In the last few days gold has improved from being down in the high $1500s. Most of the price decline over the last month was due in large part to year end profit taking and also a continuation of a much needed correction. For investors who took advantage of this last week, you may have just gotten a very advantageous entry point.

The following links are to various precious metals broadcasts and interviews over the last week or so. If you’re investing in gold or silver  you should find these helpful in your decision making process.

From King World  News

 Weekly Metals Wrap with trader Dan Norcini and Bill Haynes (precious metals dealer) This will provide you with a clear perspective of the net buying and selling action as well as the technical picture from someone who has been doing it for decades.

Rob Mc Ewen Interview on Gold and Silver

Rob Mc Ewen is most well known for founding and running one of the largest gold companies, Goldcorp, for almost 20 years. He is also known as one of the best company builders in the precious metals area. In this interview, Rob discusses where he sees gold and silver going over the next 12 months, 2012.

Financial Sense 

John Ing Interview 

In this interview Jim Puplava interviews John Ing of Maison Placements on where he sees gold stocks going in 2012. For the record, John says that 2012 will be the year of gold stocks. This would be welcomed by most gold and silver investors as most precious metals stocks have not performed on par with the price of gold. Even the majors have failed to deliver returns that are anything to mention. For example Gold Corp (ticker GG) istrading at approximately the same price today as it was 4 years ago.

I hope you find these updates valuable and useful. If you’re just beginning to invest in gold you may find the following article on how to invest in gold helpful in getting started.

Until next time.

Well, if you’re a new investor to the gold and silver market, you’re quickly learning the meaning of volatility. Consider the last 2-3 months “baptism by fire.” In my investment experience, there is seldom a time an investor simply jumps into a bull market without getting banged around and bruised by a correction or 2. So, we’re going through one of those longer-term corrections right now. This always leads to investor pessimism.

In the grand scheme of the secular bull market in gold, this correction is healthy for gold’s long-term viability. For we can’t expect any market to continually go up day after day. All market moves are “energy.” Some moves are stronger than others yet, a market has to pause and rest for the next advance. As we’ve discussed and witnessed many times before, any market that goes parabolic in one direction, will surely go the opposite direction, usually twice as fast.

Keeping It In Perspective

As the chart below illustrates, gold was up approximately 15% for 2011. That’s not a bad year if you’re investing in gold. Given the domestic equities market, I think gold has been one of the single best investments over the last 12 months.

However, if you made your initial investment into gold within the last 6 months, you might feel more as if you’ve been on somewhat of a roller-coaster ride. As the 6 month chart shows below, you pretty much have been.

As the 5 year chart shows us, the key to making money in a bull market is to get in and sit tight.  Gold is not an easy market or for the faint of heart. It will test your conviction (decision) several times over. Then, when sentiment is at it’s worst, it takes off again. Patience is sometimes an investor’s best asset.

This does not mean you buy and hold forever. This is where many investors have gotten stung and misled over the last 20 years. We were led to believe that if you just buy growth stock mutual funds that you can’t go wrong. And as long as you have 70 years, that will probably hold true. However, markets move through cycles that are born, develop, mature and expire. The key is to catch the majority (60-70% of the ride).  They just don’t tell you that the hard part is knowing when to lighten up your position and ultimately scale out.

The Forces of Inflation versus Deflation

Another myth bantered around investment circles is that we have to be in either an inflationary or deflationary environment. Currently, we’re going through both and the effects of each can be felt at different times.  We have a massive debt bubble unwinding. For example, prior to 2007 real estate mortgages represented approximately $15 trillion. This has come down by about $5 trillion. This is highly deflationary. At the same time, we have central banks fighting this deflation with massive amounts of fiscal stimulus by approximately $3 trillion so far. Simply put, you will feel both as this cycle plays out.

