Gold Futures Drop as Investors Take Profits

After a couple of days of gold futures surging, investors decided to take some profits off of the table, as gold for April delivery dropped $19.80, or 1.2 percent, to close at $1,595.70 an ounce on the Comex division of the New York Mercantile Exchange.

Some media outlets suggested it was positive macroeconomic data out of the U.S. and Europe that resulted in the downturn, but that's doubtful after Federal Reserve Chairman Ben Bernanke stated he has no intention of stopping stimulus measures, which of course confirms the extreme fragile global and American economy.

Another thing is any investor that believes in any way that Europe has anything positive economically to base an investing decision upon, is setting themselves up for failure, as Europe is and will continue to be an economic basket case no matter what positive spin the financial media attempt to put on it.

For example, some news reports said gold futures fell because Italian political parties are starting to work on the possibility of forming a government. So what? Italy is working on forming a government. That's meaningless. Italy is going to have a government no matter what the news reports say. So the idea is put forward that they are working on it is considered news and a reason for gold investors to sell. That would mean gold investors bought gold because there were concerns over whether or not Italy would form a government. It's irrelevant of course.

Britain also continues to be an economically challenged area, where its economy contracted by 0.3 percent from the last quarter.

The only positive economic news in the United States continues to be the housing sector, where pending home sales in January were up a little more than expected. Other than that, most of the economic news in America is dismal.

Durable goods orders were reported as having fallen in January, a nod towards extremely weak manufacturing sector. Durable goods orders in the U.S. plunged 5.2 percent last month, where economists were looking for a drop of about 4.0 percent.

As for currencies, the euro U.S. dollar rose to $1.3101. The dollar index, which measures the U.S. dollar against a basket of currencies, was also down on the day.

Gold Prices, Imports, Nuggets, Goldman and Stimulus

Gold pushes towards $1,700 mark

India gold imports could plunge 25 percent on duty boost

Iamgold sees $2,500 an ounce for gold

Gold could soar to new high in two years

Germany bringing its gold home

Gold nugget found valued at over $300,000

Argonaut Gold surpasses production guidance

Will gold bull run continue?

Goldman sees gold plummeting to $1,200 by 2018

More stimulus? Philadelphia manufacturing contraction stirs hopes of more

African Barrick Gold looking at ways to slash costs

ECB Making Plans for Bond Acquisitions

In the short term the announcement by ECB President Mario Draghi that the European Central Bank drew a yawn from the markets after his aggressive posturing recently on how he'll do anything to support the euro.

"The Governing Council, within its mandate to maintain price stability over the medium term and in observance of its independence in determining monetary policy, may undertake outright open market operations of a size adequate to reach its objective," said Draghi.

"The Governing Council will consider further non-standard monetary policy measures according to what is required to repair monetary policy transmission. In the coming weeks we will design the appropriate modalities for such policy measures," he added.

The Federal Reserve is also expected to make a move at its next meeting in September, as Chairman Ben Bernanke noted in the recent meeting that the U.S. economy was faltering and the central bank stands ready to take action when needed.

What this means is come the latter part of August and early September we should see a big upward move in stocks and commodities in response to the two probable initiatives by the ECB and the Federal Reserve.

The move by the ECB will probably be very close to the same move by the Fed.

With little reason for Bernanke waiting, it appears he's caved to pressure to wait until it could make the economy look better as the election approaches, giving a potential boost to Obama, who is in danger of losing the election in the midst of the disastrous economy and his atrocious economic policies.

Gold Poised to Rise on Central Bank Stimulus Expectations, Safety

With weak economic data coming in from China and the United States, and the ongoing sovereign debt crisis in Europe, it appears the probability of even more stimulus will be inevitable.

The presidential election in the United States, which is increasingly competitive, and could result in Obama getting routed as the economy continues to fall apart and he panders to his radical base.

It's highly improbable that more austerity will be put in place before elections, although some in the euro zone remain adamant about it, with the most important player - Germany - continuing to resist eurobonds without more controls in place.

Even then it's uncertain the euro zone will be allowed to go forward with the idea that all the countries can spend and go into debt with impunity, while the rest of the countries share their risk.

That won't work over time, but it could be attempted and put in place because of the politically religious commitment to the euro and the European Union, which both are in danger of collapsing.

Consequently, with expectations of more stimulus growing, currencies are coming under pressure again, with the U.S. among them, providing a positive environment for the rise in the price of gold and silver.

With the U.S. dollar losing appeal, gold is again rising in importance for the place to safely place capital. There really is no other alternative when the dollar falls out of favor, as most other currencies are in even worse shape.

Gold miners are also getting a closer look from investors, as they have been hit hard by the recent fall in price of gold.

A couple of companies receiving recent analyst attention are Randgold Resources Ltd. (NASDAQ: GOLD) and Yamana Gold (NYSE: AUY).

Randgold was upgraded by Goldman Sachs (NYSE: GS) from a "Sell" rating to a "Neutral" rating.

Yamana Gold was downgraded by Dundee from a "Buy" rating to a "Neutral" rating.

