12/02/2009 by Philinje.

Everything you wanted to know but were afraid to ask:

http://www.galmarley.com/framesets/fs_keep_it_safe_faqs.htm

This information is from the founder of BullionVault. I must say I find BV to be more and more impressive, the more I learn about gold and how they structured their business.

BullionVault is a highly superior option to gold ETFs, which are themselves much better than gold futures, and somewhat better than gold e-money, and now I believe this is slightly better than holding gold or silver coins in one’s possession. You can read about all these options on the same site referenced by the link above.

Coins are the most reassuring form of gold ownership, and the risk of theft is low. Before I considered having physical coins in one’s possession as the most desirable form of ownership. However, I now realize that storage of bullion in an appropriate facility outside of one’s country is in fact highly safe, highly liquid and very convenient in case you have to leave the country you are currently living in. The one problem with coins is what happens in the event of your government making gold illegal - the benefit of being able to use coins for everyday expenses becomes diminished.

So a safe approach might be some gold and silver coins, and some BullionVault, then everything else is more or less short-term. If you want to be trading in and out, then vehicles like ETFs and futures are ok. Just be aware that these trading vehicles carry the same inherent risks that endanger the financial system generally. So they might go up in price, but things could get screwy when you were expecting to cash in.

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12/02/2009 by Philinje.

Yesterday gold broke above the critical $930 level, which in essence was the technical level that defined being in a downtrend vs. an uptrend. The downtrend has been in place since last March when gold hit an all-time high of $1020 or so. Even though gold has made an impressive recovery from its low just under $700 in late October, until yesterday technicians could claim that the downtrend line was still in place.

Signs are very good there may be a new all-time high in the near future, though of course that is not guaranteed. It all depends on whether you believe paper money will continue to lose value. The latest bailout package seems to be the impetus for gold’s recent strength, so clearly there are some people who are losing faith in paper money.

From here gold could climb a bit, fall back to the break-out level of $930, then accelerate up to a new all-time high. Estimates of that target range from $1040 to $1150. After that, there will likely be a sizable drop and some consolidation for perhaps a month or two.  So if you are an active trader, you could jump in on the very near-term drop toward $930, or if you want to load up without bothering too much about getting in and out, a month or two from now could be a good time.

How low gold will go is a question. One boundary is $780, based on a long-term channel line that tracks an upward French curve over years. If we get the new all-time high soon, then the retracement may not get below $850. Then there are some technicians calling for a drop to $650. The best strategy might be to focus on $850-890, keep some ammo for $780, and throw in the remainder at $650-690, which is likely to be the worst case scenario (but is not likely to occur).

Being in gold at $750 to $850 is exceptional, practically professional level trading. Getting in even now at $940 is still quite good, and waiting until the next all-time high is exceeded later this year at $1050 to $1150 is playing it safe. The target is $2000 to $3000 within a year, maybe two. Some are calling for a much higher target.

So those are your choices. Good luck.

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