Gold Rises on $7.7 T Bailout

December 1, 2008


In our last commentary we forecast an up trend that would end roughly around November 27 and we were accurate. Over the past two weeks, our mining stock pick increased by roughly 25%. Friday commenced a short down trend which should reverse close to this month's full moon.

Meanwhile, gold's price surged from $700 on Nov. 20th to about $830 last week--a 20% increase. Strong gold sales, and an increase in demand helped push the price of all commodities:

- India Gold Demand Rises on Safe-Haven Buying - Reuters - Nov. 24

- Saudi Arabia, UAE Lead Gold Demand Increase in Q3 (+51 and 56% respectively) - Saudi Gazette

- US Stocks Post Biggest Two-Day Rally Since 1987 on Citigroup - Bloomberg - Nov. 24

- US Pledges Top $ 7.7 Trillion to Ease Frozen Credit

The last piece of news is perhaps the most astounding. When you add up all the Fed's financial commitments, it comes up to $ 7.7 Trillion. That's all going to be created and pumped into the system--the implications of which are that inflation will soar. Enjoy cheap gas and stock up on precious metals, because when the next major cycle begins in about a month, things will be a lot different.