Gold Once Again Being Considered Key Safe Haven Asset

It can be confusing for some not familiar with what gold is and represents, when trying to figure out if it's simply one of many commodities. For those thinking it's primarily a commodity, at this time, because most commodities considered bearish, they will consider it a depressed asset that isn't worth owning.

For gold investors who understand what gold really is, they've been baffled because the price of gold, under the economic conditions of the last several years, should have soared. My belief is the reason it hasn't is because it has been classified wrong, and that has caused the price to be suppressed.

Why gold hasn't suffered a total breakdown is because there is a significant number of people understanding it has been a form of currency for thousands of years, and to this day can be used as such.

With the global economy getting more volatile, the commodity classification of gold is slowly eroding, and it's once again being considered the safe haven it always had been. That will have strong implications as the potential for significant events grow, in which investors will flee for safety. Gold will be there waiting for them.

Impetus for gold

One thing about gold is it takes difficult times to remind the majority of investors of its store of value. When the economy is doing well, it is for the most part forgotten by the majority and lingers in the background until global events once again trigger the memory of the important role gold plays in the world.

There was a reason the price of gold soared during the last market and economic meltdown, and it appears we're closing in on the early stages of the next recession, largely because of slowing China and its Asian neighbors.

The key metrics to watch in relationship to gold price movements are volatility and fear. They work together, and one builds on the other to produce the most optimal conditions for gold; a trend that is growing at this time.

Gold has to be nudged by events to appeal to investors, and those types of events are increasing around the world.

What type of fear and volatility?

It's also important to understand there is a certain type of fear and volatility that supports gold. While I think it's not the best way to think of gold, the main driver is financial fear, not political fear.

The reason for that is the market, overall, reacts to what is happening in the moment, and the the long-term view of the consequences of specific political events isn't priced in immediately, or sometimes not understood or digested as to the potential financial consequences. One of the most recent is the tensions between Russia and Ukraine, and Russia's support of Syria in the Middle East.

Where the two can converge of course is when political events visibly affect finances. But for the most part, it's almost always financial fears alone that result in people running to gold and the price being pushed up. That is the stage being set up now, and at least part of the reason asserted by the Federal Reserve as to why it didn't raise interest rates.

On the investment side, until there is short-term pain, meaning consistent weak quarterly results, the price of gold, in general, will remain subdued. It's when the negative financial news is coupled with earnings consequences that gold will once again soar.

The reason for that is the majority of investors will only respond when they believe their capital is under siege; meaning only when events affect their money.

We can read about China and other weak Asian countries all we want. We can read about or listen to news reports about Russia and how it may respond to Western resistance to its policies. But until that is connected to the stock market in the minds of investors, it doesn't have a lot of support for gold.

This is one of the reasons those that closely watch the potential impact of political events on the economy can get frustrated with their gold investments, as they make the connection much quicker than the general investing community, and get in much earlier and have to wait for the market to come to them.

Making the connection between political and economic events

Earlier I mentioned gold being classified wrong. The reason for that is the lack of correlation between political and financial events at this time. Once gold is reclassified in the minds of investors - from a commodity to a currency - that will be a bullish trigger.

There are a growing number of news reports on the slowing Chinese economy, weakening manufacturing in the U.S., and the growing human migration problems in Europe and America. These have potential for tremendous financial upheaval, and in fact there are some ramifications already causing economic tremors, with the most obvious at this time being China, which has for so long been touted as the main driver of global economic growth.

Even now investors have been slow to see how it will impact the U.S. and other markets, because they still haven't made the connection financially. That's because while there are economic concerns growing, the latest earnings reports appear to be fairly strong, even as the macro-economic situation is looking weaker. 

Gold as money

When referring to gold as money, the idea isn't that people necessarily use it as a means of exchange of goods or services. That can and does happen in some parts of the world, but in general, that's not how business is conducted.

