Time to Buy Gold and Silver

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Fundamentals are also pointing toward higher prices, as we head into the Indian wedding season. The latest statistics are showing extremely robust gold sales, with imports up 45% during August. But it is not only India that is showing signs of surging demand for the precious metal, Abu Dhabi reported gold sales were up 300% during August. We also have news of significantly lower supply coming out of the world’s largest gold producers. Rising demand and declining supply always equals higher prices.

Gold made a huge run from $650 to $850 during the back half of 2007. After this run, gold corrected and consolidated around the $800 level and support at $790 proved to be a very solid floor from which the second run was launched that took gold from $800 to over $1,000. Fast forward to 2008 and gold’s most recent correction has seen the price fall back to this very important floor once again.

On three separate occasions during the past month, gold has tested this support level and has bounced off with vigor...From a technical point of view, it looks like gold may have found its floor.

Fundamentals are also pointing toward higher prices, as we head into the Indian wedding season. The latest statistics are showing extremely robust gold sales, with imports up 45% during August. But it is not only India that is showing signs of surging demand for the precious metal, Abu Dhabi reported gold sales were up 300% during August. We also have news of significantly lower supply coming out of the world’s largest gold producers. Rising demand and declining supply always equals higher prices.

With inflation out of control and the dollar extremely overbought, I anticipate a rally in precious metals and energy over the next several weeks. With the economy coming out of a consolidation phase and looking ready to continue downward, we should a powerful spike at funds rush back into commodities and out of financials, housing and blue chips...Jason Hamlin, www.GoldStockBull.com

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