More of the Same Ahead for Gold

Gold and silver both continued slipping this morning, as inflation concerns ease. Oil too has softened in light of good potential for supply increases in coming months. With less emotional turmoil over the economy at the moment, encouraged by solid retail sales in the early days of Christmas shopping, the perceived need for gold as a hedge against inflation is evaporating slightly and profit taking will continue so long as these feelings and influences dominate investors and fund managers thoughts.

This can be seen most clearly in the futures market for precious metals, with February gold down about $15. Fund profit taking also seems to be set to continue heavily throughout this Fridays trading.

In India, where gold was a very hot commodity in the last half of 2007, demand has eased and investors attentions seem to have moved towards the stock market. Trading is getting very active and stock indexes are driving upwards at a sharp rate.

Though dollar confidence remains on the incline, much world sentiment is squared off against the U.S and it's currency. Keep this and other economic information in mind when making investment decisions. Investors with an eye for the long term always try to keep a balanced portfolio, which will certainly include some form of stabilizing commodities interests.

Tom's Recommended Film of the Week

Catch A Fire

Focus Features presents some of the best little films you'll ever want to see. Sometimes they are sort of hidden amongst the big blockbusters, but it's worth seeking them out. This is certainly the case with Catch A Fire, directed by Phillip Noyce and written by Shawn Slovo.

Catch A Fire gives us a glimpse of both sides of the apartheid era in South Africa. As a film, it offers up many questions. Is there a difference between terrorist and revolutionary, or is it just a matter of perspective? How can we preserve and protect ourselves, our families and our rights and civil liberties? Is action better than inaction?

In Catch A Fire we see viewpoints and approaches to these questions from both sides of the conflict, mainly through actors Tim Robbins and Derek Luke. The dichotomy of aggression and passivity between characters and the seemingly random destructive, uplifting and demeaning results these actions produce, raise this film to a higher level. Action, tension, misunderstanding, fear, power, love and determination all flash at the viewer, making Catch A Fire exciting, entertaining and thought provoking.

Gold Slips Below $800

Profit taking this morning have pushed gold back below the $800 mark. With the Dollar gaining strength after 2007's 10% drop against the Euro, predictions for next year seem to be leaning towards a sizeable downward correction in the spot price of gold. This is a change from just a few days ago, when economists were calling for a stable average gold price of $800 through 2008.

Seems that this time around gold has held a very solid ceiling at the $850 level. This reminds me very much of the last super bull market back in 1979-1980.

Other factors such as falling home prices, rising unemployment and oil supply problems may yet have an effect, but for now, gold seems to have capped.

Black Friday a Big Success, Gold Above $825

Post Thanksgiving weekend shoppers dumped a load of cash into the economy. Sales were up more than 7% over last years Black Friday and Saturday combined sales, with the number of shoppers up and the per shopper amounts spent actually down. Purchasing was heavily skewed towards electronics and related items, benefiting Best Buy and Wal-Mart who offered good deals in these areas. We'll see how Amazon does today as Cyber Monday unfolds.

Gold and other precious metals also surged in the post Thanksgiving euphoria, with Gold topping $820 on Friday. This morning Gold is holding very solid above the $825 mark as of this posting, with demand for the world’s favorite precious metal quite strong in the Middle East.