More Gold Questions

As a general rule, the most successful man in life is the man who has the best information

The Dow on Gold’s terms:

– During January 2000 gold traded at an average price of $284.32

– January 2000 the Dow was 10,900

– 10,900/$284.32 per ounce = 38.33 gold ounces to buy the Dow

Today gold is trading at $1570.90 while the Dow Jones (DJIA) continues to break records, up another 30 points as I write to 14,284.

14,284/1570.90 = 9.09 ozs of gold to buy the Dow today.

38.33/9.09 = 4.2

The Dow on Silver’s terms:

– During January 2000 silver averaged $4.95 oz

– January 2000 the Dow was 10,900

– 10,900/$4.95 per ounce = 2202 silver ounces to buy the Dow

Today silver is trading at $28.62, the Dow is 14,284.

14,284/28.62 = 499 ozs silver to buy the Dow.

2202/499 = 4.4

The Dow has gone up roughly, and only, 3400 points since January 2000.

Gold, during the same period, has gone from an average of $284 to $1570.90 ($1570.90/$284 = 5.5x) while silver has gone from an average of $4.95 to $28.62 ($28.62/$4.95 = 5.7x) per oz.

In January 2000 the gold/silver ratio was $284.32/$4.95 = 57.43

Today, as I calculate these numbers, gold is $1570.90 oz while silver is $28.62 oz for a gold/silver ratio of 54.88.

Silver, a.k.a. ‘poor man’s gold’ trades in lockstep with gold – from a ratio of 57.4 in 2000 to a ratio of 54.8 today some 13 years later who can argue?

Joe and Suzie on Gold’s Terms

Today’s home prices are lower than they were during the Great Depression and are approaching their all-time lows.

“At first, the drop in the dollar simply offset the apparent rise in home prices, and prices in gold worked sideways until 2006. But when home prices began to fall in dollar terms, and dollars were themselves falling in value, the double-whammy pushed true home prices down to levels not seen since the late 1980s. In fact, they set a new record, the lowest level since the index was first published. This means that most homes purchased in the last 20 years are now worth less than the original purchase price, even if they show gains of 100%, 200%, or more, in dollar terms.” pricedingold.com

The average U.S. worker earned $13.75 an hour in January of 2000. As we already know the price of an ounce of gold averaged $284.

The average worker would have had to work 20.65 hours ($284/$13.75) to buy an oz of gold in January, 2000.

Today the average U.S. workers wage is $19.77 and gold is $1570.90 oz – the average working Joe/Suzie would have to work 79.45 hours to buy an oz.

Consider:

• Global conflicts are intensifying and raising already considerable tension levels.
• Zero interest rates, global quantitative easing and escalating currency wars – an international race to worthless that ends with everyone a loser and leads to a rise in protectionism and future trade wars

After mulling over all that’s happening in the world today ask yourself “what chance does Joe and Suzie have of buying gold and silver cheaper in the future than now?”

Conclusion

Buying some gold and silver should be on everyone’s radar screens. Is it on your screen?

If not, maybe buying either, or both, should be.

Richard (Rick) Mills

rick@aheadoftheherd.com

Richard is the owner of Aheadoftheherd.com and invests in the junior resource/bio-tech sectors. His articles have been published on over 400 websites, including:

WallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette, VancouverSun, CBSnews, HuffingtonPost, Londonthenews, Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTReport, Vantagewire, Indiatimes, ninemsn, ibtimes and the Association of Mining Analysts.

If you’re interested in learning more about the junior resource and bio-med sectors, and quality individual company’s within these sectors, please come and visit us atwww.aheadoftheherd.com

***

Legal Notice / Disclaimer

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified.

Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

One way to rise above the day-to-day noise in markets and get the longer view right is to adopt an investment sage, somebody older, wiser and considerably richer due to their past good judgement. Many in the gold market turn to Jim Sinclair, adviser to the Hunt Brothers in the 70s and a veteran market trader of considerable net worth.

Now in his eight decade Mr. Sinclair publishes a website with a mission to explain what he knows to be the truth about the gold market. Sometimes it is difficult for the uninitiated to understand the language of traders but he tries to make the message as clear as possible. Here’s what he is saying now…

……read it all HERE

Another Jim Sinclair interview: 

Jim Sinclair – Paper Markets To Disappear As Gold War Rages

Today legendary trader Jim Sinclair predicted the paper markets would disappear as the gold war intensifies.  Sinclair also spoke with King World News about the “end game,” how various countries are positioning themselves, and how this will impact the gold market.  Below is what Sinclair, who has been actively trading the markets for over half a century and whose father was business partners with legendary trader Jesse Livermore, had to say about what is now taking place as the gold war continues to rage.

…..full interview HERE

As expected, gold prices have fallen back down after briefly spiking above $1,620 last week. Prices are now in the process of retesting the lows set in February near $1,560. 

As we wrote in this week’s Chart Of The Week feature, gold exchange-traded fund holdings have plummeted by more than 4 million troy ounces since the start of the year. In contrast, silver ETF holdings have risen by 23 million to stand near record highs.

GOLD YTD Chart

Likewise, silver is testing its recent lows near $28.50

SILVER YTD Chart

We maintain our view that prices will break down and ultimately test the important triple-bottom support areas of $1,525 and $26 for gold and silver, respectively.

GOLD 2-Year Chart

Silver 2-Year Chart

Both gold and silver should continue to move in the same direction they typically do. However, we note there has been a stark dichotomy in investor interest for the two metals.

…..read more of this extensive article HERE