What I mean is gold is considered money in the sense of is being used to protect assets. After all, if it wasn't considered a form of currency, why do people always rush to hold gold when difficult and unpredictable times come about?

Remember what happened a short time ago when the stock market in China crashed, and the crazy responses by China's leaders to it. Right in their faces was the reality China's market was highly overvalued, and it wasn't reflective of its economy. In response to that, the price of gold made a quick move upward, once again confirming it's considered a safe haven asset investors in order to protect their capital. That's money, no matter how it may be spun.

Conclusion

For now a lot of people are in cash. Part of that is for safety, and a lot of it is for the purpose of waiting for opportunities to come to them.

When the next economic downturn comes, which as I mentioned, is probably in its early stages, the thought of bottom-feeding will change to capital preservation and growth, and under crises situations, very few assets perform like gold does, and that's why being positioned for a prolonged season of economic difficulties with some of our assets is a smart play.

Discipline is important under these circumstances. If you believe we are going to enter into a season of economic weakness, going long gold is a sure winner. I've been long gold and silver for some time, and I know I'll be rewarded significantly over time.

As for what to look for, historically the larger miners with significant gold exposure are the first to move, followed by juniors and then explorers. Juniors are my favorite play because they have proven reserves and have the most upside potential. You have to do your homework of course, but for the strongest upward potential, juniors will strong management in place will make you more money.

On the other hand, if safety is the major factor, the larger miners can preserve and grow your capital when the rest of the market is floundering.

The catalyst will be when investors make the connection between political events and the economy. Discovery of that will be the sustainable upward movement in the price of gold. The decision to get in on that should be what your outlook is in regard to economic conditions and how long it'll take for investors to recognize the risks that are quickly approaching.

Investing in gold shouldn't be considered a short-term play, traders need to go long and hold on during these times of volatility. I don't think we're quite there yet with investors sentiment in regard to fear, and until that escalates, there will continue to be up and down movements.

And while the Fed and interest rates, in my opinion, has already been priced in, the ongoing sport of reporting on and guessing as to whether or not the Fed will increase interest rates will continue, and that means having the stomach to endure volatility in the gold price.

Even if the Fed eventually increases interest rates, it's not going to be by much. And with the many potential triggers that could bring more fear to the market increasing in the world, I don't think there should be a fear of overt interest rate intrusion.

As events unfold and the realization the global economy is slowing sinks in, nothing will be able to hold back money flowing to gold, and that means much higher gold prices. Position yourself accordingly.

Gold About to Rally Big Time?

It looks like a lot of negative catalysts are coming together to provide the foundation for a major gold rally.

Emerging markets are in disarray, as are developed markets like Japan. Asia as a whole is under enormous pressure, and the latest Empire State Manufacturing report revealed U.S. manufacturing is slowing down as well, partly from the strength of the U.S. dollar.

With a currency war going on in Asia, as countries compete to boost exports, it's difficult to see how American exports can gain any traction.

Media stocks have also been taking a pounding, based primarily upon Disney's (DIS) ESPN losing a "moderate" amount of subscribers. That most likely points to a period of even more disruption, which many investors have been monitoring since the growth of the streaming video market.

Many retailers have also underperformed, especially those with a presence in malls; although Wal-Mart (WMT) has been getting crunched as well.

Add to that the underemployment in the U.S. and dubious employment numbers, and you have the makings of another perfect storm that could push the price of gold above the $2,000 an ounce market - possibly much higher, depending on how the parts of the whole hold up.

Gold and silver could be poised for a major move. I don't see how this weak economy can hide the devastating impact of endless quantitative easing, or how GDP can continue to improve when major trading partners are under economic siege.

I don't think this time around the strength of the U.S. dollar will be able to hold back the upward move once it takes hold. We could even see measures taken - possibly in the form of more quantitative easing (to hide the fact the Fed is once again entering the currency wars) - to lower the value of the dollar against competing currencies.

