How is gold doing?

So I am quite aware that you are concerned about the washout in the gold price this week. Everyone has an opinion concerning this. Lets listen to the opinion & words from a professional gold & futures trader about what this “washout” in the gold price might predicate.
David,

“…What happened in the Globex night session was very significant to GOLD. Taking a look at the monthly long term chart the trend line comes in at $375 vs. the June contract. We traded as low as $377 in the night session WHICH WAS A BUY SIGNAL TO ME given the failure to break the trend and that the volume was the highest I've ever seen it in the Globex lending support to the trend line.”

“The funds have been liquidating with a vengeance and I believe last nights action was a wash-out. FUNDS ALWAYS SELL THE LOWS AND BUY THE HIGHS…”

“ALL ARE BULLISH SIGNS TO ME.”

“With gold vs. June about to close up on the day above $386 I feel that today's action puts the bottom in. Reinforcing this is that the Dollar index is experiencing a reversal today, failing at the 200 day moving average. The key will be consecutive closes for gold above its' 200 day moving at $392.50 vs. June. Revised GDP today shows a much higher than expected rise in INFLATION sending interest rates higher.”

“WE HEARD THESE SAME THINGS IN THE LATE SEVENTIES AND GOLD WENT TO THE MOON.”

“…I'm LONG TERM BULLISH and expect a $450-$500 price late this year if not sooner especially if we're unlucky enough to have a terrorist attack here sometime before the election like in Spain. We've had a very important day today…”EP

Gold is a natural resource that can only become more valuable over time because Mother Nature just isn’t making any more of the stuff. It amazes me that the masses still have not awaken to gold, the other precious & base metals & the natural resource sector stocks in general.

“Wealth is the foundation on which our standard of living is built. Produced wealth (like buildings and factories) and natural wealth (like forests and minerals) are the mortar and stone of this foundation.”

Probably it would be a good idea to first define what a “natural resource” is since this investment class seems so obviously ignored & overlooked. When we talk about natural resource stocks just what are we referring to?

“Definitions of Natural resources…”

“Materials that occur in nature and are essential or useful to humans…”

And a following general definition.

“…resources produced by the earth's natural processes.”

The following text below is my favorite definition & the one key element that provides the answer as to why over time “natural resource” stocks become a “no brainer.”

“Nonrenewable resources: resources that cannot be replaced once they have been used.”

For those of you that may be slow lets repeat part of the text above so that we may successfully understand why the long term prospects for resource stocks is excellent.

“…RESOURCES THAT CANNOT BE REPLACED ONCE THEY HAVE BEEN USED.”

Gold, silver, diamonds, copper, nickel, oil, & many others – these are resources that the earth took millions of years to produce & mankind cannot re-produce these natural resources once they are gone. When they are gone & used up that’s it!
All the azaleas have been blooming here in the Deep South.

Our spring here begins probably unofficially in March & by the middle of April our world & landscape is awash with fresh green & beautiful flowers & blossoms everywhere. I always have a tinge of sadness for my northern brothers at this time because I know their trees are still barren of new leaves.

I believe the azaleas must represent every color in the rainbow & my only regret is that these exquisite & picturesque flowers have to eventually shed their colors. But spring will come again but not so with natural resources.

Now let’s ask ourselves if the earth today really is quickly losing its natural resources we mentioned earlier?

“According to one recent study, THE EARTH LOST NEARLY ONE-THIRD OF ITS AVAILABLE NATURAL WEALTH BETWEEN 1970 & 1995 as a result of human activity, more than in any other period in history.” Resource Wars, Michael T. Klare, 2002
Alan Greenspan also understands the fact that our natural resources are being used up. Listen to the following comments he has to say about one of our most important natural resources, oil & gas.

“GREENSPAN: HIGH OIL PRICES HERE TO STAY”

WASHINGTON (Reuters) The Fed chief said the "dramatic rise" in oil and natural gas futures prices in recent years carried the potential to "significantly affect the long-term path of the U.S. economy."

