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What Is Gold Doing Now?

By: David N. Vaughn, Gold Letter, Inc.

-- Posted Wednesday, 31 May 2006 | Digg This ArticleDigg It!

While I do look for sharp corrections and fluctuations in the daily gold price I still refuse to believe that gold even at around 650 an ounce is really over priced.

This morning I was drinking my cup of coffee at Gene’s Restaurant at the counter and this fellow next to me in his 30s was looking at the stock market particulars in the newspaper.  He commented to me how those gains just did not seem to be there anymore as they were just a few years ago.  He was still waiting for the DOW to continue its climb higher.  And was this fellow following the activities of the gold price and commodities in general today?  I think his reply was, “What’s a commodity?”

And is the mainstream paying attention to the gold price?

Bill Buckler - “…the best one can say about the US Dollar was that it stopped going down this week, there has been remarkably little notice taken of Gold by the mainstream press. There has certainly not been much in the way of "I told you so" being trotted out.” “But the great majority of people weren't looking over there. They were looking at their stock market and at their Central Bank.”

It pays to listen to what Bill says.  This man knows his stuff.

Bill Buckler - “Everybody knows that the US Dollar has not already crashed in ruins only because it is still being accepted in exchange for real goods by exporters to the US, notably the Asian nations.”  “THERE IS NO ECONOMIC INCENTIVE FOR ANYONE TO HOLD THE US DOLLAR, the rate of return one can get on $US denominated instruments does NOT compensate the holder for the loss of its purchasing power. POLITICAL incentives there certainly are, lots of them. A WHOLESALE DUMP OF THE US DOLLAR BY ITS FOREIGN HOLDERS WOULD LEAD TO INSTANT ECONOMIC AND FINANCIAL UPHEAVAL EVERYWHERE.”  “The desperation is written all over the amazingly fatuous remarks of US political leaders. It is written all over the mainstream press as they keep on repeating that just because everything looks bad doesn't mean it IS bad.” - for more info, click here!


Let’s go back and read those last words spoken by Bill as this is important.


“A wholesale dump of the US Dollar by its foreign holders would lead to instant economic and financial upheaval EVERYWHERE.” 


This day is coming folks.  The dollar is going to continue to deteriorate and a day of severe reckoning is coming.  We told you so and we believe this event is occurring even now as we speak and will only continue to snowball as time progresses.  And these are the reasons this gold bull market has not even begun yet.


Yes, market professionals and those financially astute around the world are buying gold and related commodity investments, but the masses in general are still looking for the return of the glory days of the 1990s.  Still, with endless hope so many are following the DOW JONES average each day waiting for the figure to climb higher and break new records.  And interest rates continue to climb as we breathe. 


The fed has become a slave to market conditions and no longer guides policy but merely “reacts” to market conditions as they are statically changing.  All I can say here is continue to look at the fundamentals, fundamentals, fundamentals…


That really is what we need to study and follow each day as we attempt to determine where the markets and the gold price is heading.  I just don’t believe these higher commodity prices represent merely a short term rally.  Instead, these higher prices are an indication of trend setting changes occurring in this new 21st century.


And the top professionals believe that the fireworks have not yet even begun.  Read below what Dr. Martin D. Weiss has to say about present market conditions.  Dr. Weiss has appeared over the years on ABC, CBS, NBC, MSNBC, FOX, and CNN and knows his subject material well.

Dr. Martin D. Weiss - “This explosion in commodities is no fluke.” “Nor is it a temporary phenomenon.” “It is driven by powerful, fundamental supply-and-demand pressures that have been building up for many years and are just NOW beginning to manifest themselves.” “Even the immediate trigger of this week’s surge fits perfectly into the classic scenario of run-away commodity prices.” “I’m talking about the outright failure of the U.S. Federal Reserve to do or say anything that might slow down the commodity price explosion.” “That’s why on Wednesday, minutes after the Fed’s announcement, commodity prices turned sharply higher.” “That’s why they went through the roof yesterday.” “And that’s also why, despite temporary corrections, they’re bound to keep going and going.” “But in my view, nothing can drive gold, silver, copper, oil and other commodities higher — and faster — than ...”  - for more info, click here!

Martin goes on to describe how a deteriorating US dollar will drive gold even higher.  And as we continue to repeat over and over and over again the average man and woman on the street do not even comprehend these significant economic changes occurring around us.

And in general what is happening presently in the gold market and where will gold be tomorrow?

“These levels have not been seen since 1980, and an ascent of this ferocity has not been seen since 1979. Embarrassingly, I remember those days. Few do.” “What is going on? Why? And how do investors deal with it?” “I like to defer to observers with even longer memories than mine. On Friday, Dow Theory Letters' Richard Russell said: "...Gold is now in one of the most powerful bull markets that I've ever seen, and I've seen a lot of bull markets in my 81 years. This gold bull market far surpasses in strength the gold bull market of the 1970s. This bull market is far bigger, it's far more international, and it has much stronger and broader fundamentals than did the bull market of the '70s." “…the primary trend of the precious metals has turned bullish.” "…the shorts in gold and silver are trapped, and it's just a matter of how or which way they are forced to cover. Yes, the primary trend is subject to corrections, but in bull markets the corrections are always temporary, and in due time the items advance to new highs." - for more info, click here!

Subscribe to Gold Letter to receive recommendations of under valued gold & silver stocks poised to rise in a climbing gold price.  ü - click here!

Comments? Thanks for coming by & please do come back.

David Vaughn
Gold Letter, Inc.

Readers are advised that the material contained herein is solely for information purposes. The author/publisher of this letter is not a qualified financial advisor & is not acting as such in this publication. Gold Letter, Inc. is not a registered financial advisory. Subscribers should not view this publication as offering personalized legal, tax, accounting or investment related advice. All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author’s control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The owner, editor, writer and publisher and their associates are not responsible for errors or omissions. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Authors of articles or special reports contained herein may have been compensated for their services in preparing such articles. Gold Letter and/or its affiliates may receive compensation & or stock options for the featured company’s right to publish & reprint & to distribute this publication. Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities & therefore information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. Investors are advised to obtain the advice of a qualified financial & investment advisor before entering any financial transaction.

-- Posted Wednesday, 31 May 2006 | Digg This Article


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