However, the commodities also rally quite a bit that creates short covering situation too. Gold and silver are at  new high again with oil moving towards $80. Everything is moving in all direction.

2010.09.17 Gold hits U$1,280 and silver hits $21 before retreat for the weekend. Both made high. Gold is all time high. Silver is since 2007.  USD is continuing its swan song.

2010.09.16 We may have a confirmed break up for gold.

2010.09.11 Gold has made historic all time high in U$ and C$. People are very excited about this and interpret this as the highway to heaven. If we examine the detail a little bit further using a more analysis we may be excited but not as excited as everyone. On this site's analysis is not based on a single point but a range. This methodology is stemmed from the statistical and probability analysis. While it may be very unlikely (low probability) sometime could happen beyond the boundary (statistical abnormally). If we treat the abnormally as the trend, we are using a singleton to extrapolating the world. This is not what I am doing here. The abnormally will create curiosity but not necessary the conclusion. The conclusion will come when the singleton become multiton. So when the gold price has a new high with a few dollar above the previous high but not sustained, this is a singleton. We cold not call it a break through or break up. What would contribute a true break up? This will depend on the momentum, trend, range and fundamental around this singleton. This is why the annotation for GOLDC-I says the fight is not over because there is pullback. This is not just a pullback but also have a sell signal from the analysis which indicate we are not going to see a return to upside immediately. With this in mind, the new high is just an academic event. No wealth can be made.

2010.09.11 C$ gold made the historic high last week and U$ gold follows this week. Will the rally be a free ride. It is not in the final phase of the bull so this will be a zig-zag line for sometime. Since we are approaching the year end which is the bull period of gold, there is high momentum to go up. However, the economy could play a major factor to curb the consumer buying even India is booming. As the result, gold could continue to make high but in a very volatile way. Silver has demonstrated such behavior. Nonetheless, someone is accumulating silver in stealth mode. Selling is not much but it is hard to detect without observing the OBV or SLV-N. We should be careful about USD. Its co-relationship with gold is diminishing. Yet, like all financial instruments, they are all inter-linked.

2010.09.03 Gold took a pause but silver marched on. Silver is closer to U$20. Gold has been very hesitate before the U$1,256.50 which is the all time high recorded in June 18, 2010. Silver is making its U$19.93 decade high. The closing price of silver is just a nickel less than the peak. The fund manager must be very tire this week. After fighting the sudden rally of U$ and now gold and silver. U$ is up relative to the bad European currencies including Euro and Sterling. By trading the currency, the smart guy who hold gold in European currency may not be that smart at the end when the European currency falls. The repatriation of the investment will shrink. Price, volume are all inter related. When the selling (rather than true supply and demand) could not ram down the price, the only alternative is higher price.

2010.08.27 On the surface, it seems the road block for the gold rally is all clear because the yellow metal does not fall much during the U$ rally. The fact could be that the metal is so much shorted that there is not much to short anymore. Remember the price of gold is already suppressed significantly. The rally of the U$ is just a short coverage but on the other side of the bet, someone got caught and have to cover their short. Or as the conspiracy theory goes, the Fed uses this opportunity to hit on commodities. With all these in mind, the market is not crazy about the commodity yet. There is some profit taking shown by the GLD. Silver is just caught between the cross fire. After some down time, it springs to a recent high of U$19.11 (Decade high is $20.92 on 2008.03.17). 2010 high is U$19.52 on 2010.05.12. The inflation is coming. The deflation is coming. The equity will be demanded to store the wealth to get protection from inflation and deflation. As many pointed out inflation or deflation will float gold price. This trend is the main trend. It will not change. What could force the gold price down and still has considerable probability is volatility of the market that short covering will sell what makes a buck already which is gold and silver. Until gold has the chance to clear U$1,300 there is a lot of bobbing up and down around the U$1,230 +/- U$50. The uncertainty seems to present a good heaven for day trader. But this the bear and bull trap. Goal should be aiming at the long term.

2010.08.20 Mechanical rebound or rally for precious metals? This is the key question. After weeks of falling, gold and silver rebound. Is this just a technical rebound or a really resume of rally trend. If this is the former, we have to sell the asset class. If it is later, we should accumulate. The recovery of precious metal price is under the strong influence of a sudden unexpected U$ rally. All other commodities are down ranging from bad to severely like oil (down 10%). The fall of other commodities should thank the help of ETF and derivatives. Because of the strong gold and silver trend, no one like to short the metal and the shares now; too risky.

