Buy Gold, But Which Kind?

Boy it is getting late.  My apologies for posting so late in the day, but it does give me the ability to give you market closing prices.  The Dow closed down 248.82 at 8,200, the NAS down 56.82 at 1489.64 and gold was up $1.50 at $811.60.  The gold price is moving lower, but is still within the trading range.  $800 is still the resistance line.  If gold can hold that, things will be looking up shortly.  If not then gold will retest lower levels and that will provide better entry point s for the stocks that we are interested in.

I can not emphasize this enough.  Gold stocks are in a very oversold condition! The question here is, do you buy a stock that will be worth $60 to $100 per share at $24 or at $20?  Will it really matter that you missed $4 to $6 when your shares are trading at over 100% of what you paid for them?

John Nadler wrote this today, which shows how deep this “recession” is going.

Sales at jeweler to the wealthy Tiffany’s were down 21% vis a vis 2008, for a telling example. Gottshalks and clothing chain Goody’s both filed for Ch. 11 today, while Macy’s stock took more punches than Oscar De La Hoya draws in a single match. Thus, the dollar became the asset of choice to park funds in once again today. Wise choice, at least on a day when oil fell back to near $36 per barrel and stocks headed 260-points lower.

Beige Book data showed the US economy fading across all regions last month due to the lethal combination of unavailable credit and slumping retail sales. Not that other economies are faring a whole lot better. Germany’s for instance, contracted to a meager 1.3% growth rate – the worst in twenty years. China thus becomes the world’s third largest economy, with the US and Japan still ahead. For the time being. The country revised its 2007 growth rate to 13 (!) percent. It will be lucky if it can show half of that unreal number at the end of 2009. And so, the economic world churns…

The beleaguered banking sector was back in the news, with Deutsche Bank reporting $6.3 billion in Q4 losses. Germany’s largest bank saw its stock fall by over 10% following the shocking loss, but HSBC Holdings Plc was not far behind, showing a near 8% loss in its shares, after it was suggested that Europe’s largest bank by market value might have to raise $30 billion to bolster capital and cut its dividend in half. Wells Fargo will also need to raise about $10 billion as well as cut its own dividends, following ‘disappointing’ earnings.

The “media is the message”, to borrow a time honored phrase. All in all gold is holding it’s own under considerable pressure.  When the masses figure out what is really happening to them, gold will take off and the internet bubble will look like a pimple in comparison.

BUY GOLD, BUT WHICH KIND?

It has come to my attention, that when considering physical gold, I have never mentioned what type to buy.  I can only offer my apologies.  I am, after all, not an “expert”.  I am an average Joe and my feelings are that you buy what you can afford.  Everything that I would recommend would be gold as close to spot price that you can get. Numismatics will not carry any premium during tough times.  Spot is what you need to adhere to.  Stay with .999 pure if you can, but Krugerrands, which contain 11/12 gold and 1/12 copper usually trade for $4 to $6 less that Maple Leafs and Gold Eagles.  In the future I don’t think anyone is going to care.  To repeat, buy gold coins and stay as close to spot as you can.

Till next time, good luck and good trading!

Also Noteworthy:

• Buy Gold on Dips
• Buy Gold Now
• Gold: Close To Spot
• Gold Stocks Gap Up
• Buy Gold And SILVER Coins On Pullbacks!

Incoming search terms for the article:

• http://www buygoldco com/gold/