Either way, gold is beckoning, and it's a matter of when, not if, it starts to soar once again. I'm positioned for it in my portfolio. Are you?

Goldman (GS) Getting Frisky on Economic Growth

Goldman Sachs (NYSE:GS) is getting even more bullish than they have on the U.S. economy, increasing its economic growth projections for 2011 and 2012 from 3.4 percent to 3.5 to 4 percent. This year they peg it at 5 percent GDP growth.

Jan Hatzius, Goldman Sachs' Chief U.S. Economist said, "It's a reasonably upbeat view. It’s certainly a reminder that there are still some significant risks in the global economy (food inflation), and of course especially to the extent that it affects oil prices and commodity prices more generally. Having said that, our outlook for global growth and the U.S. economy is pretty positive. We think close to 5% GDP growth this year and next year in the global economy and sort of 3.5-4% over the next two years in the U.S."

One good thing Hatzius admits which others are slow to, is that food price inflation isn't included in economic data at this time, and is still several months out.

He said once that happens there will be upward pressure on the headline CPI numbers.

Even so, Goldman sees consumer spending improving as the year goes on. "I think the first quarter looks a lot softer than a fourth. The number now on record for the fourth quarter is 4.4% ... I think it will come down a bit in the wake of the downwards revisions to the retail sales report. I think the first quarter will be softer. Over the next year or so, I would expect something like 3.5% consumer spending growth, definitely better than what you have seen for the last few years, though not as strong as the recent spurt," added Hatzius.

Somewhat surprisingly, Hatzius also said he sees unemployment dropping to 8 percent by the end of 2012, much lower than his previous estimate of 8.75 percent.

Barrick (NYSE:ABX), Ivanhoe (NYSE:IVN), Eldorado (NYSE:EGO), Agnico (NYSE:AEM) Rise with Surging Gold Prices

The jobs report in the U.S. showing further terrible results have gold prices today jumping and gold miners rising with them. Barrick Gold (NYSE:ABX), Ivanhoe Mines (NYSE:IVN), Eldorado Gold and (NYSE:EGO) and Agnico-Eagle Mines (NYSE:AEM) are all in positive territory in anticipation of the inevitable inflationary move by the Federal Reserve, which will pump more money into the American economy.

Ivanhoe Mines made the highest move of the gold miners mentioned above, rising to $24.59, gaining $0.86, or 3.62 percent, as of 2:40 PM EDT. Following them was Agnico, which pushed to $72.78, a gain of $1.38, or 1.93 percent. Barrick also increased, standing at $48.40, adding $0.72, or 1.51 percent. Eldorado finished the grouping off, rising to $18.57, an increase of $0.21, or 1.14 percent.

A number of diversified miners also benefited from the fall in jobs, anticipating higher metals' prices because of the falling value of the U.S. dollar, which will worsen from the Federal Reserve's inflating of the money supply.

Commodity prices in general will continue to increase in price because of the falling value of the U.S. dollar and inflation from the Federal Reserve's actions.

Gold Prices Ready to Rebound?

Gold has taken a little bit of a hit this week, as investors ignored the bad economic news and latched onto the good.

That's highly unlikely to continue for long, as the weakness in the global and U.S. economy isn't going to improve any time soon, and mounting evidence confirms we're in for a continuing recession.

Gold prices will respond accordingly and continue their upward push to who knows where, as central banks' and government policies around the world continue to debase currencies and have done nothing to make a difference economically.

As predicted by us here and a number of others, government spending exasperates the problem, it doesn't help it. And gold and gold investors will be the beneficiaries of this folly for years into the future.

In the short term, gold prices could possibly drop, maybe to $1,245, but the support is so strong, that even if it goes below that it's unlikely it'll stay there long.

The revelation, which many of us already knew, that European banks and the stress tests related to them were a joke, and the depth of the sovereign debt risk is probably even worse than we know.

