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Golden Minerals is a junior silver producer with a strong growth profile, listed on both the NYSE Amex and TSX.
Message: One man's opinion on gold
The following is an entry that was presented by me to the Original Sixteen To One Mine website here in California this morning that I thought the readers may have an interest in:
| By bluejay |
01/05/2009 10:56AM |
| Gold $848.70 down $26.20 Silver $10.96 down $ 0.57 Gold/XAU Ratio 7.14 Gold/Silver Ratio 77.44 US Dollar 82.68 up 1.34 Crude Oil 46.97 up $ 0.63 Gold prices are being dragged lower today with a firmer dollar. The dollar continues to bounce higher at about 83 following the severe beating that it took in December when it collapsed from 89 to almost 78 in just two weeks. The recent 17 day move on the dollar is viewed as a "dead cat bounce" and is expected to fizzle out in due time. The December dollar drop amounted to a 12% loss for the greenback. It's snap-back reaction so far has amounted to about 6%. In a bear markets, as the dollar remains in, the 50% reaction following a crushing decline is normal and sometimes can be even greater before the lower major trend re-establishes itself. Concerning gold, about three weeks ago the metal lifted above the $840 level from an intermediate declining phase restraint that been in force since it traded back under the $1000 level in mid-March of last year. The $840 area is now generally considered, a fortress of powerful support. Resistance areas once considerably broken later evolve into very supportive levels. "Generally" means that it can even trade lower but that would only be a temporary price condition. A good example of a temporary condition would be the time gold rapidly approched the 1000 level and continued past it. Unfortunately, for me and many other people we became so excited at the event that we temporarily lost our perspective. This can be equated to being at a party with four drinks under our belt and feeling that we are invincible. Stepping into a car with this condition, the following events could be disastrous. Considering that gold is in a very strong bull market, the long term buyer could have made a temporary purchasing mistake but the short term trader could have been really hurt if both had followed it past 1000. History has taught the trained eye that the levels of 1, 10, 100, 1000 and 10,000 are psychologically formidable areas to better on first contact. The same applies to declining markets when prices approach these levels from above. A recent exception to this rule is the Dow Jones Industrial Averages breaking and staying below the 10,000 area on its first contact. A valid case can be made for the 5 number and 50, 500 and 5000 but the previous set of numbers beginning with 1 are most significant. Sinclair says, concerning the 1000 level on gold, that the third contact will be the charm needed to finally put it behind us. I personally don't have Sinclair's experience but based upon his uncanny success I will accept for now his judgment. So, this morning with gold prices approaching the $840 area it is in my humble opinion that an OPPORTUNITY currently exists for you in acquiring the metal in the form of your choice. |
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