Is the Price of Gold Going Parabolic?

The latest rise in the price of gold may be taking on the parabolic rise of the third phase. I would have thought that it was a bit early for that! Gold seems to be fighting to stay above $880, but is bounced down at times by normal profit taking or manipulation. It is currently at $881.70 and silver is at $15.68 still lagging behind gold.

Another quote from Casey's Daily Resource Plus (Emphasis added): "The open interest numbers for Monday's huge PM rally are in. In gold, o.i. rose 12,376 contracts and silver was up another 3,139. The price managers are still 100% in control of this market and are showing no signs whatsoever of backing off. Remember, they are not there to prevent the price from rising, but they are there to prevent it from seeking its true value in a very short period of time. The last thing that the Cartel wants is an out-of-control gold price. All they're succeeding in doing is dying a death of a thousand cuts rather than death by a single thrust. Sooner or later it's going to get away from them anyway; but until then, it will be business as usual for 'da boyz'.

I see in a couple of reports (one on CNBS) that Dennis Gartman sold 40% of his gold position today. He says gold is overbought and wants to buy it back when the price is back in the low $800 range. It will be interesting to see how he makes out, as it's not a trade I would be making at this time of year...unless he knows something we don't. I also note that the GLD ETF now has 639 tonnes in it.

Besides gold and silver, the President's Working Group (and their proxies) were everywhere on Wednesday to prevent a total market breakdown. They've succeeded for the moment. And the Dow....mercy sakes!...they turned it from a 70 point loss to a 146 point gain. I would suspect that there was a lot of short covering once this 'rally' developed some legs. The dollar got another out-of-the blue 'hail Mary' rally as well. Chalk one up for Paulson and his merry band of criminals."

On currencies, here is the latest from Kitco.com:

Exchange Rates
(Exchange rates displayed are the middle point between bid and ask)	[details]

Currency	Chg% X=1$USD	NY Time	X= 1$USD	X$USD =1	Gold Price/oz	Gold Chg	Gold Chg%
US Dollar	--	01/10-10:25	--	--	881.60	+2.30		+0.26%
Australian Dollar	+0.90%	01/10-10:20	1.1252	0.8888	992.04	-6.27		-0.63%
Brazilian Real	+0.31%	01/10-10:25	1.7587	0.5686	1550.65	-0.62		-0.04%
British Pound	+0.08%	01/10-10:25	0.5104	1.9594	449.98	+0.87		+0.19%
Canadian Dollar	-0.12%	01/10-10:20	1.0105	0.9897	890.91	+3.48		+0.39%
Chinese Yuan	-0.12%	01/10-07:48	7.2685	0.1376	6408.64	+25.18		+0.39%
Euro	+0.53%	01/10-10:20	0.6782	1.4746	597.92	-1.54		-0.26%
Indian Rupee	+0.01%	01/10-08:26	39.1700	0.0255	34536.19	+89.61		+0.26%
Japanese Yen	-0.31%	01/10-10:25	109.6750	0.0091	96700.45	+562.18		+0.58%
Mexican Pesos	+0.22%	01/10-10:25	10.9467	0.0914	9651.71	+4.82		+0.05%
Russian Ruble	+0.33%	01/10-10:20	24.4010	0.0410	21514.36	-11.52		-0.05%
S.African Rand	+0.54%	01/10-10:25	6.8633	0.1457	6051.33	-16.28		-0.27%
Swiss Franc	+0.68%	01/10-10:25	1.1076	0.9029	976.53	-4.02		-0.41%

The dollar is held fairly firm yesterday and the Yaun was a bit lower. The Euro is still holding well at $1.4746. The Bank of England meets today to consider interest rates. It is nestled rather uncomfortably on the horns of a dilemma. To handle the melt down in housing, the rates need to be lower, but to combat inflation higher rates are needed. The European Bank meets soon and should leave rates unchanged, even though the 3.1% inflation exceeds the maximum allowed under the treaty. Perhaps, it will bite the bullet and raise rates a bit. That would be very positive for the Euro. We shall have to wait and see.

We must keep reminding ourselves that all of these are but paper or computer blips and have value in relation to each other and the acquiescence or desire of people to use them. There is a growing drift away from the dollar. As the price of gold increases, there should be growing interest in owning gold as a safe store of wealth.

Rest assured that the Sovereign God of all, Who loves and cares for His people is in control of all and is working for the eventual good of His people. Praise Him daily!

Best, Doug