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"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”

Wednesday, November 05, 2008

Why I Like Gold Here ... and News for Today

If you subscribe to one of my premium services, you'll have noticed that we've added a bullish gold position or two lately. Let's look at a daily chart of gold to see why.

You can see that gold is still channeling lower, but has touched the bottom of its recent downtrend. When it has done this in the past, it usually goes higher for quite some time.

At the same time, we are getting a buy signal from the MACD indicator on the bottom -- another indicator of the shift in short-term trend. And gold is now above its 10-day moving average. This usually indicates higher prices ahead.

However, I still haven't given buyers of my recent gold report the "all clear" to buy gold and silver positions. That's because the weekly indicator I told you about in that report has still not given a buy signal. It may be close, but we don't buy until we get that signal.

The reason for this discrepancy between my premium services and the gold report is that the services can trade gold's short-term moves -- the gold report is designed to trade gold's long-term moves. You may give up a piece of gold's early move, but you'll still ride the long-term trend. And the longer-term trend gives more reliable signals.

In other news ...

Some nice young guy from Chicago got a new job. Meanwhile, many Americans continue to lose their jobs. I'd say his job isn't going to be easy.

Commodities in recession as speculative bubble bursts - but the purge is over With commodity prices now back to their January 2007 levels, "this portion of the purge should now be over", but the next two quarters are likely to see further price declines reflecting the amplitude of the recession in different parts of the world.

U.S. gasoline demand up as prices fall: MasterCard

NEW YORK (Reuters) - U.S. retail gasoline demand edged up 1.3 percent last week from the previous week as national average prices for the fuel dropped, MasterCard Advisors said on Tuesday.

But gasoline demand remained 3.9 percent below year-ago levels, said Michael McNamara, vice president of research and analysis at MasterCard Advisors, citing the economic slowdown.

IEA Report Underlines Long Term Supply Side Challenge for Oil Markets
The IEA World Energy Outlook highlights long-term supply side constraints, showing that current depletion rates outstrip future demand. On the face of it, this is welcome succour for 'peak oil' theorists, who have long been arguing that the world is actually running out of physical reserves. However, the IEA is not focusing on a shortage in the physical element, but rather in the necessary levels of investment that will be needed to meet energy demand going forward, amid high rates of depletion. According to the report, conventional production will effectively remain static, rising from 70.4m barrels per day (b/d) in 2007 to just 75.2m b/d in 2030, as 'new gains' and 'old losses' balance out.
Almost Half of New US Debt to Mature Within a Year

Anthony Ryan, the acting undersecretary for domestic finance at the U.S. Treasury, wonders how to sell all the debt securities needed to fund the Troubled Asset Relief program (TARP), the Federal Reserve's various emergency lending facilities, and the federal government's increasingly wide budget deficit for 2009.

The Treasury has borrowed $877 billion since the end of Aug - including $500 billion from the public - to boost the Federal Reserve's balance sheet and start funding the TARP.

But almost all of this borrowing has been done in the form of very short-term cash management bills - with $320 billion issued in September and another $520 billion issued in October. Little or none of it has been replaced yet with longer-dated bills, notes and bonds in the regular series.

After Worst Year Since 1937, Obama May Wind Up Inheriting Next Bull Market When it comes to the U.S. stock market, Barack Obama has time on his side. XX Sean's note -- "may" is the operative word here.

Also, here is today's column: Funding America’s Future Can Make You a Whole Lot Richer …

Finally, I'm scheduled to be on Fox Business TV at 1:20 pm, discussing oil prices.
Check out my new gold and energy blog at