Buy Gold Now

The DOW is down 176 to 8693, the NAS down 35 to 1580 and 24 hr gold is down 13.30 to $731.40.  Gold is still in 720 to 750 trading range, but sliding toward the lower end.

Yesterday the market was loving the Chinese stimulation package and today the market feels that it will not be enough to slow the global economic slowdown.  What a difference 24 little hours make!  Oil closed under $60.00 per barrel and that took gold down along with it.  Gold is still linked to oil as a commodity and will follow it until it breaks out on it’s own and starts acting like what it truly is, real money that is not debt.

Gold and gold stocks have held up remarkably well in view of the onslaught on the markets all around them.  This leads me to the point of this missive, that it is time to buy gold now.  This is not a back up the truck moment, but the down side risk lessens every day that gold stays in the 720 to 750 trading range.  I will reiterate that I can not rule out a drop into the $600s, but it would not hurt to pick up some quality gold stocks at this level because i think the drop into the $600 level is not likely.  True, it is hard to catch a falling knife, but the down side risk in these stocks is lessening every day.

GoldCorp, GG

Let us take a look at Goldcorp, GG.  I own this stock and have purchased it a varying levels. This company is well managed, has ample cash on hand and is un-hedged.  In short, when gold makes it’s next up leg, this stock is well positioned to soar right along with it.  As recently as early July GG was treading in the low $50 range.  Today it closed at $21.28, up from it’s recent low in the $15 range.  There is not a lot of down side in this baby, and if it does drop a little more, I will be more than happy to pick up more shares at these bargain basement prices.

It is imperative that we keep in mind the most important lesson of trading.  BUY LOW AND SELL HIGH!  If we were to buy 100 shares now, 100 at $20,  100 at $19 all the way down to the “bottom”, we must conversely sell in increments as the market rises.  When you purchase a stock you should have a sell point in mind the day that you buy it. If the market is exploding upward choose your percentage point gains and sell portions and be happy with the profit that you take off the table.  You will never, without great luck, pick the bottom or the top.

I don’t look at gold stocks the way I look at stocks in the general equities market.  These issues are coiling for a moon shot.  The only real mystery is exactly when they will be launched.  I will wait and I am not giving away any of these gems until they do launch.  Until that day, I am patiently acquiring more.  When I discuss stocks that I like, I am in no way suggesting that you purchase them based on my opinion.  Do your own research, check the charts and call the companies and talk to management.  After all, it’s your money.

Till next time, good luck and good trading!

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• Buy Gold on Dips
• Buy Gold Coins, Bullion to Hedge Dollar Drop

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