Timing is Everything

As I mentioned in a previous update, I thought this correction would play out into 2012. So, now what? If you’re looking for a quick hit of 10-20%, gold or silver shouldn’t be considered, unless you’re an accomplished trader. Gold or silver should only be considered as an investment with 2-3 year time horizon. This is because no one really knows just when the market is going to advance to the next stage or, pull back. One thing we can be pretty sure of though is that the bull market in gold should continue as long as central banks stick with inflationary policies.

As I mentioned in my last gold market update gold and silver are going through a corrective process. The 2 elements during a correction or any market move are time and price. This current correction just needs to play out and run it’s course, but in due time. Many investors are too quick to write a market off and it happens because the market doesn’t make a move on their watch.

There’s no sense in arguing with the market. It will do what it’s going to do. Remember, a  400 point or 27% move in gold (going from 1500-1900 per ounce) in a few summer months is not normal to say the least.  It’s a sprint. After a sprint, just like a runner, the market gets tired and needs a rest.

This gold bull market has rewarded investors on one thing over the last 10 years: PATIENCE. Or, get on the right side of a trend and sit tight.

I always like to pass on other people’s commentary on the gold and silver markets as I believe it helps to hear several opinions in developing your own. Investing in gold has been a successful investment for the last decade however, that doesn’t mean you should just dive right in. It’s important to learn how to invest in gold (with a game plan) first.Right now, people are doubting gold and you know what? That’s the perfect set up for the next run up. However, it will happen when it feels as if the market is done, kaput.

That’s market psychology. The key is learning to typically manage and go against your emotions. But you know what most investors do? They wait until a big run up to jump in. They buy near a cyclical top. This is usually the time the market is fully invested for that particular cycle. Then, when the market sells of, they decide to sell. It’s not easy buying a declining market but remember the phrase: Sell into strength and buy weakness.

In any event, here are the interviews and broadcasts I’ve been listening to over the last week. I think that you will find them helpful. If you have any shows or broadcasts that you listen to, please feel free to pass them on in the comments section below.

1) King World News Weekly Metals Wrap This broadcast is always in my weekly roundup as I think it provides a good perspective from precious metals dealer Bill Haynes as well as trader Dan Norcini. Also, Dan is not afraid to say when he believes gold is ready for a good correction.

2) Jim Rickards on King World News - There is a reason Jim Rickards is a regular on King World News. Mainly, his grasp of the global macro environment is hard to match. In this interview Eric King and Jim talk gold, the U.S. Dollar and the events that are happening in Europe.

Ned Schmidt on Financial Sense – In this interview, Ned talks about the current bear market in silver. Bear market? Yea, silver after reaching $50 an ounce has pretty much been on a downtrend. But this doesn’t mean that the long term bull market in silver is over.

Bob Hoye on Howestreet - In this interview Bob Hoye discusses the gold and silver markets as well as the latest happenings in the Eurozone that are affecting markets worldwide. Bob’s grasp of market history is always refreshing. Additionally, Bob is one of those people who isn’t afraid to say when he thinks the markets are ready for a good correction.

I hope you enjoy these interviews and broadcasts on gold and silver. Have a great week and Thanksgiving.

If you’ve been investing in gold for any length of time, then you realize how this market can play on your emotions.  When the price is going up, it seems like there is no end in sight. And, when the market is correcting, it seems like the correction will never end. This is simply how fear and greed often times keep us from doing what we know we  should do.

The precious metals market is currently undergoing one of it’s normal corrections however, this one has really thrown people off and made many ask if they should throw in the towel.

One of my favorite places to go for gold and silver prices is Kitco. Over the last 7-10 years, whenever I’ve wanted a quote on gold or silver, I’ll pull up a quote off of Kitco. Getting back to perspective, let’s take a look at the 10 year chart in gold:

Talk about perspective, right? Seriously though; when looking at this 10 year chart, is there any doubt of the overall direction of the gold market?  Shorter-term, it’s an ugly correction that looks like this:

Some investors get confused as to how these corrections work. Corrections do not just go down for a while and then, the market takes off.  As I mentioned in my Gold Update last month, gold has fallen into a consolidation pattern that we can refer to as a sideways chop. The frustrating aspect about these corrections is that they can take months before running their course.  Impatient investors will  jump back into the market because they’re afraid they’ll get left behind. However, they end up getting whipsawed.  There are a few things that stick out on the following 6 month chart on gold.

