Gold: More of the Same

November 13, 2008 Gold Stocks, Market Updates, Physical Gold No Comments

At the time of this writing we have the Dow down 284 at 7,998, the NAS at down 61 at 1,437 and 24 hr gold down $5.30 at $704.00. Let’s do a quick review of the markets. More bad news on the unemployment front, more confusion on the direction and effectiveness of the bailout and increasing lack of confidence in the ability of the Government to handle this crisis. More of the same.

Gold is being swept along with the markets on the way down, but so far has not broken $700.00. I for one hope it holds, but I think I’m in the minority now. Worrying about it will do no good anyway, so it is time to move on.

With that said, let’s look at some interesting things that have come to light lately. Gulf News is reporting, from reliable industry sources, that the Saudis have purchased 3.5 Billion in gold bullion in the past 2 weeks. This is huge news that speaks towards a bottom in the price of gold. The concensus from the report says that the Saudis feel that there is little downside risk in gold at the current price. This could be the opening shot in the turn around of the gold price. I am of the opinion that this is not the first government to step in and pick up gold as it is being forced down, nor will it be the last.

Something has been making it real hard to take delivery of physical gold for the last couple of months. This is the type of buying that drys up supplies quickly. Unfortunately these purchases are usually disclosed well after the purchase has been made, leaving the small trader in the dark as to what is going on. We should keep an eye on this and see who else joins the list of bullion purchasers in the near future. If this continues, the market will rapidly change from “More of the Same”, to a new trend, the one I have been waiting for.

More On GoldCorp, GG

I have a few more GoldCorp, GG facts for your consideration. Just a few tid bits to consider regarding my comments on the company yesterday. GoldCorp currently has $450 million in cash on hand and no debt. The company also has an, as of yet, untapped $1.5 Billion line of credit. Just something to think about in the future.

Till next time, good luck and good trading!