Picking and choosing what economic date we want to focus on isn't a good way to get a good overall picture of what is really happening, and gold investors aren't usually the type to do that, at least those that follow gold throughout the years.

So gold will continue on its upward run, and the economic data, if it can be trusted, will support the fact the global economy is still struggling, and the recession has never really ended. It was just masked by the trillions countries through at it.

That's all good news for gold investors.

AngloGold Ashanti (NYSE:AU) Rises with Gold Futures

The market has been teetering back in forth for gold over the last month, and investors have been shrugging off the underlying fundamentals underlying the reasons gold has been moving up in price for years.

AngloGold Ashanti (NYSE:AU) has followed the price movements of gold over the last week, like the majority of their counterparts, moving in tandem with the yellow metal.

The gold miner finished the week in New York at $40.52, growing $0.94, or 2.37 percent. Volume reached 2,267,099, a little above its 3-month average.

Gold prices will resume their upward run, it's a question of whether they'll continue to fall in August before that happens.

Even with the positive economic spin in the mainstream media, gold has found decent support, although it is down to its lowest levels since the early part of the year.

NovaGold (AMEX:NG), IAMGOLD (NYSE:IAG), Ivanhoe (NYSE:IVN) Down As Gold Prices Fall

NovaGold Resources (AMEX:NG), IAMGOLD Corporation (NYSE:IAG) and Ivanhoe Mines Ltd. (NYSE:IVN) all fell Monday, as gold tested the $1,180 an ounce mark, ending at $1,183.10 an ounce on the Comex division of the New York Mercantile Exchange.

With most economics seeming to be going against gold's grain, the relatively slow decline in price reveals the uncertainty of the market, and even though there is some risk appetite out there, it's not necessarily robust, for obvious global economic reasons.

Although investors were hailing the strong earnings and better-than-expected housing numbers, it isn't convincing, as there is nothing that is really surprising anyone, as the numbers for last quarter were expected to improve over their recessionary numbers from the year before, making everything look good this time around.

The current quarter is different, and we should see some weak numbers next time, although we're in the midst of this reporting season, so many investors aren't discounting that yet as it pertains to gold and equities.

Speaking of gold miners reporting for this quarter, the majority of them will be very strong, based on the strong gold prices last quarter, just like other commodity prices as well.

One thing I think will happen, and it could be any time, is gold prices are looking for an excuse to run, and investors are looking sideways at them, ready to plow money in them as soon as the negative news continues, which it will.

For now though, until investors realize the extraordinary threat the sovereign debt crisis in the European Union really is, and the joke that was the bank stress tests (which were a public relations ploy, not a true test), gold will continue to experience downward pressure, although probably at the incremental moves we've been seeing recently.

Gold miners like NovaGold Resources, IAMGOLD Corporation and Ivanhoe Mines Ltd. will perform in a similar fashion, although some, like Ivanhoe Mines, should do better than many of their peers.

Iamgold (NYSE:IAG), Goldcorp (NYSE:GG), AngloGold (NYSE:AU) Up on Weak Economy

As we gradually sift through the economic data and news, confirmation we are far from any type of recovery continues to emerge, as the latest data in new housing starts confirm once government props are removed it falls apart. Gold companies like Iamgold (NYSE:IAG), Goldcorp (NYSE:GG) and AngloGold Ashanti (NYSE:AU) will continually be the beneficiaries of the weak economy, as gold prices resume their upward climb.

Gold prices finished above $1,190 an ounce today, and the majority of gold miners climbed with it, as housing starts dropped another 5 percent in June, following the 15 percent drop the prior month.

Among the group of gold miners mentioned here, Iamgold performed the strongest of the three, ending the trading session in New York at $16.21, gaining $0.65. or 4.18 percent. They did decline after hours to $15.99 a share.

Next was Goldcorp, who had a nice upward move of $0.60, to end the day at $40.35, or 1.51 percent. They were level in after hours trading.

