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Never underestimate the ability of Keynesian manipulation schemes to paint the charts for purposes of MOPE. Does appear on the surface to be a bit of a short squeeze though. Just DCA, buying a little each month and you will avoid damage from any head fakes. Some interesting correlations in Au vs. yen and Au vs. crude have broken lately. That is encouraging.

Downward channel definitely looks to have changed, with outside reversal days the last 3 Fridays. That candle last Friday or week before was HUGE. I will be much more confident the trend is reversing with a weekly close above $1240-$1250. In any event, it is encouraging to see an intraday over $1230. I suspect we could see $1220 or under by end of the day or week. I would much prefer to see a gradual rise even though $100 dollar daily upswings in the gold market are entirely possible.

With the GSR now sitting at 71.81 I still consider Ag to be the better buy. It actually hit 81 two Sundays ago. I spent all dry powder at that time at spot + $2.25 for 1.25 oz. Canadian Silver Buffalos. Actual cost after shipping, $17.32. Nice!

If you are concerned about supply at these or lower levels or don't own any physical. You may want to be more assertive. As always, DYODD.

The $17 dollar level in AG is equally important. Patience. Year end levels will be key to future price direction.

Until then, Happy Tuesday!

Do you trade currencies? Do you see any opportunities there? I have a friend that does trade them. He thinks the currency markets are rife w/ algo rigging.

SA now ranks sixth in production as last reported in 2013. Behind China, Australia, US, Russia and Peru. They also had big mining strikes recently as I recall. The gold market is so small compared to other markets, it is hard for it to move the needle. Especially since CBers and MSM disdain gold ownership by the masses as counter to fiat schemes.

Gold in the ground doesn't normally equal gold in reserves. In this new normal it wouldn't surprise me that such shenanigans will be used though.

Reserves by nation reported by the World Gold Council are suspect, IMO. One example I use to justify that statement is just comparing WGC reserves reported for China compared to those researched and reported by Koos Jansen. Secondly, US reserves reported by WGC for the US are highly suspect by nearly everyone in the metals investment community. Thirdly, governments and their central bankers don't want to encourage gold buyers by disclosing they are also buyers. There are exceptions but not many. Forthly, the MS financial sector only profits from paper investment of PM's.

Although small in comparison, reminds me of the tale of John Perret (AKA "Potato Creek" Johnny). He found the largest nuggie in the Black Hills of South Dakota, in an offshoot of Spearfish Creek called Potato Creek. Many accused him of melting several gold nuggets together although never proven.

At just 7.75 ounces, he sold it for $250. At today's price of $9532 plus premiums, I'd say gold is a pretty decent store of value. Not bad for a barbarous relic with no investment value.

Spent a couple hours at the old train depot (converted to museum style things)...elderly Lady at desk and I struck up a lengthy conversation on gold and mining history. I casually mentioned I'd once worked in the 2800 foot level at San Manuel copper mine (Magma)... I got humbled when she proceeded to tell me about her husband's 42 years at the 8500 foot level (at the mine over in Lead I think)..I'd thought only African diamond mines were that depth.

Anyway Deadwood was an interesting place for me.. Old Johnny was clearly a colorful character..

Yes, back in the thirties, when SA was still part of the Empire, GB went off the gold standard. Predictably, without specie backing, the Pound weakened. This caused an export problem for South Africa because their specie-pegged currency remained strong. As a result, SA was cowed into establishing a fiat currency weak enough to gin up interest in their exports to the Empire.

These days, SA's gold goes right from the Witwatersrand to India and China.

And as long as the ANC (sort of the like the democrats on steroids) is in charge, politically, that's not going to change any time soon. Even with the Rand being mauled.

Several of my relatives including Dad, Brother, Uncles and some very good friends worked there over the years when the #1 and #2 shafts were still used in ore production. The mine is now owned by the U of Penn from my understanding, for some kind of research.

The Homestake mine has a very interesting history related to the Hearst family. George Hearst bought the mine in 1877 I think. George was the father of William Randdolf Hearst of newspaper/publishing fame. He was the grandfather of Patty Hearst.

George R Hearst was the subject of Orson Welles "Citizen Kane".

Patty was of course kidnapped and joined by the Symbionese Liberation Army back in 74. After getting caught for a bank robbery and using the Stockholm Syndrome as a defense, she was sentenced to prison and Carter pardoned her.

Anyway, I turkey hunted the Hills around Deadwood and Lead for many years. It was an annual trip to see my folks each spring. You can see the old shafts from their kitchen and living room windows.

