Some people only ever say BUY gold and God help you if you say SELL! They justify their one-sidedness saying if gold ever does down, it is a conspiracy and it must always go up every day. There is no such market that acts in that manner. There are legitimate reasons to buy physical gold – they just ain’t what the Goldbugs say they are!

The Truth About Gold & Why You Should Buy It

Some people only ever say BUY gold and God help you if you say SELL! Even the pro-Gold radio shows will bar you if you do not agree with them. Guess Mainstream applies to them in reverse! The pro-Gold radio shows are just as biased and prejudiced as they say everyone else is against gold, but in reverse. They just don’t get it! This is NOT a religion. This is trying to survive an economic meltdown. You have to be careful not to lose during the short-term battle if you ever hope to make it through the war! Sometimes it is best to SELL and then buy back more when the correction is over. Yet they justify their one-sidedness saying if gold ever does down, it is a conspiracy for it is the exception to everything and must always go up each and every day. There is no such market that acts in the manner they wish to portray as normal. There are legitimate reasons to buy physical gold – they just ain’t what the Goldbugs say they are!

Ed Note: This is a very long and detailed article with lots of charts & graphs which you can read in full HERE. In the meantime here is Martin’s conclusion:

So Don’t Worry – Be Happy. Gold is not going up because of all the conspiracy claims nor because the real gold will conquer the paper gold. This is all about reality. Gold standards do not work because you cannot fix the price of money regardless what you call it. To try to do so is communism where the real attempt was to eliminate cycles. Gold is a viable part of the portfolio. It will rise to the occasion when the timing is right. The very people accused of keeping it down are the very people who will turn around and send it up as well. This is just about time. Nothing more! When the time is right and people realize that the Governments have no Clothes, look out – there will be a stampede at that time. For now, that still appears headed into 2017.

via Martin Armstrong @ Armstrong Economics

Egypt’s second richest man Naguib Sawiris has made a $500 million bid for the Canadian gold mining group Mancha Resources, the most spectacular move yet into the yellow metal by an Arabian businessman.

Mr Sawris confirmed to The National newspaper that talks are in progress but declined further comment, except to say La Mancha has a ‘geographically diverse portfolio of assets offering exposure to growth.’

Golden assets

La Mancha operates four gold mines in Africa and Australia. Mr Sawris and his even richer brother have amassed a multi-billion dollar fortune as the founders of Orascom Telecom and have major investments in cement, construction, fertilizers and hotels.

They have made a great deal of money by being early investors in sectors before their future value became apparent. But gold mines are a completely new field for Mr Sawris and mark a major diversification away from his past successes.

Naguib Sawiris is worth $3.1 billion and his brother Nassef $5.1 billion, according to Forbes magazine. They could well be readers of the ArabianMoney investment newsletter which has been advising such a diversification strategy for some time (subscribe here).

It certainly does not say much for the global economic outlook that a man of such wealth is turning to the yellow metal as an investor rather than redeploying money into telecommunications, for example, where he has previously done so well.

Investment logic

But if you think the global economy is going to contract and the central banks print money to try to offset that deflation then it makes a great deal of sense to invest in precious metals. The price of these assets along with food, certain commodities like oil and even real estate are likely beneficiaries of central bank money printing even while the rest of the economy struggles at best with stagnation.

In this environment taking wealth out of the stagnant sector and putting it into an asset class that will benefit from reflation is a clever one. By buying a gold company Mr Sawris is also taking a bet that the highly depressed market for gold equities will outperform the metal itself as the price of gold goes up.

That is the theory, although it has not worked for the past few years. Arguably, however, that leaves gold mining shares cheap and even more attractive to bold investors like Mr Sawris. Perhaps his move is bold enough to spark a revaluation of the sector.

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(scroll down for post close comments). FVOI stands for Futures Volume and Open Interest. It is computed like On Balance Volume with the only difference being that open interest (the number of open gold futures contracts) is added into the calculation. FVOI (the red line) is a great tool to tell if the price of gold has gotten ahead of itself or if there is latent strength during gold declines. As you can see in the weekly chart above, FVOI normally tracks very well with gold. It is during times of divergence that the real value of the FVOI is found.