Gold’s Summer Surprise Rally

Typically the summer months of May-August are dull and boring. However, this year gold had a huge rally where it reached an all time high of $1900, rising from $1500. Yes, that is a $400 per ounce move or about 27% in only a few months. For now, gold is simply digesting those gains.  00

The price of gold will take off if and when it decides to, as it always has.  The key area to watch now is $1,900. Anything less than that and we’re still in a consolidation. So, everything really looks fine on a longer term basis. Investors who are upset because gold hasn’t “rocketed” to $2,500 or $3,000 are just impatient.

I have a feeling that the next up leg in the gold market will take gold well into the $2,000s. But it’s not going to come easy. All I mean by that is that we can expect to see gold rise to levels like $1700-$1800, only to drop back to $1650 again.

Once most of the investing public has somewhat thrown in the towel on gold, is when gold will decide it’s time to take off.

As we head into another week in the precious metals market, not too much has changed since my last post which you can find here Gold Update and the Coming Phase Transition.  As I pointed out, the gold and silver markets appear to have entered into a consolidation period following a much needed correction.

If you’ve been investing in gold or investing in silver for any length of time, you know that these types of corrections are to be expected. If you’re a long term investor in these markets, the corrections should be welcomed as these kinds (long lasting) of corrections are almost always preceded (and followed) by significant upward momentum. They’re what long term bull markets are built on.

What still amazes me (and I am not trying to sound dramatic) is how the last 10 to 12 years in gold has gone pretty much unnoticed. Most of the skeptics just seem to focus on saying that “gold is in a bubble.” And, while I do believe that we will be in a bubble, one day in the future, studying the following 10 year chart is more reflective to me of an upward trending market that has not topped. Yet, I have to remind myself I am biased. (Anytime you are long a position, you are (by definition) biased.

And, I completely realize I may be wrong here and that no one is given a secret message when a bull market comes to a close. However, fundamentally and technically speaking, this market remains intact from what I can see.

And, to elaborate further on the precious metals market, here are a few of the broadcasts I’ve been listening to over the past week. I think you will find them useful whether you are considering the precious metals markets for the first time as an investment or, if you’re already invested and looking for some direction.

King World News Weekly Metals Wrap for a good fundamental and technical view on gold and silver over the last week, Eric King Interviews dealer Bill Haynes and trader Dan Norcini.

King World News Interview with Ben Davies Ben Davies has produced some great calls over the past year (I like that he will tell you when he thinks the gold and silver markets are overvalued vs. being always bullish.) In this interview he explains his current views on the market.

Financial Sense Interviews Martin Armstrong In this interview with Jim Puplava of Financial Sense, Martin Armstrong explains why the global monetary system needs reform, how he views gold as more of a hedge against government mismanagement versus inflation and how he sees the gold market playing out over the next 6 months.

I hope you find these broadcasts on the gold and silver markets relevant, informative and useful. Please remember that the purpose of this site is educational. Anything written here is not intended to be a recommendation to buy any security. Please conduct your due diligence before entering into any investment.

Until next time…MOS

If you’ve been investing in gold for any length of time, you’re used volatility in this market. However, that isn’t to say that when it comes it makes it any easier.

Short to Intermediate Term
After experiencing major volatility, it appears gold has fallen into a consolidation pattern. This can be seen when looking at the following 30 day chart.