Deadwood has a rich history of colorful characters.

I need to get back up there soon. The folks aren't getting any younger and it's still the center of the universe to me, the old stomping grounds so to speak.

US went off the gold standard in 1971. More sophisticated banking instruments have enabled it to retain it's reserve currency status up to now. As US gold reserves move from west to east we see weakening in dollar reserve currency status.

Of course there is much more to the story to those willing to exert their brain and dig a little.

Does history rhyme? I think so. I don't think the average American understand the implications. If they do, they choose to ignore it in favor of Federal Reserve fairy dust and unicorns.

Thanks for your comments.

An older chapter of history being replaced by a new one in Lead. I remember when the mine shut down and displaced many miners. Lead was falling apart and looked bad.

My Dad bid on materials from some of the old homes in Lead and used them to remodel their own home. Turn of the century wood to build kitchen cabinets and such. Some he resold for good profit. He had some pretty neat stuff from the salvage efforts.

Youngest sister bought one of the old Victorians and my brothers remodeled it. The town looks much better now with many of the old Vics having been remodeled and restored. The steeper streets in San Fran have nothing on some of the streets in Lead. Winter driving fun/nightmare depending on your driving skills.

If you ever want to experience the feel of turn of the century elegance, get a room in the Martin Mason Hotel in Deadwood. There are others but the Martin Mason is our favorite. I think rooms start @ $240 a night.

Did a cool jeep tour out at Custer Park and saw the buffalo, antelope and prairie dogs... Had a few beers in an empty bar in the badlands and visited with an Indian hunting guide.. can't remember name of town.. think he said they had a population of 69..

Great time and surprised I'd never been there. Think it was 670 miles from my yard is all..

Be fun to talk sometime Narly...

I much prefer visits to the BH's or BL's during the off seasons also. Feels more like home w/o so many tourists.

I did like Deadwood/Sturgis during the rally in my younger days, now not so much. Friends make good money renting their house or rooms then. Helps them out so it's all good. Local businesses make most of their annual income then.

Still some great turkey hunting for mountain birds.

Yep, would be fun to talk. Post or PM anytime, Dan.

If you do have property with good gold potential, I would be happy to put you in touch a couple of good prospectors who could give you an idea of what you have, and how to get the gold out of it. The old-timers missed a LOT of gold, so you could very well have a goodly amount of the AU left on the property.

That big old "potato" nugget was found with a metal detector, and a decent detector made for finding gold will cost anywhere from $700 to $5000. Not a bad investment if ya have time to use it, and once you get past the learning curve there's no reason you couldn't find enough to pay for the detector in the first year.

Mike

The CME Group informed the CFTC, beginning Dec. 22, it will implement Rule 589. Rule 589 will put price fluctuation limits on PM trading on the Crimex.

Have seen this back in the 80's when grain prices were rapidly falling but never in PM's. It would only take 3 or 4 of these downward price spikes in silver to reach zero. Several more in Gold, Platinum or Palladium.

Considering Au and Ag are at 5 year lows. Downward price pressure of this magnitude doesn't seem likely. Do they expect explosive upward spikes in price? I dunno. The level one alerts of $3 Ag and $100 Au would be 18% and 8% spikes respectively.

Things are getting interesting.

Just how much derivatives exposure some mutual funds have should be an inquiry everyone should be making about their mutual fund assets. If it were me, I would be particularly concerned w/ bond mutual funds.

Pretty close. Weekly close $1222.50. These criminals at the Crimex and Bullion Banks are all so predictable.

Very encouraging to see Ag hold onto $17 for the week.

One day soon they will lose control.

This is part of what I was talking about in another thread about a deflationary bias in the global economy. Falling currency and commodity prices. These are historical events (currency wars) for those paying attention.

I would not be surprised to see the Fed turn the QE spicket back on at some time in the near future.

This promises to be a fast moving and volatile day in the markets.

Awaiting Fed speak today. They won't raise rates as it would be too damaging to the deficit and debt, which in my opinion along w/ unreported debt, to be mathematically impossible to repay.

Present yields on the 10yr. and the 30yr. indicate more downside for the indices. Any short term rate increase by the Fed will further damage the economy and eventually invert the yield curve. They are stuck between a rock and a hard place. It's why I suspect to eventually see more QE, whether it be overt or covert.

I see the deflationary bias the global economy is now experiencing much like a tsunami. First, the tide recedes (deflation), then the tsunami appears on the horizon (more inflation), as the tsunami arrives on the beach (potential for hyper inflation), ruined lives for those without insurance (physical PM's and other hard assets like productive land).

