There’s no secret formula to buying gold low, and we aren’t holding the right hand of Midas, but there are periods when prices tend to be lower than others. And if those tendencies play out, it can give us the opportunity to snag a high-quality asset at a bargain price.

So, how do you get a bargain price? You cheat.

I think the secret to getting a low-cost basis on all your gold and gold stocks is this: only buy on significant price pullbacks.

And this can be done without trading or using technical analysis.

I think there’s a good chance we can cheat this summer. For example, here are the average monthly increases in gold since our bull market began in 2001.

In our current 9-year bull market, June and August have seen the lowest average return for gold, representing one of the best times to buy.

You’ll see that in the bull market of the 1970s, summer was also a good time to buy gold.

What about Gold Mining stocks? Since 2001, June and July have been among the weakest months and thus one of the best times to buy.

Obviously, these are price tendencies and not certainties. There were Junes when Gold Bullion was up, and some Julys when Gold Mining stocks were up.

Meaning, we’d avoid using these charts for trading purposes or in anticipation of an immediate gain. Instead, use these "trendencies" to look for possible price weakness. And if it arrives, use the opportunity to add to your holdings and position yourself for the next leg up in the bull market.

What are the odds of a correction in gold and Gold Mining stocks this summer?

Since 2001, almost every precious metal stock, in every summer, has moved lower from its May high. This includes gold and silver. There’s no guarantee this won’t be the summer of galloping unicorn herds, but the record is hard to argue with.

Here are the buy zones I identified for gold and Silver Prices, based on a tally of how far they’ve corrected from their May high to their summer low, in each year of the current bull market.

You’ll see that the average price of all pullbacks in Gold Bullion, from the May highs to the summer lows, is 8.9%, and would take the price to $1,126.98 an ounce.

That’s not to say this "low" price will be hit, but it tips you off that a fall to that level would not be out of the ordinary – and would also be an invitation to buy gold.

You can also see the smallest summer decline, which we’ve already exceeded. We wouldn’t wait for the largest drop to materialize; there’s a good chance you’d be left empty-handed and chasing the stock higher.

Silver is naturally more volatile, allowing us perhaps a better opportunity to buy low. The average summer decline for silver is 16.6%, which would take the price to $16.39 an ounce.

However, the furthest that Silver Bullion has fallen so far this summer is $17.36, meaning strictly on a historical price basis, a 10% correction from current levels would be perfectly normal. And again, an invitation to Buy Silver.

Whatever price (or prices) you select, however, I’d only use the charts to add to current positions, not for trading. The currency crisis Casey Research believes is inevitable could strike suddenly again and will eventually hit the US Dollar, and the last thing you want is to be left standing on the sidelines if gold and gold stocks surge higher. In our opinion, being completely out of precious metals in the middle of a once-in-a-generation bull market would be a mistake.

Instead, keep adding to your savings every month and buy when it feels like you’re cheating.

See you in Milan…?

Buy gold and silver at the very lowest prices possible, and store them more securely than anywhere else on earth, using world No.1 Bullion Vault…

Source:"Trendencies" in Gold & Gold Stocks

Particularly if the broader stock-market falls and Gold Mining stocks don’t. We now have data showing this has just occurred.

From April 2009 to April 2010, gold stocks mirrored the S&P. The two markets held hands as often as high school sweethearts; there was very little separation between them. While it wasn’t always a daily connection, any weekly and especially monthly chart showed them moving in tandem.

Until now…

For the quarterly period of April through June, Gold Mining stocks advanced 11%, tracking gold’s gain of 10.7%. The S&P, however, lost 14.1%.

We haven’t seen this level of separation between gold stocks and the general stock market since the first quarter of 2009. This demonstrates obvious strength in our sector, and is precisely the kind of action that can signal we’re getting closer to our precious metals investments starting a major leg up.

In the big picture, this data should be considered a short-term indicator. However, it’s a refreshing reminder that at some point, it won’t matter what the broader markets are doing. In the precious metals bull market of the 1970s, the Barron’s Gold Mining Index soared 652%, while the S&P gained only 22% for the entire decade. This means that if you’re bearish on the economy, you don’t have to be bearish on gold stocks.

Whether this is the beginning of permanent separation or not, the following chart tells us the stock market, in relation to gold, is going one direction.

At gold’s bottom in April 2001, the Dow/Gold ratio (DJIA divided by Gold Price) was 41.2. It now stands at 7.9 (as of July 2).

When gold peaked in January 1980, the Dow/Gold ratio reached "one," meaning they were both selling for about the same price. To hit that same ratio today, gold will have to go higher and the Dow simultaneously lower. The fundamental reasons gold will rise are far from over, and a second leg down in the broader markets seems almost locked in at this point.

In this context, Doug Casey’s call for a $5,000 Gold Price doesn’t seem so farfetched. It also coincides with his call for a Greater Depression, an environment not exactly suited for higher stock prices. $5,000 gold = 5,000 Dow.