AngloGold Ashanti moved the lowest of the three, reaching $39.53 by close, a gain of $0.43, or 1.10 percent.

There is nothing that points to any of this changing, as the job market would have to completely turn around, which it hasn't, as consumers continue to hold back on spending as the economy continues to sputter.

Gold investors will be a happy lot going forward, as there will be a big move once the reality is digested by the market.

Freeport (NYSE:FCX) Earnings Report Should Reveal Economic Conditions

Although many were looking for Alcoa (NYSE:AA) to give some guidance as to economic conditions, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) will probably be a more accurate measure, although combined with Alcoa's numbers, could give a snapshot of where the economy really is at, against the numerous assertions and conflicting reports out there.

Tomorrow morning Freeport gives its earnings report, and it'll be especially important to see the copper numbers, although the secondary molybdenum and gold numbers will be important as well.

But taking into account the importance of copper in the global economy, that is the primary measure to look for from the point of view of economic conditions and where they have been at.

Just like the economies of Europe and the United States, China will be found to have slowed down some after the stimulus money wound its way through the system. Copper in the first quarter was up based on that, and the sales in the second quarter should give a real reading, or at least, more accurate reading of economic conditions when they're not being propped up by governments.

As far as sales goes, Freeport is expected to have sold about 830 million pounds of copper, 15 million pounds of molybdenum, and 270,000 ounces of gold

Analysts are looking for earnings of about $1.32 a share on $3.56 billion in revenue.

Liberty Media's John Malone Clueless on Gold

Liberty Media Corp.'s Chairman John Malone was talking about his investment strategy recently, and said the strange statement concerning gold and why he wasn't investing in it.

Malone said this, “I’m not a gold bug. There’s just something about gold that seems artificial to me.”

Both assertions show his ignorance. First of all, being a gold bug has absolutely nothing to do with investing in gold. This reveals Malone doesn't even know what the historical definition of a gold bug actually is.

But his second statement is even more strange to me. How can gold be considered artificial? Someone must have instructed him with those words and outlook, as they make no sense whatsoever.

Someone has access to Malone who trumpeted in his ear that gold has no real role other than making jewelry. That would mean that there is no significant demand from that point of view, which of course is completely false.

Now there is little industrial demand (although there is some), but that has nothing to do with the artificiality of gold, from the way Malone is saying and viewing it.

He doesn't understand economics and central banks and what the effects of policies and actions has on the markets, and ultimately on the price and value of gold.

Things like the amount of money being printed by central banks, inflation, debasing of currencies, this are the more important factors in gold, of which safety is a key factor.

Malone obviously has a hard time understanding or grasping this, so he simply calls it seemingly an "artificial" commodity.

Maybe he's just irritated he hasn't been invested in it over the last decade, and has missed out on making millions.

Gold Prices Today Finish Highest in Four Days

Even though the pressure was on for gold throughout the last week, gold prices today finished at their highest level in four days, and didn't move much below or above the $1,200 an ounce mark.

Gold futures for August delivery on the COMEX increased by $13.70 to end the week at $1,209.80 an ounce.

So continued support at around $1,200 an ounce either way continues, and that's a good sign going forward, flying in the face of the clueless commentators that attempted to paint the economic condition as rosy as the reason gold prices have plunged, even though the underlying fundamentals haven't changed in any way.

What is interesting for gold prices at this time, is it has found resistance going up or down right around $1,200 an ounce, and when it attempts to move either way beyond around $10, it seems to pull back and swing with that range.

In other words, gold prices have leveled, and this indicates in the short term that there's nothing really happening to give guidance to the price movement of gold, even though in the long term economic weakness, government policies, and central bank practices will continue to drive up the price of gold.

Gold Prices Fall off Cliff to Under $1,200

Gold prices corrected big today, dropping as much as $46.45 at one point to $1,197.19, a 3.7 percent plunge.