Bond yields appear to be the canary in the coal mine to me. Some think it to be crude oil as it is the most necessary commodity on the planet along with food. As we speak, we have seen instability in those markets over the past decade.

I am encouraged by Greenspan's comments in public speaking engagements where he has seemed to change his tune. He was originally a strong supporter of gold as the most important currency in the world. Became a Keynesian cheerleader during his helm at the Fed, now reverting back to a supporter of the importance of gold. Perhaps he feels an ability to be more honest now he is no longer bound by his position as Fed chairman. Too little, too late, imo.

That's the way I see it and prepare accordingly, FWIW.

I've always thought of Beck as a shill for Goldline when it comes to his gold comments. Of course, that's just my opinion. I do share some similar beliefs to what you have quoted him as expressing.

I have stated before, I think gold is still in a bull market even after a 40% decline the last 3 years. I'm inclined to think of it in a retracement before a v shaped move to higher highs, for a number of reasons. That is if the physical price makes a break from the paper price that is leveraged against the physical market by some 10:1 to 100:1, depending on what sources you trust. You already see this happening when you must pay a premium above spot, varying widely around the globe. We could be close to those events or several years away, dunno. One thing I know for sure is that physical supply/demand fundamentals, unless they change, make these great prices to take advantage of. Considering the paper leverage used against the physical fundamentals, price could go lower. The lower the better as far as I'm concerned. Would be like picking up free money with no risk. I will not be disappointed if that turns out to be the case.

Each metal has it's own market characteristics and my comments here should be understood as gold centric as opposed to PM's in general.

I prefer to read topline economists with a background in both monetary and economic theory. I read both the Fabian socialist Keynesians and classical liberal Austrians to get both sides of the story. I also tend to read those who have left the mainstream financial industry in favor of honest disclosure of their mainstream experiences. I've listed many of them here in past posts.

It should be obvious whom I tend to agree with. :-)

Gold closed the day today @ $1,197.50.

On Dec. 8, the day before this thread started, gold closed @ $1,194.30.

That's a .00268% 'move,' which is probably less than the average you'd see for gold in either direction in any single day.

Not a significant move in the physical gold market compared to past history but significant to last several months of range bound action.

Kyle, you must be looking at Crimex futures.

No investment that produces NOTHING over time can do anything more over time than track inflation. Which is all gold has ever done.

Yes, it has amazing spikes, which have ALWAYS been followed by a return to the norm.

Sorry guys, I used to be a bit of a gold bug myself back in the late 80's. Then I realized most of it was hype, promoted by the sellers of gold.

The time to buy gold is when no one else wants it.

When you start hearing and seeing incessant radio and internet ads telling you to buy gold, that's a sell signal from God!

Too Funny! Great entertainment!

Physical gold, and silver for that matter have been very good to me.

Unlike fiat, which eventually only produces debt, w/o a debt jubilee at some point, it is so much more than a store of value. It is insurance and the only real money. The founders recognized that and much more.

Different strokes for different folks. Honest weights and measures is a biblical teaching, speaking of God.

I could be wrong but that is not hype promoted by sellers of gold.

I think it a more valueable indicator than antidotal evidence seen in TV commercials.

We all know where the prices went and he lost everything. Now, he is buying gold. He took the money that his wife got when her father and mother passed to purchase gold. I know that it has lost value since he purchased the metal. Some people just never learn.

Losing value as long as you don't sell is not losing value, just like any market. I don't even measure gold in dollars, I measure dollars in gold, or any metal for that matter.

Just like putting fiat in any market, never invest more than you can afford to lose and have a 40 year time horizon should markets stay irrational longer than you can stay solvent. Oh, and never invest in anything you don't understand.

Yet if he had simply bought an S&P index fund, he'd be up even more than that!

As you know, pick a time frame and results will vary. I don't begrudge anyone's investment decisions. I've self managed investments most of my life. Many lessons along the way. Not everyone wants that. I just happen to enjoy it.

I do what I know and have been successful with. Like I said, different strokes...., it's not a contest, more a personal challenge, at least for me.

I think if $1175 is broached again to the downside, a sharper move down may be in the cards. I would consider that to be a gift and would give some whole coins or fractionals as stocking stuffers for Christmas.

In any event, those stockings will have at least some shekels in them. It is a family tradition and an opportunity to teach the younger ones a little monetary history and help develop early critical thinking skills.