“…THE FED CHIEF SAID THE "DRAMATIC RISE" IN OIL & NATURAL GAS PRICES IN RECENT YEARS SUGGESTED SUCH ELEVATED PRICES WOULD PROVE TO BE THE NORM.”

As you digest the fact that the earth’s natural resources (which cannot be replaced) are beginning to seriously be used up then you can begin to understand why the power of “supply & demand” is only going to make natural resources as an investment class do very well over time.

But let’s change the subject & attempt to get caught up in the up coming Presidential Campaign. Presidential campaigns always bring a great deal of humor.

Remember during the Clinton Era when we heard the term “Co Presidency” being used? The Democrats taught us that in today’s politics that when we elect a president we are also getting their spouse (ex: Hillary) as part of the team.

Well, this term & thought process was coined & invented by the Democrats & have the rules of the game changed since then?

”TERESA FIGHTS TO KEEP HER TAX RETURNS PRIVATE”

”Democratic presidential candidate John Kerry, who has called for full-disclosure of rivals' tax returns, now faces growing pressure to release his wife's records.”

”But in a Tax Day controversy, Teresa Heinz Kerry is personally determined to keep her returns out of public view -- at any cost!”

"THIS IS MY LIFE, MY BUSINESS…"

Wow! What a hypocrite!

John Kerry wants the nation to elect himself as president and his wife as co-president but we are not going to know where the future co-presidents 500 million net worth’s money is spent? Yes, Kerry wants us to elect him & his wife to occupy the White House while his wife sits on half a billion in hidden investments that may pose a conflict to their presidential interests?

And not only is John Kerry intent on keeping his wife’s money & financial interests hidden from the public but John has also redefined how we think of the American Family.

Read the following for a good laugh.

“Does John Kerry, who supports higher automobile fuel economy standards, own a gas-guzzling SUV? He does, but says it belongs to the family, not to him.”

“He said his wife owns the Chevrolet SUV.”

“The family has it. I don’t have it,” he said.” Guardian Unlimited, Associated Press, 4-23-2004

Oh, I understand. The future co-president & family owns the SUV, but not John Kerry the dad & husband. Anyway, looks like we are in for quite a humorous presidential campaign this fall.

Oh, here is one more interesting tidbit about John.

WASHINGTON - Teresa Heinz Kerry says she's pro-choice but believes abortion is "stopping the process of life," it was reported yesterday.

"I don't view abortion as just a nothing,”

Well, this is good to know. Our possible future co-president admits that life begins in the womb but still believes "stopping the process of life," is OK.

Enough politics! Let’s get back to the subject of natural resources & gold!

“GOLD PRICES FORECAST TO KEEP RISING, REUTERS, 4-16-2004

“Gold Fields Minerals Services (GFMS) said in its 2004 gold survey that $450 an ounce was seen as a good possibility for gold…”

Well, if John Kerry does become our next president at least we can count on the man having good grooming habits. Read the following.

“On the Friday before his MEET THE PRESS appearance, Dem presidential hopeful John Kerry flew his Washington, DC hairdresser to Pittsburgh for a touch-up, the DRUDGE REPORT has learned.”

Praise the good Lord above! I had stayed up the night before this press appearance worried that John’s hair would not be appropriately styled! Editor

”Cristophe stylist Isabelle Goetz, who handles Kerry's hair issues, made the trek to Pittsburgh, campaign sources reveal.”

"Her entire schedule had to be rearranged," a top source explains.”

“THE TOTAL EXPENSE FOR THE HAIR TOUCH-UP IS ESTIMATED TO BE MORE THAN $1,000…”

Only 1,000 dollars for a hair cut?

