Thoughts on Markets

Friday, December 05, 2008

Precious Metals Pushed Down Again!

Above are the graphs on silver and gold. Notice on the gold graph how the price of gold was dropped at almost the same time on December 3rd and 5th. Does that seem strange to you? It does to me. I believe that is not normal market action and is due to intervention into the market by big money. The same is true of silver, but is not a pronounced as with the price of gold.

Currently, we see gold at 743.60 and silver at 9.23. Both are on down ticks.

This has pushed the price of mining stocks downward. I was stopped out of the trading stock of HMY yesterday and DROOY today. I have placed orders to buy VGZ @ 0.86 (one order was executed just now at 0.86). Now we want the price to go above $1. It may even do so today!

At this time, DROOY is 3.98; HMY 7.91, and VGZ 0.8799. All are in good buying range for me, so I will be adding more.

Remember to make your own decisions based upon your financial situation and risk tolerance.

From Seeking Alpha December 4:

"The Manipulation of Gold Prices

There is no other leveraged commodity market where short sellers increase their positions, materially, as the price rises, and increase them even more when prices are exploding, except gold and silver. The reason traders don’t normally do that is that it exposes short sellers to unlimited liability and risk. Yet, in both March and July 2008, and on countless occasions over the past 21 years, vast numbers of new gold and silver short positions were temporarily opened up, with the position holders seemingly unconcerned about the fact that precious metals had just risen exponentially, and that there was a very real potential they would bankrupt themselves with unlimited upside potential. Normal traders would not expose themselves to such unlimited risks."

The article is HERE.

From Resource Investor:

Companies Urged To Come Clean On Pay Deals For Executives
By Renée Bonorchis, 04 Dec 2008, 11:27 AM South Africa is still going to see some large executive pay packages coming through next year, despite the widespread downturn in markets and company profits, says Deloitte Consulting remuneration specialist Nick Icely.

See the article HERE.

It seems that executive pay is out of control around the world, not only in our automobile industry and financial institutions.

From Mine Web this morning:

Top Canadian resources investment strategist warns miners of nasty quarter ahead

Friday , 05 Dec 2008
The global mining industry must forget about recent highs in resource prices, MacKenzie Investments Frederick Sturm advises, because “they will not be seen for years.” However, gold may be the exception.

Read the article HERE.

More on the race for lower interest rates from The Daily Pfennig: "The BOE cut 100 BPS (1%) from their rates, while the ECB opted for 75 BPS (3/4%)... I really do feel as though the BOE has taken a page from the U.S. and Japan's book on how to deal with all this, and is on the road to zero percent rates. I don't feel the ECB will go there... While they may go lower in the Eurozone, I don't think ECB President Trichet, has any intention of following the "Japanese model"...

Trichet said something yesterday that made me believe that he won't become Trichet-san... Trichet said that, "we mustn't confuse Deflation with Dis-inflation" He went on to also say, "The ECB will NOT get trapped at rat levels too low""

The race to the bottom continues in full swing. Expect more of this.

Praise the Lord daily for His wonderful provision to His people and through them to others. As we go into the Christmas season, let us remember Who it is that gave us this joyful time. When we wish others Merry Christmas, we are in fact wishing them blessings from the Sovereign Ruler of all. All true, lasting joy comes through the Lord Jesus Christ and is only in Him. Praise Him daily and serve Him in every walk of life.

Best to each, Doug


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