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To: ms.smartest.person who wrote (2981)	1/23/2008 12:10:58 AM
From: ms.smartest.person	Respond to of 3198

The Joy of a Dip in Gold Prices Take your chance now! The Gold Price will soar on US rate and tax cuts... WITH LAST WEEK'S fall in the Gold Price taking it down to the mid-$800 region by Tuesday morning, a large number of new gold investors were a little stunned. But there's no need to be surprised, or dismayed. We feel the opposite here at Gold Forecaster. After all, when gold was running up through $900 after taking off at the end of last year, may have been forgiven for believing that this price would rise to four figures. But inevitably, such a rise will always be met by a fall back to where it started from, unless there is good reason for the price going there in the first place. So now we saw a pullback of just below 6% to $875 – and we are delighted. Why? Because when such a pullback happens it takes the pressure off the buyers. Sellers who hold off now feel that the price has peaked and they come into push the price down. Speculators run for cover not knowing which way to go next. The emotional buyer or sellers takes stock and tighten their grip on positions or close them. Once this action is complete, the Gold Market – like any market after a sharp move higher – calms down again. Everyone takes stock of what the market realities are and what they expect next. Then the following move is made for whatever reason. The trend regains it health and moves on. This is called a "consolidation period" by technical analysts, and gives power to the market to move ahead. And today, with the Fed cutting interest rates by 0.75% in one go, watch the market to move on from here. We hope you enjoyed the fall, taking your chance to Buy Gold or sit on your existing position and catch your breath. Because things may well have now changed. In India whenever such a "spike" in Gold Prices occurs, the first knee-jerk reaction is to say "I'm not paying that" and the buyer is sidelined. Many will turn round and say the price has gone too far and stand back waiting for it to pullback. Once it has done this, buyers then return. The pullback after a rise means that a new "floor" can be established in the Gold Price, a new foundation laid upon which both buyers and sellers can feel comfortable at that level. It is a true reflection of demand and supply at present. It is then that long, medium and short-term players will return to the Gold Market. This is why it is a joy to behold. Once a consolidation is complete, the fundamentals driving the underlying market dominate pricing, with a rise or a fall in the price thereafter. Of course, the wise player knows where this future "floor" price will come in a pullback, so will aim to buy on the fall and particularly when the fall seems overdone or overshoots this price. And in the knowledge that the price is going much higher, another joy is to buy "on the fall" (or to "buy the dips" as Wall Street puts it). Then watch the price jump up, giving a great entry point and immediate profit. Many may feel uncertain of what's to come next. But we here at Gold Forecaster will be talking in the present and next issue about what the picture going forward really is for anyone choosing Gold Investment or putting money into the other precious metals, including silver and platinum. We believe we are at one of the most important junctures the global market has seen in modern history – the global market of currencies, credit and precious metals all thrown into the cooking pot of the global economy – and we are excited! Julian D.W. Phillips, 22 Jan '08 goldnews.bullionvault.com