NGU, I was inspired by you about a year ago or so, as you mentioned the nice coin you were given in appreciation for your military service. I had mentioned my contacts in a private mint and my desire to have a commemorative coin produced that I could hand out to former service members to show my own appreciation. To my surprise, there were a plethora of such coins already available. I buy them for that purpose. Wonderful gifts and a small price to pay for the sacrifices of our past and present service men and women.

BTW, I have used some research by NRH over the last several years for mining output and deposit research. I use it to help me identify below tangible value gold miners and deposits for trading and investment opportunities as I wait for gold and gold miners to bottom. I use similar research reports for PM and industrial metals as well.

It is sprinkled with some commodity vs. fiat money and Hayek vs. Keynes also.

One very important thing I learned from the report was the crustal ratio of gold vs. silver as being 1:60. I had always been mislead to believe it was 1:16. When I saw that in the report, I went to several sources to verify and found 1:60 to be the correct ratio. This is often mis-stated by PM bugs and I had mis-stated it also. Learn something new everyday.

I thought you might enjoy reading it or using it in your own research or just as a source of information on miners and global deposits, so I provided the link.

God bless, Steve

In my view, like many in the precious metals community, the paper price of gold is not a true reflection of it's real value. It is a small market and the spot price can be moved up or down by leverage of paper futures/options contracts. You will never be able to buy gold at the spot price, you will have to pay the spot price plus a premium which can vary. That's normal.

Think of it this way. There is an estimated 177,000 metric tons of above ground gold. There are an estimated 10x to 100x as many paper claims against that gold. If every paper claim was redeemed against that physical 177,000 metic tons of gold, only 1 in 10 to 1 in 100 of those paper claims could be redeemed for the actual physical supply. There simply isn't enough physical supply above ground to honor the number of claims against it. Most of the paper claims are settled in cash instead of the metal. That is why it is important to buy only physical gold, not paper gold like the ETF GLD or Comex, Globex futures contracts. Unless of course you don't mind settling for cash instead of the metal.

I prefer national sovereign coins like the American Gold Eagle, American Gold Buffalo, Double Eagles, South African Krugerrands, Canadian Maples, Austrian Philharmonics, Mexican Gold Pesos, Chinese Gold Pandas, British Gold Britannias, Australian Gold Lunar Series or any other coins from government mints. Gold bars are ok too. Just buy from reputable sources and always compare prices and premiums.

People on ebay drive me crazy. Many of them are paying 10$ or more over spot. Morgan silver dollars are through the roof. Its ridiculous.

The price of silver and gold has come down a lot but you sure can't tell it when you look on ebay.

Oom Paul (Uncle Paul) on one side of the coin, the rand antelope on the other. It's a beautiful coin.

I prefer JMBullion, Provident Metals, SD Bullion, Gainesville Coins, Scottsdale coin, Texas Precious Metals or Apmex. Your local coin shop can have good deals. Lately there are few sellers and only buyers but their worth checking. If I buy from a LCS, I will take a small digital scale to verify weight and/or perform a specific gravity test on site before I purchase.

If you are interested in generic rounds or bars, you can buy directly from of the private mints in addition to the dealers/brokers mentioned above. You can also purchase bars/ingots directly from some of the miners. I have bought and sold many generic rounds and bars and keep some on hand but mostly stick w/ the national sovereign coins for vaulting or unanticipated boating accidents.

I think most gold coins are beautiful designs. The St. Gaudens Double Eagle and Indian Head Quarter Eagle are my favorite followed by the American Gold Buffalo even though at 99.99% pure is scratches easily compared to the 99.90% or less pure coins. The Mexican 50 Peso is a beautifully struck coin. The Chinese Pandas are really shiny and a more brilliant yellow. I like the Austrailian Perth Mint Lunar Series designs, the Year of the Goat and Year of the Horse the best so far, imo. Not only are Krugerrands beautiful, they offer one of the lowest premiums on the market.

I wish the fractional coin premiums weren't so high. There are practical reasons to own an assortment of them. I've bitten the bullet and paid the higher premiums but it don't mean I like it. I have traded 1 oz coins for fractionals straight across and foregone the higher premiums on occasion. That's one way to do it if you find such offers.

I don't buy numismatic coins, however I have had uncirculated coins graded for resale for the higher premiums they generate. Most of the time, it isn't worth the cost or hassle. The only time I have done so is if the minted quantities are 1 million or less.

I need to look into why the NRH report uses 1:60, just wanted to give you a heads up.