Spain Gets $125 Billion Bailout from Euro Zone

The question about Spain's economic future has been answered in the short term, as finance ministers in the euro zone came to an agreement to lend the country up to $125 billion to shore up its weakened banks.

While it wasn't a total surprise Spain would get aid, the amount did raise some eyebrows, as it was a lot more than expected.

Even though there is up to $125 billion on the table, the exact amount to be lent is still being hashed out, and won't be decided for about a week.

This of course will be hailed as a great moment, but in fact it is a disaster, and will exasperate the financial health of the region over time.

Until there are significant austerity measures taken over time, there will be no solutions to Europe's economic woes, as Keynesianism has proven to be a failed economic theory and practice.

The amount announced to be on the table for Spain was for media consumption and dissemination, as it will help to calm extremely jittery markets, as fear of contagion was reaching a fever pitch, almost as bad as the very real contagion itself, that has only had the can kicked down the road once again, only delaying the inevitable day of reckoning.

The upcoming Greek elections on June 17 could rain a lot on the euro zone parade if the people of the country vote for the country to leave the zone.

Greece isn't too important, as its economy is rather small and insignificant in contrast to Spain's, but it could be the first domino to fall in what will eventually become a string of dominoes.

That's not really a bad thing, as Europe would be much stronger without the deadbeat nations attempting to extract more money from the productive European nations.

It'll be fun to see the pathetic dream of those wanting a one-world order blasted apart by the inevitable, upcoming events. Hang onto your seat, it's going to be a fascinating ride as it unfolds.

Berkshire Hathaway's (NYSE:BRK-A) Warren Buffett: Time to Retire?

Warren Buffett, who runs Berkshire Hathaway (NYSE:BRK-A), since the onset of the economic crisis and recession, has steadfastly stood by the misguided actions of the Federal Reserve and government bailouts, saying it had to be done, even though the consequences over time will be devastating.

Buffett, now 80-years-old, was used by the New York Times to prop up the economic debacle again via an op ed where he said:

"Just over two years ago, in September 2008, our country faced an economic meltdown. Fannie Mae and Freddie Mac, the pillars that supported our mortgage system, had been forced into conservatorship. Several of our largest commercial banks were teetering. One of Wall Street’s giant investment banks had gone bankrupt, and the remaining three were poised to follow. A.I.G. (NYSE:AIG), the world’s most famous insurer, was at death's door."

Buffett, and partner Charlie Munger, as gold investors know, don't understand or even like gold. Buffett long ago abandoned the economic philosophy of his father Howard, and gravitated and embraced Keynesianism, which has led to the disaster we face today.

The reason Buffett supports the policies and actions is he is totally and completely tied up into government excess because he looks for companies that have monopoly positions, or at least as close to it as you can get.

That provides the protective moat he always talks about, and unfortunately the government plays a big hand in that with companies, as it interferes in the marketplace and promotes the types of businesses they prefer to succeed, giving an extraordinary advantage, or creates an unsustainable industry that wouldn't otherwise exist.

One example of that is the energy industry, where solar and wind power couldn't survive without being propped up by the government. There are many others like that.

Buffett has come out of the economic closet over the last several years, and contrary to his past behavior and communication, has made his embracing of the government and politics in a way that he hasn't done before, at least in the openness he has portrayed.

Charlie Munger has also made negative comments about gold, as he sees it as useless, even though it is a major force for safety and battles inflation, among a number of other things.

I wonder if these guys are simply getting too old to run Berkshire and other companies (in the case of Munger), as they are asserting things in a way which makes one wonder if they are being influenced and manipulated behind the scenes.

Either way, Buffett, in my opinion, has lost some of his luster over the last several years as he became more political and revealed his liberal and big government leanings, something that is obviously far beyond his expertise.

Knowing how to identify great companies and sectors to invest in is a far cry from understanding economics and the impact of the Federal Reserve and other central banks.

He understands it for how it helps his businesses, but he seems to neglect it in reference to the toll it'll take when our progeny must pay for the costs of the bailouts and fiscal stimulus.

In this, Buffett is as disastrous as any other misguided so-called economist working from the assumptions of Keynesianism.

Citigroup (NYSE:C) Sees $1,300 Gold in a Week

With one caveat, Citigroup (NYSE:C) says within a week we could see gold hit $1,300, and the caveat is if the Federal Reserve in the U.S. announces they're going to implement quantitative easing again.

If that happens, all bets are off as to how high gold prices could go, as gold prices today broke another all-time record, and that will continue to happen on a consistent basis.

The reason this will happen is the U.S. government and Federal Reserve through all that they had with the over $1 trillion already spend in an attempt to battle the recession. It didn't work. They have nothing left to throw at it be more money, which will result in the price of gold continuing to skyrocket.

Repercussions from the original stimulus spending are starting to be felt, as the core Producer Price Index in the U.S. increased 0.4 percent in August, part of the reason for the surge in gold prices today.

The U.S. government and Federal Reserve are drunk with spending, and like an unrepentant wino, think another drink won't hurt them.