Most of this is on continuing weak economic data and news, which is another way of saying investors are concerned over deflation at this time, rather than inflation, which is one of the major, underlying reasons for gold prices going up.

Depending on the economic news today, we could see another sell-off in gold, and gold prices will plummet again if that's the case.

It doesn't matter though, as nothing in the fundamentals for gold has changed, and even if we have a couple more days of dropping prices, they'll definitely come back, and probably even stronger, as central banks and governments have ignorantly confirmed they're going to use quantitative easing (printing more money) to keep their respective economies from entering into another recession.

Printing money is also a good sign for gold investors, as it debases currencies and sets up gold as the safe haven of choice and ultimately the best place to be when inflation soars from the endless printing of paper currency. It's not a question of if, it's only a question of when.

So deflationary fears will result in the unfortunate printing of more money, which will result eventually in gold prices surging to new record-breaking levels.

Gold Futures Crushed as Investors Go to Treasurys

Investors today, who have been extremely fickle lately, have chosen to go to Treasurys as a place of safety rather than gold, driving the price of gold today down by $34.70, or $1,207.70 an ounce, as of 1:03 PM EDT.

Economic data has painted a ominous portrait of economic conditions, and it's weighing strongly on investors.

Uncertainty about inflationary or deflationary pressures also influences the price movement of gold on a daily basis, as economic data and reports have it potentially going either way, or at least it's perceived in that way.

One thing most people agree on, is the alleged economic recovery isn't, and it's increasingly doubtful as to whether or not we've ever left the recession, only having temporary respite because of massive amounts of money being infused into the economy from government policies.

Gold Up for Seventh Quarter in a Row

Even under pressure gold has been managing to stay ahead of the game and continue on its upward move.

Gold finished the month up close to 2.5 percent, while again having a great quarter, ending up by approximately 12 percent.

August delivery for gold increased to $1,245.90 an ounce, adding $3.50, or 0.3 percent.

Investors continue to move their capital into gold as one of their favorite safe haven places, as economic news continues to confirm the U.S. economy is doing very little, if it has ever left the recession in the first place.

Gold Prices Soar to Record High Close

Gold prices reached a record high close on Thursday, as continuing negative economic data show we are far from being out of the recession, even if people want to soon call it a double-dip recession, as if there was ever a recovery any of us have experienced.

Most of the economic data put forth as evidence of recovery has come from government gimmicks like "cash for clunkers" and tax rebates, as as far as housing starts go, which already plunged 10 percent once the rebate program was ended.

All this means there is no true demand in the private sector which can be pointed to as a reason to believe there has ever been a recovery in the first place.

Gold has been a major indicator of this reality, and the price of gold continues to go up as those who understand the forces at work run to the one real place of safety continue to invest in it.

Even the bad economic news was reported as only revealing slow recovery, not even questioning whether it was legitimate or not.

Gold prices today closed at a record $1,248.70 an ounce, a gain of $18.20 for the day. The former record close was $1,245.60 an ounce on June 8.

Gold Explodes Again on Weak Economic News

The attempt to paint a rosy economic picture is being ignored or not believed by investors, and gold prices are again exploding upward as it's considered the safest place to put your money in these difficult times.

At just before 1:30 PM EDT, spot gold prices were at $1,247 an ounce, a gain of $16.50 for the day.

People are starting to see that every time new, negative or weak economic data come out, the term "surprising" or "unexpected" is used, implying either the economists and government are completely inept, or it's a buzzword used in an attempt to manipulate people into thinking it's a temporary situation.

That strategy is no longer effective, as what is really being seen is when you use those terms month after month, the inevitable conclusion is there is no real recovery, and it's highly unlikely we've ever moved out of the recession in the first place.

No matter, gold prices are reflecting the growing disbelief in the economy picture attempted to be painted by the Obama administration, and other governments around the world.

Date from China, Europe and the United States confirm we're still in economic trouble, and gold prices will continue to rise in response to that economic reality.

