Gold and Silver Price Analysis (Apr 09)

The longer SILVER and GOLD PRICES hold this position without further declines, the less likely those declines become. I expect one more paroxysmal push down, a spike down, for the end, but we may not even see that. Demand is huge, and supply is thin still, as noted in the high premiums. Gold American Eagles are again available, trickling into the system with 2 week delays.

Gold today closed down 2.60 to US$882.20. Silver closed down a penny at $12.325 cents. Most bottom targets now are US$850 and $11.80. Keep on buying, and buy with both hands if it spikes down. You won't get much time.

Surprising no one, stocks completed their correction this week and climbed back above Dow 8,000 with a nearly 250 point push today. S&P500 did even better. Now stocks will push rapidly toward 9,000 - 9,400, but do NOT get sucked in by Wall Street cheerleaders' cries of "New Bull Market!" There's bull in that all right, but it ain't "market".

US DOLLAR INDEX got unexpected good news today, in the best monthly balance of trade report in nine years. Still showed a deficit, of course, but the Depression is forcing down imports, so the number was a bit better than the usual catastrophe. Expect dollar index's rally to cease, desist, dry up, and blow away about 86.20.

DOW IN GOLD DOLLARS continues to rise toward our target of G$200 (9.675 oz) to G$215.00 (10.401 oz). After that, stocks will resume their fall toward an eventual nadir below 6,000 and gold will rise again.

Note :
To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Courtersy By : goldprice.org

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Gold and Silver Best Investment

Investors generally buy gold for two main reasons: to financially gain from increasing gold prices, and/or as a hedge or safe haven against any economic, political, social or currency-based crises.

A continued global economic tsunami and the increasingly urgent scramble for an investment lifeline will combine to power gold prices ominously higher and into uncharted territory later this year. This is the consensus of opinion among the CEO’s of a dozen emerging to mid-tier gold mining companies who were recently interviewed by BNW Business Newswire. 

Gold will be trading in the $1,100 to $1,500 range by year’s end.

There are some opinion from economist that associated the Dow Jones price with gold price. They said that ratio of Dow Jones price and gold prices will retest again at 2 : 1 or 1 : 1 base on the 1933 great depression and 1980 the first highest gold price at $800. See The Chart

Today, Dow Jones and Gold price ratio still in 8 : 1 (Dow Jones approx $7750 and gold price approx $926) and gold price at February 2009 had reached the highest level in 2009 at 1.006, almost retest the higher level $1.031. So it indicates huge room for this yellow metal to reach a new high level in this year.

Two major factors base on current condition which will push gold higher:

• The first is that the US department of agriculture's Crop Production Report in October revealed that acreage for staple food commodities such as corn is on the decrease. In the face of increased demand from China, India and Latin America, that this will raise food prices and inflation - and therefore gold prices on the back of safe-haven buying.
• The second reason for optimism is the $700 billion rescue plan for US banks, which was intended to encourage them to start lending again to revive the economy.

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India and China add more gold in Foreign Exchange Reserves

Foreign exchange reserves of India and China slumped in January-February and both the countries may go for more accumulation of gold which may have an impact on the global bullion markets.

Even as recession is wreaking havoc across economies, more and more countries, especially Asian economies, are moving to gold as reserves.

The foreign exchange reserves have declined by $62.43 billion since the end of March 2008. India’s total gold holding is between 10,000 tones and 15,000 tones of which the Reserve Bank of India has only around 400 tones. Internationally, the total gold reserves (amount of gold ever mined) is between 125,000 tones and 130,000 tones, of which roughly 25,000 tones is held by various central banks. Most of that is held by the central banks of the United States, Germany, Switzerland, France and Italy.

While the share of gold in total foreign exchange reserves is very high in United States and European countries, the share is comparatively lower in Asian countries. It will make China and India to add more gold to their foreign exchange reserves.

India is constantly accumulating its foreign exchange reserves to meet the requirements of its increasing current account deficit and to protect against volatile capital flows. With the growth of the domestic industry and higher oil prices in international markets, the current account deficit is expected to widen in the coming years. 

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