Here's where Gold prices are going!

People are getting a bit nervous as they see Gold prices retreating. Today they hit another recent low down to $1319 as the rioting in Egypt continue. However this drop in Gold started back at thew beginning of January as is shown on the chart I have added below. You will also see the red line I have drawn on the chart which shows how low we are going to go in the near future.

As you can see the short term plateau is around $1275. What happens from there is anyone's guess.
The Dow Gold ratio will close even higher today and is already at 9.1 if the Dow closes at 12,000. Right now the Dow is down 44 to 11,945, so I am being conservative in my estimate.

But there is a synchronicity happening here and coincidently with the stock markets hitting their peaks. That is why I have said that Gold prices are the canary in the mine for the stock market. I know I am contrarian to most all market commentators. Time will tell who was correct in their outlook.

Market comments for Jan. 27th

Sorry for not posting these past 4 days. I was in Las Vegas trying to help the economy. I didn't help it much, but I did help mine, if you know what I mean. :) Let me get now right to the news this morning. Initial Jobless Claims soared up this morning to 450K new Jobless Claims. This was not what markets expected. Expectations were for only 400K new Jobless Claims. Last week the number was 403K.

Also giving the economy a whack was Durable Goods Orders. They came in for Dec. at -2.5%. So much for the great Christmas everyone was touting in the media and that the Consumer was back. Expectations were for +1.5%.

The markets have hit their respective peaks. The Dow managed to hit and exceed 12,000 while the S&P 500 hit 1300. Many think we now are ready to take off to the upside and a new BULL MARKET. I think we are going to take off too, but not to the upside, but the DOWNSIDE. Here's the data on Gold I have been keeping track of. The first chart below is of the Daily Gold prices for all of 2010 to the close yesterday. You can see the speculative bubble is bursting there and the second chart is off the Dow/Gold ratio.



Also worth noting is the Baltic Dry Index charts below. If this isn't signaling a market decline and possibly a double dip recession, I don't know what is. The second chart compares the S&P 500 to the Baltic Dry Index. Both are on exponential Log Scale and you can see that the S&P is currently not tracking the real world commercial data of the Baltic Dry Index. That's because of speculation now in the stock market with Bernanke claiming he is doing it with QE2.

Market comments for Oct. 7th

Initial Jobless Claims were down 11,000 to 445K Claims for the week of Oct. 2nd. Expectations were for 450K. Continuing Claims were at 4.462 Million vs. an expectation of 4.450 Million. So the numbers were basically in line with what folks expected and basically unchanged for the past several months at this level of around 450K. This, while not good made the market Futures jump because it wasn't worse. That's a sad state of affairs isn't it.

Everyone waits now for tomorrow's Unemployment rate for SEPT. Will the number be the same and stay at 9.7% or will it tick up to 9.8%? Will this number drive the markets up or down? Give me a break. It isn't good for sure, and one I know would ask, "But is it Bad?" There is no real difference in the numbers, unless you are one of those unemployed. It is bad for America.

Two year notes hit a record low and 10 year Treasuries are now yielding 2.39%. The dollar continues to drop while many work today to make some dollars, even though their purchasing power is less today than yesterday. Gold hit another new high today at $1360/ounce.

European markets are up as are Dow and S&P Futures. We should cross over 11,000 today and are now closer to the 11,200 market top I had predicted back on Sept 21st. This rise in the market is confounding many, who don't understand the relationship of stock market assets in equities and the drop in the dollar and the rise in Gold. There is no real net change in the purchasing power, but it makes people feel better. That's the play right now. Hard assets like commodities are rising because no one wants to hold paper, except those in retirement who are finding it more difficult to survive.

I do eventually see Home prices will rise as these are also hard assets and the price of these assets will have to gain and prices rise before foreign buyers invade us to buy Commercial jewels across the U.S.

GOLD settles back again while the market rises

Gold has finally gone down as the market has gone up. On March 17th I said the following, "If Gold can get back below 900 watch the market move up more strongly. Gold is at 916 in pre-market. The low closing last week was 905. We were as low as 820 in January and I can see Gold pulling back significantly to these levels if news continues good."

As we now know from the 3 month chart above, after that statement on March 17th, Gold shares soared after the treasury decided to buy back Treasury notes, going to 952 before settling in back at the close Friday of 880. That is a significant pullback and shows the rally for the past 30 days is for real. Watch for moves up in Gold to signal a market reversal.