The current divergence is continuing to show that there is positive action going on with regard to the accumulation of gold futures contracts as the FVOI remains just below its recent high while the price of gold tries to rebound off of its early June low. While gold has been chopping around in seemingly directionless trade, the FVOI is still in a tight range just below its high. This is still a bullish configuration that tells us that gold contracts are being accumulated here. Once this accumulation phase is completed, we expect gold prices to move sharply higher. 

Also from Mark Leibovit’s VR Gold Letter’s extensive Gold News Raw:

Gold will climb 22% to a record by yearend as the global economy slows from the weight of too much debt, says Eric Sprott, the founder and chairman of Canadian fund manager Sprott Inc. (SII)

“I just can’t imagine the demand for gold is going down,” he said in a July 9 interview at Bloomberg’s Toronto office. “I don’t personally see a solution to the problem that we’re in, the financial leveraging issue that we all have where everybody wants to shed debt and there’s no buyers.”

All the above comes from Mark’s 24 page VR Gold Letter which you can read more about HERE

Post Close Comments

Ed Note: As you know Mark Leibovit is one of Michael Campbell’s favorite analysts and here’s a good reason why. I get all of Mark’s services, and one thing stood out glaringly in his VR Trader Platinum service. Of the 31 recommended stocks that Mark has liquidated since June 4th/2012 81% of them were closed at a profit. The 6 that were closed at a loss, the losses were very smalll, specifically -.12 cents, -8 cents, -7 cents, -.30 cents , – 2 cents and a “big” -$1.25 on a $39 stock. Moreover of the 8 stocks Mark is currently long, only one is showing a loss at today’s close of – 6 cents. 

Now for Mark’s closing commens for today:

The stock market is trading modestly lower after retail sales disappointed and following reports that Democrats will let the US go over the “fiscal cliff” if Republicans refuse to raise taxes on the wealthy. But the market is being supported by a better than expected manufacturing survey and hopes for Fed stimulus. The Dow is down 32, S&P down 2, and NASDAQ down 4.

Financials are steady (XLF -0.1%) after Citigroup (C +1.2%) reported better than expected earnings.

Industrials are the biggest losers (XLI -0.7%) after General Electric (GE -1.1%) was downgraded by Morgan Stanley.

Natural resource stocks are also weak (XLB -0.6% and XLE unchanged) as the weak economic data hurt commodity demand.

Treasuries rallied to record highs after the disappointing retail sales report. The long bond future is up 1 2/32 to 152 8/3

The US Dollar Index is trading lower after the US’s disappointing economic data and the possibility of new stimulus from the Fed. The US Dollar Index is down 0.198 to 83.151.

The European Central Bank wants to impose losses on owners of Spanish debt even though finance ministers agreed not to do so.

The Euro is up 0.13% against the Dollar.

Precious metals are getting support from a flight to safety, but industrial metals are down on those demand concerns. Gold is up 4.30 to 1593.70 and silver is up 0.03 to 27.37, but platinum is down 12 to 1416, palladium is down 6 to 578, and copper is down 0.0165 to 3.4875.

Oil is getting support from continued unrest in Syria and its political implications. Crude oil is up 0.36 to 87.46.

Retail sales fell 0.5% in June, well below forecasts for a 0.2% increase. It was the third consecutive decline in sales, the first time that has occurred since 2008.

The Empire State manufacturing index rose from 2.3 to 7.4 in July. Economists expected a smaller rebound to 5.0.

The International Monetary Fund reduced its forecast for global GDP growth by 0.1% this year and 0.2% next year. The IMF now expected GDP to expand 3.5% in 2012 and 3.9% in 2013.

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CANADIAN NEWS:

The Canadian market is down modestly, just like the US market. The TSX is down 8 or less than 0.1% and the TSX Venture is down 5 or 0.4%.

The Canadian Dollar is down slightly as traders move to safer currencies. FXC is down 0.12 to 97.88.

 

DISCLAIMER

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This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of VRTrader.com may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. VRTrader.com staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control.

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