Typically, a consolidation pattern begins, when the daily high and low ranges begin to contract.  7-10 days is usually a minimum “day count.” This is pretty evident if we look at the 30 day gold chart above. To gain a broader perspective of where we’ve come from (what we are contracting – or settling down from) we’ll need to look at the 6 month chart on gold. Clearly, you can see that the high and lows represent a wider range of returns. If our 30 day chart showed a higher range, it would indicate that greater volatility was ahead.  For now, you can expect a sideways chop until the next leg up in gold, which probably won’t occur until next year.

This does not mean that it can’t or won’t happen sooner or, that we’ll get another down leg. It’s just that the probability that we’ve entered a consolidation is high. Technical analysis is not an exact science. It’s meant to improve your odds or chances of winning trades and to assist you in knowing when you take a position or, lighten up. As a trader, you have to let the market guide you versus telling it what to do.  The real test of your emotions comes when the market moves against your position. Listen, look and try to understand what the market is saying. A good trader, investor learns to adapt.

Long Term Analysis
When looking at the 5 or 10 year chart on gold, the current correction looks like a “blip” on the screen.

For long term investors this correction can be looked at as a natural and healthy occurrence. “How so?”, you ask? I realize that you might be down if you took a position in gold over the last few months. Gold was advancing too far too fast. If it didn’t correct now, it would have gone into it’s final move prematurely.  That period appears to be a ways off.

Understanding the Final Phase of a Bull Market – Phase Transition
As Martin Armstrong has written this year, a phase transition occurs when a market enters it’s final and most dramatic move.  This move will cover more ground and it will do so faster than the entire preceding period (eg. Gold @ $1670 from $275 back to 2001)

The Boiling Pot of Water Analogy: The best analogy is to imagine how a pot of water boils. In the beginning, you aren’t even sure the stove top is on. You may even double check to make sure you’ve correctly calibrated the dial to “high.” So, now you walk away. A couple minutes later, you walk back into the kitchen and although you see a few heat bubbles, no big deal. You decide to walk outside and check the mail. Only a few more minutes passes, you come back in and not only is the water boiling like CRAZY, there is water everywhere. This is referred to as “transition boiling.” Every bull market I’ve ever traded or participated in reaches this phase but never fast enough for people to experience it.

Think tech stocks in 1998-99. Think housing from 2005-6.  The gold market is not there yet, but when it does get there, many people will be out checking the mail or wondering what just happened.

You can see where the phase transition took place in the NASDAQ (between 98-99) A major correction takes place from 2,000 to 1,500 (approximately) Then this market goes from 1,500 to 5,000 fast.

Gold is one of the most emotional investments in the financial universe. When it’s going up day after day, month after month, everything is good and investors are happy. When it drops, investors wonder, why am I holding this yellow metal that doesn’t earn any interest.

When investing in gold and investing in silver, it’s always important to keep things in perspective.  What I mean by this is that you have to step back and look at the big picture, analyze the facts first, before making a decision.

There are many investors who were looking to get into gold but, only after a correction. Yet now, after the correction, they’re afraid to invest for fear that gold might drop further.  This isn’t anything new and it certainly isn’t anything new in this bull market in gold.

Starting with the most recent 30 days, lets look at the price of gold over the last decade.

30 Days – Doesn’t Look So Good

60 Days – About the Same

1 Year – Up 24% Looks a little better?

How About 10 Years?

Can you see that by looking only at the last 30 or 60 days, you’d be discouraged and think all gold does is go down? When you take a step back and analyze all of the available data, what you’ll begin to see is not just how much gold has gone up the last 5-10 years, but just how many times these corrections occur in the gold market. For example, notice how in 2008 during the financial meltdown, gold went from approximately $1000 to almost $700, making investors sit through an almost 30% correction. However today, gold has almost doubled in price since then.

In closing remember corrections in the gold market are extremely common. Regardless, that doesn’t make them any easier to live through.  You will have to face your emotions every step of the way. This is especially true when you get started investing in the gold market just before a major correction.

I hope this provides you with some perspective regarding the latest gold market correction.