Where do you think they’ll meet – three? Eight?

This has obvious implications for your investments. If you’re investing for the big picture, you first want to think twice about any conventional stock investment. You might even consider a short position on one of the indices, something without a time limit, such as an inverse ETF.

Second, you should plan on higher Gold Prices. While pullbacks are inevitable, it does mean that even if you don’t own gold yet, it’s not too late. In fact, any excuse you have now for not buying gold will seem shallow and meaningless when the Dollar begins cratering and so does your standard of living.

Third, don’t shy away from Gold Mining stocks. Yes, they’re still stocks and thus vulnerable, and we’re not sure the separation is here to stay, but selling your core holdings would be, in my opinion, a mistake. One of these days gold stocks won’t wait around for you to jump back in. And you could find yourself chasing them, a tactical error for the investor looking to maximize profit from what we believe will be a once-in-a-generation bull market.

In fact, if you had followed only this strategy since the precious metals bull market began in April 2001, you’d be up 375% in your gold holdings and up 707% in your gold stocks. An investment in the S&P, meanwhile, would’ve returned you exactly zero.

It’s our opinion this trend will continue. Gold Mining stocks could very well get cheaper in the short term, handing risk-friendly investors an excellent buying opportunity. But in the big picture, they’re destined for much higher levels, we believe.

My advice? Make sure you’re on the right side of this trend.

Buy Gold at the lowest costs possible, and storing it in the very safest way for just $4 per month by using BullionVault…

Source:Gold Mining Stocks Tracking Gold

McGhee On The Gold Currency
Resource Investor
If you go back to the 1970s—keep in mind that prior to 1975, unless you owned pre 1933 gold coins, you couldn't own gold legally in the country. …

Source:McGhee On The Gold Currency – Resource Investor

Peering back at the recent past therefore, analysts and economists all agree:

When looking for a sure-fire "inflation hedge", you surely won’t find it in gold.

Thing is, however, US investors and savers didn’t need an inflation hedge back in the 1980s and ’90s. Not in Gold, at least. Because the better alternatives – productive assets such as real estate and stocks…or the "risk-free" assets of cash, Treasuries and investment-grade bonds – all paid way more than inflation anyway.

Who needs a lump of dumb metal if just holding cash pays 4.5% real returns each year on average, as it did in the ’80s?

Why bury your savings in a rare, deeply liquid but unyielding asset when stocks keep rising by one-fifth per year – and paying a 2.4% yield each year on top – as they did in the ’90s…?

And why buy and hold anything else when stocks, cash, bonds and property all fail together, as they have so far this century…?

It isn’t rocket surgery. In two of the last four decades, people have twice turned to Buying Gold…pushing the price higher…when alternative stores of wealth failed at the task.

Whereas during the two intervening decades, gold wasn’t required. Because you don’t need an "inflation hedge" if cash-in-the-bank is paying 4.5% per year over and above the race of increase in consumer prices. And nor do you need a "safe haven" when stocks keep rising by 20% per annum.

Whereas today? Decide your outlook for the major alternatives – meaning cash and stocks, but also real estate and, perhaps most critically in our world of record government debt issuance, bonds – and you might just work out whether you need reliably rare, indestructible gold in 2010 and beyond.

Ready to Buy  Gold today…?

Source:Gold's Inflation Bogey, Part II

Peering back at the recent past therefore, analysts and economists all agree:

When looking for a sure-fire "inflation hedge", you surely won’t find it in gold.

Thing is, however, US investors and savers didn’t need an inflation hedge back in the 1980s and ’90s. Not in Gold, at least. Because the better alternatives – productive assets such as real estate and stocks…or the "risk-free" assets of cash, Treasuries and investment-grade bonds – all paid way more than inflation anyway.

Who needs a lump of dumb metal if just holding cash pays 4.5% real returns each year on average, as it did in the ’80s?

Why bury your savings in a rare, deeply liquid but unyielding asset when stocks keep rising by one-fifth per year – and paying a 2.4% yield each year on top – as they did in the ’90s…?

And why buy and hold anything else when stocks, cash, bonds and property all fail together, as they have so far this century…?

It isn’t rocket surgery. In two of the last four decades, people have twice turned to Buying Gold…pushing the price higher…when alternative stores of wealth failed at the task.

Whereas during the two intervening decades, gold wasn’t required. Because you don’t need an "inflation hedge" if cash-in-the-bank is paying 4.5% per year over and above the race of increase in consumer prices. And nor do you need a "safe haven" when stocks keep rising by 20% per annum.

Whereas today? Decide your outlook for the major alternatives – meaning cash and stocks, but also real estate and, perhaps most critically in our world of record government debt issuance, bonds – and you might just work out whether you need reliably rare, indestructible gold in 2010 and beyond.

Ready to Buy  Gold today…?

Source:Gold's Inflation Bogey, Part II