One confirmation of this is the latest consumer price index data which dropped 0.2 percent in May, the largest fall since December 2008, confirming demand is slow and retailers are having to continue to cut prices in order to encourage consumers to spend.

Gold Prices and Unemployment Claims

We've been talking some recently on Everything Gold about the false connections so-called financial reporters are making between alleged improved economic conditions and gold.

The latest example I found was in reference to the U.S. Labor Department reporting unemployment claims dropped to 439,000 last week. This particular writer actually connected this to the reason gold prices rose during the day.

Evidently the reasoning was because gold increased after the data were released, that means the small improvement was good news for gold. It defies belief that someone could be a financial "reporter" and be that clueless.

Even those not that familiar with gold know gold rises on bad news and uncertainty, not on good new. Oh, let's go buy some gold in celebration that everything is okay. Whoever hears that being said? Yet, that's the logic behind this ignorance.

We've been seeing that all over the financial news lately, and thought we would write some on it so those interested in investing in gold don't go around putting their money in the metal because they hear what is perceived as good economic news.

Imagine what that writer was implying: Unemployment claims dropped by a tiny 6,000 last week, so everyone went out to buy gold and caused it to surge in price because of the celebration of that fact. It doesn't get much more ignorant than that about why gold is invested in and what the causes behind it going up in price are.

Gold Investing

Gold Top Performer for Decade

Gold Leading Investment Over Last 10 Years

With the last decade experiencing some tough economic times, the price of gold and the attraction of gold as a place of safety has encouraged investors to place their money in the yellow metal, which has resulted in it becoming the best performer over the last 10 years, generating profits of 277 percent during that time.

Other metals performing strongly were platinum and silver, which also grew by over 200 percent over that same period of time, with platinum enjoying a increase of 230 percent, while silver grew by 227 percent.

Gold should continue to grow in value for years to come, as continuing economic data and the printing of money by central banks continue to keep it at the top of the list for many investors.

Now the sovereign debt crisis in Europe has added another reason to invest and hold gold, and that situation is far from being worked out or understood how deeply it will go.

Gold Leading Investment Over Last 10 Years

Gold Futures Settle at $732.80 on the COMEX Division of New York Mercantile Exchange

Even though gold futures for December delivery settled at $732.80 an ounce on the Comex division of the New York Mercantile Exchange, a drop of $13.70, taking into consideration the current economic climate, it's not too bad, as most market forces are working against the yellow metal at this time.

Even so, we may test new recent lows before we see gold start to rise steadily again.

Deleveraging continues to strengthen the U.S. dollar, and gold probably won't be behaving like it normally does until that starts to unwind at a mature level. That's still a relative unknown, even at this stage of the economic crisis.

As the crisis starts to reach its apex, we should also help gold gain in price. We may be nearing the center of the storm in the U.S. soon, but it's impossible to tell because we really haven't any past experience to measure it by. It does seem that we're nearing the eye of the economic hurricane, and that will bode well for gold.

To me the important question for gold isn't when we begin to reach bottom, but how long we're going to stay there. It looks like it will be for some time, and that will definitely be positive for gold prices going ahead.

Gold Futures Continue to Tumble on Stronger U.S. Dollar

For the eighth time in nine sessions, gold futures fell as the U.S. dollar continues to be one of the major safety choices of investors. The yen is the other choice for regular investors seeking safety.

Gold for December delivery dropped by 2.8 percent or $22 to end the session at $768 an ounce on the Comex division of the NYMEX.

Forced liquidation continues to pummel gold, along with most commodities, as funds seek liquidity.

Gold will eventually recover because of the financing of the bailout by the government of the U.S economy. Once that starts to kick in, we should see a significant weakening of the dollar, increased inflation, and gold starting to rise again. It's only a matter of when, not if.

For now though, lack of liquidity is forcing funds especially to sell gold positions. That's driving down the price of gold for now, while the dollar continues to strengthen.