With the current spot market GSR @ 74.31 it should be obvious which is a better value to buy. Unless of course you consider Au to be extremely over valued and should be priced around $272. Man, would I like that opportunity.

As long as people keep buying it way over spot that won't change.

For all intents, the retailer profit is the delta between premiums charged and premiums paid.

Were lucky in America, unlike Europe we don't pay a premium plus a VAT to the gubermint, yet!

I have mentioned before the outstanding returns that can be gained from metals via mining stocks themselves.

If you look at the historical cycles, particularly in gold/silver, as they relate to miners, you can gain great leverage to add to your gains. You don't have to be a "gold bug" to achieve these outsized gains. You just need to understand the metals markets and where they are with respect to the historical cycles. Where they are can be debated ad nauseum.

Many professional metals analysts have already called a bottom in gold price from early November when we saw $114X.00. They may well be right. OTOH, I am hesitant to do so because of the leverage paper (fake gold investment) has on the market.

Here is a pretty well balanced link that discusses some of that. Though somewhat gold bullish (he does make some caveats), as any good investment analysis should. There are many other examples out there that are gold bearish. Do your own due diligence and see what conclusions you come to.

At this juncture, it looks very much likely gold price will finish negative for the third year in a row. These are the times I look to add some shiny to my savings. The best way to save real money, imo.

Absolutely. Consider that in 1932 a top grade off the shelf man's suit cost around $30 -- the price of one ounce gold. Today, one ounce of gold will still buy a top grade off the shelf man's suit. But you'd need an additional 1200 federal reserve notes to get the same purchasing power.

How many are willing to put in a month of work for $1200 today?

In 1950, a 12" black and white TV with a snowy picture cost a month's wages. I can now buy them for a few dollars (or probably get them for the disposal fee). According to your logic, they are now a real bargain. Maybe I should buy a few truckloads.

According to my logic, if it takes less labor (life) to buy one, they are not a loss relative to life since it takes a few minutes of lifes labor to purchase one now as opposed to the month in your example.

But you are welcome to your perceptions. They are interesting.

God bless, Steve

If you read my comments, I like poor man's gold (silver) a bit more than gold at present, due to the gold/silver ratio (GSR). I have traded gold for silver and silver for gold in my lifetime to increase my savings in ounces.

As far as stocks, I own plenty myself. PM are just an insurance policy and a way to save in something more tangible than next to zero interest bank deposits denominated in FRN's.

There are plenty of "gold bugs" that recommend getting completely out of the system (World Fiat Currency System). I am not one of them, although I have only just enough exposure to generate decent growth. I have gone from 80% stocks, bonds, etc. and 20% physical gold/silver to 80% physical gold/silver and only 20% stocks, bonds, etc. in different decades of my investing career. It has served me well.

BTW HA, not that it is important but the average monthly wage in 1932 was nearer to $70 p/month, not $35.

The premiums on those fractional gold coins hurts compared to buying full 1 oz coins. But I can get one for everyone in the family and not break the bank.

I like the radial line security feature on those new Maple Leafs. Makes for a better looking coin to me. Also, since they're not US coins, you won't need to worry about confiscation in the future if US government confiscation attempts mirror past efforts. They only made it illegal to own/trade US coins back in the thirties. That's the reason I buy non US coins as apart of my savings. I think you made a good choice.

You should have sold your gold in August 2011 and bought stocks. Gold is down 38% and stocks are up 66%.

Inflation on the dollar never stops.

That's right, Dog.

I realize some of the numbers being thrown about are somewhat arbitrary upon further investigation. Even the $70 dollar per month average wage looks a bit low depending on type of work. If someone is so inclined, you can use these two links to do some comparisons yourself. Like I said, to me it is not that important. It's not a contest. I do like talking investments, metals and natural resources in particular.

Using the data available, give or take a little, depending on type of work, it very much looks like the question should be, who would put in a weeks work for $1200?

That was an interesting exercise. Like I said, if one was so inclined, they could repeat the exercise for different time periods or even job type.

In any event, I think I'll get some cash together as the cabal will in all likelihood use the Globex to further smash prices while US markets are closed this holiday season. I look to see lows in silver from late November to be tested again.

Question.

Are you better off going through a stock broker or going directly through the company to buy stock?

Or what about web sites such as computershare.com, Scottrade?

I have READ that you invest in the stock market via mutual funds. You purchase individual stocks to play the market.

The above would not necessarily apply for a person who has plenty and can afford the losses.