2010.08.16 The EOD gold price has broken above 50MA which is above 200MA. The P&F chart shows the completion of bottom H&S and challenges the resistance at U$1,227. If break through, gold will have a stampede run.

2010.08.13 Gold is not affected by the strong U$. All precious metal responded the same way. This is true detachment.

2010.08.10 While gold got hammered the OBV of UGSI has encouraging development. It has a lift off above the 200MA. Although the CGSI is just as lucky. So we have the case that the price and OBV are both rise above the 200MA. Therefore, we may see the gold stocks moving higher.

2010.08.06 Gold may be over U$1,200 but the fight is U$1,227. Strong resistance may be ahead. This similar to silver which is continue to fight the U$18 resistance. The longer it is the longer the base; the longer the base the high it goes (Ron Meisel).

2010.08.04 A new twist for the gold and U$. While USD rose 0.5% gold rose 0.8%. Gold does not back down. The reason USD rises has to be related to the Euro and GBP. Both are the heavy weighted currency in the USD basket. As the result, even U$ is not strong, USD is being involuntarily jacked up relatively. U$ is not up. This could be the reason why gold gain 0.8%. As time go by, using USD to gauge the direction of gold will not valid during this match of competitive devaluation. Commodities such as base metal are not rising as quoted. However, if we look at Dr. Copper, it is on track to the old high U$3.60. In fact all base metals have the price cross over the 50MA and 200MA with 50MA up stiffly when 200MA start to level or turn. Judging from the daily change may be delusional.

2010.07.30 Is the nail biting over? May be. It is not final until the fat lady sings. Now the fat lady is the 200MA. Miraculously the gold price bounds up above the 200MA. If it holds next week, the correction is over.

2010.07.28 Gold is not the only commodity took a fall of 1.8%. Oil also. Gold contract will be expired on July 29 which is tomorrow. If you could not deliver, you have to sell the July contract to escape the delivery. Last month, on June 28 the drop was U$15. Following that only July 1, there was another U$45 drop which may not related to delivery. It could be a conspiracy theory to avoid delivery but the volume in July is one of those high volume month. The continuation of contango could rough a few feather. May be we shall see more of these month end fall.

2010.07.27 Gold correction may have a bit more to go. So far the trend is intact.

2010.07.25 Growth stocks usually does not pay dividend. People invests in it for its growth. Gold does not pay dividend. In the long run, it appreciate. Gold stock are some what in between. You will expect it performs in the middle but not gold stock. Taking a timeframe from 1999 before gold price slumps, it was sitting at U$290 on January 1999. It makes 300% gain up to now. HUI has a 600% gain, TSE is 77% and Dow Jones is a meager 12% gain.

2010.07.23 Gold is now building a base. Silver is recovering. Wait and wait.

2010.07.16 It may seems unreasonable, gold falls along with the USD. Believable or not, it comes a surprise to many and ammunition for the bear entertainysts. According to their mood, gold can be in reverse direction to flight to safe heaven or leaving the safe heaven. As long as gold is tradable, it can be the victim of margin clerk. Short term direction randomness is part of normal process. We could only work on a trend further down the road. Gold's long term trend is strong. The 200MA is steady. With the recent action, it is building a base. The longer the base, the higher the next peak (Ron Meisel). Prof Meisel also says be greed when there is fear and fear when there is greed. So the fear of USD could be the reason for the short term rally. Fundamentally when Euro, British Pound and Japanese Yen are lower, the USD goes up. The higher USD will trigger a pressure on gold which is not because of demand but margin covering. By supply and demand, we can see the gold does not fall sharply could be the indicator of a strong demand.

2010.07.09 Direction of gold remains obscure. But the direction of silver is more firm. It is poised to go up but there are selling pressure. Gold and silver may be in a metastable equilibrium. Will it be in favour of up or down side? It is mainly depending on the market. If the market is stable, there will be potential to continue the precious metal rally. Otherwise, it will be in sympathy with the market with the help from the margin desk clerk.

2010.07.08 After the new high U$1,266 on June 21, gold has gone done quit a bit to the current U$1,190 level. There is a different about U$80 dollars. This is a big drop in absolute dollar value. Is gold enter a severe correction? The following table shows the inflexion points of gold prices. What we see here is the gain is greater than the lost. One should pay attention the gain or lost is getting narrow. This is what we should watch out. This is either a base formation or a top out.