Current Market Rates Per Ounce September 10, 2010 3:01:34 PM PST USD $  CAD $ Gold (AU): 1,246.35  1,289.47 Silver (AG): 19.87  20.56 Platinum (PT): 1,536.98  1,590.16 Palladium (PD): 515.30  533.13 USD-CAD Exchange Rate: 1.035 J&M Coin & Jewellery Ltd. 127 East Broadway Vancouver, BC, V5T 1W1, Canada Tel: (604) 876-7181 Toll Free Ordering: 1-888-244-9999 Fax: (604) 876-1518 e-Mail: jandm@jandm.com Web: www.jandm.com

Trading Gold with the Gold Direction Indicator By Peter Degraaf June 19, 2009 In an article named "All eyes are on Huey" that was posted on 321gold on May 13th, I drew your attention to the HUI index. The article pointed out that the HUI index was breaking out at 350. As it turned out, HUI rose to 400 -- an increase of 14%. At that point I alerted my subscribers to take partial profits as it appeared that the index was going to test the breakout. The Gold Direction Indicator had risen to 87%. The pullback has now taken the HUI index below the original breakout point which is not unusual. Pendulums have a way of 'over-swinging'. Today the GDI is at 18%, having risen up from 6% on June 11th and is providing us with a "buy" signal. This buy signal could be effective today, or it may take a few days for gold to rise in response. The Hulbert HGNSI (Gold bullishness index) stands at 10.2% compared to 56.8% in May-June, just before the sell-off. This is a contrarian buy signal. The price of gold often bottoms in early July and then meanders along, slow but steady, and after Labor Day gold takes out the top that is set in the spring. This is based on 35 years of historical data. This year, due to the massive USA Federal budget deficits, the bottom could come sooner, and the rate of increase could very well exceed historical rates of increase. Charts courtesy stockcharts.com. Featured is the daily gold chart. The up-trend channel is well defined and the pullback has reached our target at 926. Barring some unforeseen event, the expectation is for gold to break out at the blue arrow and turn the trend bullish again. The supporting indicators are near support levels. The 50 day moving average is in positive alignment to the 200DMA, and both are rising. This is the sign of a bull market in full gallop. The rate of increase of the blue channel is 3% per month. One of the free features on my website is 'long-term charts.' It is updated on a regular basis. Featured is the weekly gold chart. The arrows point to the 7 - 8 week gold cycle. The last two were 'long and short' but together they make 14. We are now in week #8, and while we cannot be sure if this is the bottom, all that is now required is for gold to close above 940 on Friday June 19th, in order for the cycle bottom to be confirmed. The supporting indicators are at levels of support. Featured is the index that compares the price of gold to the S&P 500 index. Price is finding support at the 1.00 level and a breakout at the blue arrow turns the trend (as compared to stocks), bullish again. Recent similar set-ups have resolved in favor of gold (green arrows). The supporting indicators are mixed, but will both turn positive upon a breakout at the blue arrow. The 50D is in positive alignment to the 200D and the latter is rising convincingly. Featured is the daily silver chart. Price became overbought at 16.00 and the target for a pullback was at 14.00 (a 50% correction). The supporting indicators are at support levels. The 200DMA is turning up for the first time since August 2008! The expectation is for silver to rise back up to the blue arrow, spend a few days consolidating there, then break out, thereby turning bullish again. Historically, based on over 40 years of data, silver almost always bottoms in June, tops out in July, bottoms again in August and, after Labor Day, silver day starts the annual Christmas rally. Featured is the long bond yield chart. Since January long-term rates have been rising. The up-trend channel is well defined. The RSI has remained above '50' for the entire rally. The 50D is in positive alignment to the 200D (green arrow). This trend is going to cause bond holders to sell bonds and look for a better investment (gold?). On the fundamental side, this is a chart that shows the amount of money the US Fed has pumped into the banks during the past 12 months. From 800 billion, an increase to 1.8 trillion dollars. By way of comparison, the small blip seen here at the end of 1999 was the money Mr. Greenspan pumped into the system during Y2K. The small blip seen in 2001 was his response to '911.' Nothing like this current increase has ever happened before ... except in France during the 1790s ... Featured is a French 15 Assignat dated 1792. Or except in Germany in 1923 ... Featured is a German 5 Billion Mark dated 1923. By this time the printing presses were running 24/7 and the demand was so great (it took a wheelbarrow full to buy a meal at a restaurant) that banknotes were printed blank on one side to save time and ink. Or more recently in Zimbabwe ... This young Zimbabwean trillionaire was quoted as saying that "this toilet paper is a lot cheaper than the real thing." SUMMARY Markets move up and down with amazing regularity. The secret to success is to 'swing along' and not 'against' the cycles. Once you are sure the fundamentals are in place, (in this case a fixed supply of gold and increasing demand) you can afford to 'buy the dips' and 'ride the waves'. The billions of dollars that are being spent by the various governments are going to result in currency degradation and will end up causing prices for everyday goods and services to rise. Money wasted is nevertheless money spent, without an increase in goods. The price of gold, where supply is limited, will benefit. The debt levels of 2008 exceed those of the 1873 depression as well at the 1929 depression. The derivative market runs in the hundreds of trillions of dollars. Historically, once a country uses the printing press to pay for its stated goals and ongoing obligations, there is not one instance in human history where those debts and obligations are ever being paid off. These actions have always resulted in the destruction of the currency. The unique aspect of today's monetary inflation is that it is not limited to one country but a host of countries are all inflating together. As a result of the monetary inflation -- when all of the newly created money begins to leave the banks and enter the system -- the price inflation will be worldwide. It will not be limited to just one country, as in the examples shown above. There are presently more trends in the process of becoming exponential in existence than at any time in history. One of these trends is monetary creation. I posted a great video about this subject on my website. You will find it among the linked articles. The title is "Exponential Trends". "From the ash heap of fiat currencies a phoenix will rise. This phoenix will have a bright yellow sheen. It will be measured in grams, ounces and tonnes". DISCLAIMER Please do your own due diligence. I am NOT responsible for your trading decisions. Happy trading! PETER DEGRAAF is an online stock trader with over 50 years of investing experience. He issues a weekend report for his many subscribers. A sample copy of a previous report is available upon request. He can be reached at itiswell@cogeco.ca. At his website (pdegraaf.com) you will find a number of long-term charts that are updated regularly. Fourty-seven pages of worthwhile quotes are proving to be a very popular attraction as well. Subscription information is also available at the website. Home | Products and Prices | Buying | Selling | FAQ | Articles | Forms | Top Website © Copyright J&M Coin & Jewellery Ltd. 2009. All rights reserved. Pricing index programming and site hosting by Sandrix Technologies Ltd. (AXD)