I am so happy to know that “John” is just like us, “one of the little people.” I’ll bet that readers to this commentary pay 1,000 dollars & more for a hair cut all the time, huh? Editor

“One source suggests the hairdresser was flown to Pittsburgh on Teresa Heinz Kerry's 'Flying Squirrel', a Gulfstream V private jet.”

[The 'Flying Squirrel' is worth about $35 million. A deluxe model; plasma TV, two bathrooms, fancy mahogany and burlwood paneling, gold-plated fixtures.]” Matt Drudge, DRUDGE REPORT, 4-27-2004

Yes, this is the same Teresa Heinz that wants to be our next “co-president” but only on the condition that her personal finances are NEVER revealed to the public.

"THIS IS MY LIFE, MY BUSINESS…" - Teresa Heinz

Hey!

Let’s get back to John & Teresa’s personal 35 million dollar jet!!! Only 2 bathrooms & the plumbing fixtures are only gold plated? I knew these folks had a touch of the common class about them.

Like I said in the beginning. This upcoming fall presidential campaign should be lots of fun.
And back to the specific discussion of natural resources let’s consider more substantial facts about where the natural resource market is heading.

“…it is evident that the world supply of certain key resources is being diminished at a rapid pace - in some cases, exceeding the world’s capacity to exploit new sources…” Resource Wars, Michael T. Klare, 2002

But enough said.

I think it is pretty much common sense to understand now why the natural resource stocks (including gold) are the best long term investments for the immediate future.
Before we leave I know there are those that are concerned with gold’s price fluctuations this past week. But again let’s think long term & where future events are carrying us. Read the following below.

“One of the most senior figures in the al Qa'eda terror group has pledged that 2004 will be a year of attacks on America.”

“The tape also warns that that Saudi Arabian rulers will be unable to prevent further attacks.”

"The Jews, the Americans and crusaders in general will remain the targets of our coming attacks and this year, God willing, will be fiercer and harsher for them"

"We warn Muslims to stay away from Americans and their civilian and military sites so that they will not be harmed when the infidels are targeted." London Evening Standard, 4-27-2004

And you seriously want to even contemplate that gold’s future important financial role is in any way going to diminish over the next few years? Think again my friend.
Oh!

Before we go think about the fact that the largest & most prestigious precious metals Internet Web Site, Kitco, has just started a new web site to cover many of these other important natural resource stocks: principally “base metals.”

Why?

Because Kitco recognizes the long term role & rising value that ALL natural resource stocks will play in the coming years & on into the 21st century.

“There are rules of money that the rich play by, & there are the rules that the other 95% of the population plays by,”

“The moment you see one opportunity, you will see them for the rest of your life.” Rich Dad/Poor Dad, Richard T. Kiyosaki & Sharon L. Lechter, C.P.A.

And what we just read explains why there are far more poor folks & middle class than the wealthy rich. And I suppose the question you have to ask yourself now is the following. Are you going to continue to play by these same rules as the masses & the other 95%?

Or are you capable of seeing opportunities where others see nothing?
And concerning fluctuations in the market that causes you to lose your dinner remember the following.

Nathan Rothschild once said concerning the most successful investing practice:

"THE TIME TO BUY IS WHEN BLOOD IS RUNNING IN THE STREETS."

Maybe if you think gold & the natural resource stocks are presently bleeding then now just may be the time to consider the resource stocks as an excellent long term value.
At GLA, we guarantee the best deal for a subscription-based financial newsletter anywhere. $149 for a lifetime subscription. If you can beat that anywhere else, then let us know. And Gold Letter covers in addition to the precious metals other contrarian plays including Asia & China.

Gold presently may be on the back seat but oil is definitely hot & receiving serious attention.

And right now as gold simmers & consolidates we are reviewing an oil exploration company that if successful in its current drilling has the potential to turn 1,500 into close to 40,000 dollars. Keep in mind that this is a highly speculative issue & only risk capital you can afford to lose should be used.

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David N. Vaughn
Gold Letter, Inc.

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