Even some of advocates of the first Obama stimulus, like Alan Greenspan, are calling for the government and central bank to stop the madness and let the market heal itself; something that should have been done in the first place.

They won't, as they think one more drink, or spending spree, won't hurt them. This is why we can be confident going forward gold prices aren't going to go anywhere but up. Nightcap anyone?

Eldorado (NYSE:EGO), Yamana (NYSE:AUY) Novagold (AMEX:NG) Soar on Record Gold Prices

It'll take time to see if the relatively benign economic news concerning the weakness of the European Union is the ultimate catalyst is leveraging gold prices to expected levels, along with the somewhat lagging gold mining stocks like Eldorado Gold Corp Ltd (NYSE:EGO) Yamana Gold, Inc. (NYSE:AUY) and Novagold Resources Inc (AMEX:NG), which soared as gold prices once again surpassed record levels.

Gold miners have responded to soaring gold prices as a mixed bag, which in some cases is justified by the unknown or lack of performance, but in many cases, based on the fundamentals, such as in the case of Yamana Gold, seem to not be able to catch the gold price wave, and has lagged behind some competitors with much less reserves and quality management.

When talking about "benign" economic news, I mean by that that other recent news should have devastated the markets and pushed gold prices and miners higher, like the revelation the stress tests for European banks were pathetic, and the banks were much more exposed to sovereign debt than revealed.

So the idea that Europe isn't as strong economically as thought, is rather weak in comparison to the recent stress test revelation.

I think this is why the price of gold skyrocketed Tuesday, because there is a pent-up realization that the economy and its condition has been covered over by rigged reports and focus on the positive only by the mainstream media, which can't seem to report honestly unless their man Obama and the Democrats are made to look bad.

No matter, the truth is slowly coming out to the general population as to the devastate U.S. economy, and even with reports generated to make it appear confusing and mixed, that is slowly dissipating into an understanding of the danger we're still in, and gold is waiting there for investors to put their money into to protect themselves.

The idea of throwing out more stimulus is a surety now, or at least the attempt to do if, and if that happens, gold will again get a big upward bump as investors seek to protect themselves against a debased currency and out-of-control spending.

Gold miners will take part in the response to this scenario as it continues to play out, and they have, in many cases, a lot of room to run before things level out.

Gold Soars for 8th Straight Day, Payrolls Down, Recession Worries Up

News outlets reporting on the "disappointing" and "unexpected" results of the U.S. payroll data, somehow find themselves using those words every time the economic data confirms the frailty of the U.S. economy, which when you remove the government props, at best show they've only slowed down the economic crisis, and at worst, and most probable, exasperated it.

Now we're almost surely going to enter into a period of more quantitative easing, which is just another way of saying the Federal Reserve is going to resume it endless printing of money.

Peter Schiff concurs, saying in a report, “It is now widely accepted that the continued domestic weakness will cause the Fed to significantly expand stimulus efforts through so-called quantitative easing. It’s a strong signal for traders to flee the dollar.”

Now that the historical inverse relationship between gold and the U.S. dollar seems to have returned, after a period of time it moved off that to a euro/gold inverse relationship, we should see gold start to rise again as the reality of the weak American economy again sinks into the minds of investors.

Gold is already responding, as it has ended in positive territory for the eight trading day in a row, moving up to $1,205.30 for December delivery on the Comex division of the New York Mercantile Exchange. That was for the most actively traded contract.

It's incredible to hear the mainstream media outlets focus on the release of census workers, which they attempt to paint as a temporary situation. Unfortunately they, in general, weren't near as aggressive in saying that when the census workers were hired and propped up the jobs market as if was on a solid foundation months ago.

There is nothing really new in these numbers, other than confirming what any discerning person already knew, and that is the private sector hasn't been hiring, and the hiring by the government for needless jobs (even without the census workers included), have created the illusion of at least a level situation. That fallacy has been destroyed with the removal of the government props and we see the American economy naked as it actually is.

I don't believe there has ever been an economic recovery in the United States, only the selling out of the future of our children and grandchildren as the Obama administration and the Federal Reserve attempt to print and spend money in order to buy time until a real recovery begins.

Unfortunately, their Keynesian strategy is backfiring, and future generations will have to pay for the outrageous stimulus programs which have done absolutely nothing to help the economy, but rather are only extending the recession longer.

Not only that, but now an increased tax burden has been added to the problem for the American people, and that should cause an even deeper rebellion and resentment from those Americans, who are increasingly discovering what these actions are doing to their country.

As far as how this affects the relationship between gold and the euro, that has started to revert to the former relationship of moving in tandem with one another, although there is little reason for that to happen, as nothing has really happened to change the sovereign debt crisis in Europe, other than the media's decision to report the crisis is relatively over.

The market is acting like there has been a real change, so while they believe it, the euro/gold relationship looks like it'll act like it has in the past.

If and when that changes, all bets are off as to how high gold prices will go, as there is really nothing in the way any longer to keep it down.

Those with discernment understand the enormous economic challenges ahead, and will invest or hold their money accordingly. Gold will remain one of the best places for safety and returns for some time to come.