by Thomas Chaize

Since the ounce of gold has passed the $ 300 I wrote 26 subjects on its price.  I had 100% success, so I hope that if will be the 27th.  I keep here only the technical analysis of the price of one ounce of gold;  I will explain the fundamentals of gold in my 2009 report about world production of gold.

The record price for one ounce of gold to 1005 dollars.

The ounce of gold rose to $ 1005 in March 2008 to establish its record, and then a decline has occurred to 692 dollars in October 2008. The gold price  has again risen to 989 dollars in February 2009, to a level close to its previous record.

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At what level the price of the ounce is there correct?

Thanks to Fibonacci retracements (indicators), we isolated four possible downside:

38.2% retracement i.e drop to 876 dollars.
50% retracement i.e drop to 841 dollars.
62.8% retracement i.e a drop to 803 dollars.
100% retracement i.e a drop to 692 dollars.
You have noted that ounce of gold is already at its 38.2% retracement to 876 dollars one ounce.

The retracement of 50% is the 1st Summit of 1980 to 843 dollars one ounce and that of 100% in the second summit of 1980 to 697 dollars one ounce, it forms a sort of channel of purchase.

If you are looking for an entry point to the gold, you have it between 876 and 692 dollars the ounce. Ideally you can find it at the bottom of the horizontal channel of the 1980s, between 843 and 692 dollars.

The next record gold prices.

After the correction of an ounce gold price is complete, it will rise beyond its previous record to reach area to 1300 dollars per ounce simply by a pendulum effect.

The road map is as follows: we buy between 876 and 692 dollars in the area of the old peaks of 1980 during the current decline then to cover 1300 dollars. The summit of 1980 to 843 dollars, adjusted for very optimistic “official”  inflation, gives us 2 158 dollars to be truly at the same level as 1980.

“Inflation is like toothpaste: once out of the tube, it is impossible to return them.“  Otto Pöhl

Buy Gold and Silver Coins

The world’s mints are coining it as unprecedented numbers of savers search for safer investments

By Sarah Marsh in Vienna and Jan Harvey in London

LEONARD FOEGER/REUTERS

The Austrian Mint is producing more Philharmonic gold coins in a week than it normally does in a month

by Howard Katz

You have probably been taught that the responsible way to handle your economic affairs was to work hard, be thrifty and invest safely. This is what the old timers did, and it worked for them. When they reached 65, they were able to retire

However, the old timers lived in a country on the gold standard. They went to work at age 16, saved 15% of their income each year and put it in the local savings bank at 5% interest per year.  Let us do a little 8th grade math.

Assume an average wage of 30 oz. of gold per year. Saving 15% of that means saving 4½ oz. per year.  At the end of a 49-year working lifetime, you have saved 220½ oz. of gold.

Now listen closely because what happens next is so astonishing that it was called a miracle: the miracle of compound interest. When you lend money at interest, in the first year you get the agreed upon rate. If you lend $100 at 5%, you get $5.00.  It is in the second year, that the miracle starts. In the second year, you don’t merely get another $5.00.  In the second year, you are not lending $100; rather you are lending $105, and at 5% this produces an interest of $5.25.; so at the end of the 2nd year you have $110.25.  This is interesting.  Not only is your capital growing; it is growing at an increasing rate.

Now to calculate what 5% interest does to your capital over a 49-year working life span is a long, difficult problem in 8th grade math. But I was a bad boy one day and had to stay after school, and so I calculated what 5% interest does to capital over a 49-year period. The answer, to cut to the point, is that it multiplies it by 4.25.  So, the man who saves 220½ oz. of gold will, after 49 years at interest at 5%, have 220.5 x 4.25 = 937 oz. of gold.  That is, you saved 220½, but you have 937. This so impressed the people of the 19th century that they called it the miracle of compound interest.

So here you are at age 65 with 937 ounces of gold in the savings bank.  You can stop working, continue to draw interest on your capital, and you will receive 5% x 937 oz. = just shy of 48 oz. of gold per year.  In other words, you can stop working and receive 50% greater salary than you did when you worked.

This was a wonderful system.  It no longer exists, but it is very important if you want to know what to do with your wealth today and how to survive in the modern economic climate.  To read the full article, click here…

Silver Dollar Coin Values

by David Morgan

Last week I updated our readers about a video shot at the Orlando Money Show. This week I have two videos where we discuss the ups and downs of the silver market and how silver differs from gold as an investment.

Gold gets most of the press and silver always seems to be in second place, and it will probably stay that way until we get to the blow-off phase of this precious metals bull market. During the panic buying phase or mania that accompany the blow-off phase, gold will be outside the price range of many people. Anyone seeking any protection from the destruction of the U.S. dollar will buy whatever they can, and that is silver.

Silver is far more volatile than gold but, in my studied view, has far more potential than gold.  As I see it, both metals should be owned, although silver can give you one heck of a ride, as most silver investors are well aware.  We also discuss new applications for silver in laptop computers and in the health industry.

Later we discuss the gold market and how gold is holding up better than other asset classes and actually was making new highs in some currencies, although it did fall back, in U.S. dollar terms. This was just a few months ago, when a huge demand for U.S. dollars surfaced as a result of the credit crisis.

As the host points out, eventually the chickens will come home to roost, and with all the money flooding the system it is only a question of time before this “new” money hits the system and manifests into more inflation.

My view is a bit reserved and those who follow my work carefully know I am actually looking beyond the inflation/deflation question to the question of a currency destruction.

However, that is getting a bit ahead of the story. For the time being, you can watch this video and learn why it might take a bit longer to see all this bailout money boost the gold price to the next level.

I want to be cautious here, because both of these metals can take off to the upside at any point, and making a short-term call is difficult at best. Longer term, most of the gold community are not in agreement with the policies set forth by the major nation states of the world and see the metals are going far higher.

It is an honor to be.

Sincerely,

David Morgan

www.silver-investor.com
March 20, 2009

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Mr. Morgan has followed the silver market daily for more than thirty years. Much of his Web site, www.silver-investor.com, is devoted to education about the precious metals. To receive full access to The Morgan Report click the hyperlink.

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