US Dollar at Critical Support Level

US Dollar index closed at a very critical support level for the year 2010.

New High Price in Silver

Silver closed the year at a new 10-year high, and a new high price for the year 2010.

At the current pace Silver should reached $50 in the first quarter of 2011.

Vietnamese seek safety in gold as currency wobbles

HANOI, Vietnam (AP) -- Do Hai Ninh has been stashing away her meager earnings until finally saving enough to make a deposit. But the high school teacher isn't about to put her money into a Vietnamese bank with the value of the local currency steadily dropping. She's investing in a safer bet: gold.





Jewelry shops and black-market money changers have overflowed with customers in recent weeks, desperate to unload their Vietnamese dong for greenbacks or gold nuggets as the fast-growing Southeast Asian nation is buffeted by double-digit inflation and the near collapse of one of its largest state-owned companies.

But despite all the country's progress, high school teacher Ninh, 33, says she's sticking with something that never loses its luster.

"You can see that the dong is losing its value. Everyday, you go to the market and everything is getting more expensive," she said while exchanging 7.2 million dong ($360) for about 7.5 grams of gold at a bustling gold shop in Hanoi. "It's a safer place for my savings."

US$ Index at Critical Support Level

US Dollar Index is now at a critical support level. A clear break below has the potential for triggering a cascade of selling in the US Dollar, which would amplify the rally in Gold and Silver

Silver At Record High Price

Silver made a new high price on Thursday breaking above the previous high.

We Will Have Upside Explosion In Gold Price

With gold still consolidating gains, the Godfather of newsletter writers Richard Russell in his latest commentary posted at KWN Blog, stated, 

“I have posted (above) the year-end price of gold starting with the year 2000, the first up-year of one of the greatest and least appreciated bull markets in history. Take in this series, you may never see its like again.” 

“I've been around a long time, and I've studied many primary bull markets. And now I want to venture a few of my observations.

In markets, I have never seen a series like the above end with a whimper or a fizzle. The end or the wind-up of such a series usually arrives with an upside "explosion," as those who have failed to participate in the series finally rush in to join in the apparent endless advance. This is the wild and wooly speculative phase of a great bull market. Big bull markets don't end with a sigh, they end in exhaustion.

(1) Most great primary bull markets last longer and carry farther than the majority of investors (even the bulls) expect. 

(2) A great primary bull market is an expression of something changing in a very fundamental and meaningful way. Following a great bull market, the world is never quite the same. 

...Second note -- The Washington-based IMF recently completed its promised sale of gold. It was rumored that the IMF would have to sell its gold on the open market. Not so. The fact is that central banks eagerly gobbled up the IMF's gold. According to The Financial Times, the IMF sold its gold directly to the central banks of India -- 300 tonnes, Sri Lanka -- 10 tonnes, Bangladesh -- another 10 tonnes, and Mauritius -- two tonnes. 

And why are these central banks trading paper for gold? After all, it's the central banks that are creating the fiat paper. Why are they swapping their own beloved products for gold?

The latest anti-gold propaganda centers around the gold exchange traded funds. A full page article in Sunday's New York Times implied that only with the advent of all the gold ETFs has gold boomed. The article implies that the ETFs (mainly GLD) allowed an ignorant public to buy gold, and that this is the reason for gold's recent advances. The article did not explain why gold has risen yearly for almost a decade, even before gold ETFs were created. The Times article hinted that gold was in a bubble, and that it was a dangerous bubble. The article emphasized the 20-year gold bear market of 1980 to 1999.

...For the first time, more gold is being taken for investment than is used in jewelry. Asians have been gold buyers for years, while Americans have accumulated dollars and are just beginning to learn about gold. Meanwhile, the ignorant media continues to publish "beware" articles about gold. Soros announces that gold is the "biggest bubble" in the area of commodities, but the Soros largest holding is in gold. Sound as though Soros wants to knock the price of gold down so he can buy more on the cheap. 

These billionaire investors; they have no consciences. Hmm. maybe that's why they're billionaires.”

Crude Oil Weekly Chart

Crude Oil is in a breakout mode. First Target is $110 - $115, and Second target is $150.

GLD Weekly Chart

Gold ETF (GLD) weekly chart showing potential support zone of about $127.50, equivalent to about $1,275 for spot gold.

Silver Weekly Chart

Silver has met 2 of its breakout target. A break above Target No.2 implies a move up to Target No.3 which is currently at around $34.50 and climbing.

Current support for any pullback resides around $25 area and climbing.
Breakout support is at around $21

The United States Government is technically Bankrupt

According  to his latest interview by King World News, economist John Williams of ShadowStats said, and I quote, "The US government is Insolvent". "The 2010 Financial Report of the United States Government showed a GAAP-based 2010 deficit of $2.080 trillion, which widened from $1.254 trillion in 2009".


"Broader GAAP-based federal deficits, including the Social Security and Medicare unfunded liabilities, have been in the $4 trillion to $5 trillion range in 2008 and 2009, and 2010’s deficit again likely was near $5 trillion, remaining both uncontainable and unsustainable.  The federal government cannot cover such an annual shortfall by raising taxes, as there are not enough untaxed wages and salaries or corporate profits to do so". 


This is extremely bullish for commodities particularly for gold and silver prices, as the Federal Reserve will have to continuously print money out of thin air in order to buy the US government Treasury Bond, thereby debasing the US dollar, and would very likely lead to hyper-inflationary US$ currency collapse. When that happens, gold and silver price will go through the roof.

Silver

Silver is in consolidation but in a very strong up-trending mode.

Gold in Consolidation

Gold is currently consolidating its recent gain, down to its 50-moving average.

Silver 6-Month Historical Price Chart

Silver's spectacular price rise of over 55% just in the last five months may be just the beginning of an acceleration phase of this longterm bull market in silver that started in 2000. The best is yet to come as the world's silver shortage become more acute which would inevitably result in continual acceleration of price rise.

Silver 1-Year Historical Price Chart

Breaking out above its consolidation high of $21 in a very convincing manner suggest that the next upleg in silver price is already underway. Over a one-year period to date, silver registered an impressive 69% increase in price.

In a recent interview with Eric King of King World News, John Embry, Chief Investment Strategist for Sprott Asset Management out of Toronto, Canada, believes that the long awaited Commercial Failure in gold and silver may be at hand. If so, then look for silver and gold price to go ballistic.

In his most recent article in their December Investor's Digest, John Embry stated that "Gold, Silver could go ballistic by year-end"

Silver 5-Year Historical Chart

What an amazing run for silver, up 241% over the last five years. And what is even more amazing is the fact that silver has not even taken out its 1980 high of $50 per ounce.

Silver 10-Year Historical Chart

From it's 2001 price low silver has rallied an impressive 536% to date, see the chart below.

Silver 37-Year Historical Chart

Silver's 1980 all-time price high was $49.45. At its current price level, silver is clearly undervalued.

Gold 6-Month Historical Chart

Since its July price low of $1158 per ounce, gold price has rallied over 20%.

Gold 1-Year Historical Chart

As the following 1-year chart shows, gold has rallied over 24%.

Gold 5-Year Historical Chart

Over a 5-year period, gold has rallied over 174%.

Gold 10-Year Historical Price Chart

A spectacular 410% rally in gold price in the last 10 years. More is yet to come. As global economic collapse enters its second and a move devastating phase, I am looking for gold price to start going into acceleration move to the upside.

Long-Term Gold Historical Price Chart

From its price low in 1973, gold has mounted a more than spectacular rally registering a price increase of over 2032% to date. It is my opinion that the bulk of this rally is yet to come.