Blog

In the twelve months ending August 31st, gold has risen 46.5%, but the XAU Index of precious metal mining stocks climbed only 17.7%. By itself, that is a good rate of return for mining stocks, but not what one would expect given gold’s appreciation over this period.

September 4, 2011 – Since March 23, 2001, we have been holding goldgrams as our Core Currency Position.  In other words, we have been keeping our liquidity – which is sometimes also referred to as one’s “Cash Position” – in goldgrams held in GoldMoney.  By implication, we have therefore minimized as much as possible ourRead more

July 11, 2011 – Discussions by policymakers to increase the US debt limit are in the eleventh hour.  Sadly, so far the circus of intense political posturing has avoided highlighting the real issue. It is not the debt capacity of the US government that is of primary importance, nor how much will be cut fromRead more

July 9, 2011 – Gold closed in New York this past week at $1,541.20, which is only $15.50 below its all-time record high close of $1,556.70.  In other words, a 1% jump from Friday’s closing price will put gold at a new record.  It could happen this week. Take a close look at the followingRead more

June 14, 2011 – The solvency of the European Central Bank is being called into question by some brilliant in-depth research from OpenEurope.org.uk.  This independent think tank believes “the EU must now embrace radical reform based on economic liberalisation, a looser and more flexible structure, and greater transparency and accountability” in order for the “EU’sRead more

May 30, 2011 – Bull markets do not move in a straight line, nor do the price of gold and silver.  Their price advances, and then retreats to ‘correct’ the previous advance. For the past four weeks, gold and silver have been going through one of these periodic price corrections. During these corrections, underlying supportRead more

I am not a mathematician, but those knowledgeable about math have explained to me the difference between a parabola and a hyperbola. I’ll cut through the math to get to the key point. A hyperbolic rise in price is much faster than a parabolic one.

February 14, 2011 – Back in April 2007, I wrote about the three stages that appear in every bull market, and more to the point, that gold was approaching the end of stage one.  Gold back then was still trading around $690, and therefore well below its then record high of $850 reached in JanuaryRead more

February 12, 2011 – In precious metal bull markets, silver outperforms.  Its price climbs at a faster rate than gold’s price.  The reverse happens in bear markets.  Silver’s price drops at a faster rate than gold’s price.  The following chart of the gold/silver ratio illustrates this phenomenon. At the peak of the last precious metalRead more

February 3, 2011 – An article today in The Wall Street Journal highlights the latest rise in the price of wheat.  Blaming bad weather, it notes that the “global wheat market is caught between freezing winds and a sirocco.” The WSJ therefore warns that “investors should beware of whiplash as weather normalizes.”  Given that wheatRead more