Metals Hammered Yesterday - Rebounding Today

The Lord provided another day of opportunity for us as the price of metals was hammered down severely. I am pleased that He is in control.

Speaking of control, can you imagine the impact on the banking industry of governmental control of the banks? I can, and wonder how much the political impact will be. Can't you just imagine the politicians demanding special treatment of borrowers within their home states or loans to their favorite industries. How often do we find that government does anything correctly and efficiently? Governments always seem to believe that they know better than our Creator God and His word. That generally has spelled out DANGER!

Yesterday gave us a reasonable buying range for Helca Mining. I added a number of shares. Early today, we were able to buy at 3.09 and some at less. HL has broken below the bottom line of the trough which is not a great technical sign, but it still remains above both 50 and 200 day moving averages. And, the 50 day average seems to be coming upward to possible cross above the 200 day average. Were it to do this, we would be encouraged about the future movement of the price upward.
The miners are still doing well over all. However, they are approaching the lower boundary of the upward trend trough.
Both silver and gold are moving upward after yesterday's swings of the hammer by the bullion banks. That is good news for the metals. Gold is on the verge of yet another run at the 1,000 level and silver is running toward 16 again. Both have moved up very strongly.

Here is a look at Bloomberg's Baltic Dry Index. It is climbing showing an increase in the international shipping. I wonder how much of this is due to China's importing of natural resources. By the way, China's proclivity for natural resources is helping the currencies of the resource rich countries: Australia, Canada, New Zealand, Brazil, etc. Also, I wonder if the index measures the number of tankers which are being used for storage of petroleum now. It would be amazing were this an indicator of greatly increasing world wide economic activity.

From Guardian.co.uk:

Rebel Labour MPs seek signatures for 'Gordon must go' letter

Backbenchers believe they can persuade up to 80 Labour MPs to sign letter, which could be delivered to Downing Street as early as this evening

A group of rebel MPs have begun soliciting signatures for a round robin letter calling for Gordon Brown to step down, which they plan to hand to the prime minister after the results of the local and European elections have come in on Monday morning.

The Guardian has learned there are reports that the backbenchers think they can reach 70 or 80 signatories, crucial within Labour party rules that require 20% of the parliamentary party to mount a challenge – 70 MPs. Read it HERE.

The British have a means of replacing their government leaders when they go against the rights or principles of the opposition. This may not always be the best way, but there are advantages, because a government out of favor with the people can be replaced without having to wait until the term is over.

From EconomicTimes.IndiaTimes.com:

Fund Managers can become farmers: Jim Rogers

4 Jun 2009

At one stage we were inundated with gloomy forecasts, which were further reinforced by the IMF and World Bank. And then suddenly stocks surged — something most were not prepared for. How risky is the market today?

Central banks all over the world have printed huge amounts of money, and the real economy is not strong enough for all this money to be absorbed... so, it's going into stocks and real assets such as commodities. It's a mistake what they are doing. It's giving short-term pleasure, but there's long-term pain as we are going to have much higher inflation, much higher interest rates and a worse economy down the road.

The American bond market is already beginning to go down dramatically as people realise that the American government has to sell huge amount of bondx, and secondly, there is going to be inflation, serious inflation, as it was always in the past when you had governments printing huge amounts of money. Read it HERE.

Both Jim Rogers and Bill Gross have been warning of serious inflation ahead. They have been suggesting that we diversify out of dollars before the sovereign wealth funds and central banks do in mass. We should be beating the crowd.

From Mineweb.com:

Gold price stutters again falling back from the $980s

Dollar strength knocks the gold price as gold doldrums approach, but positive words at the World Mining Investment Congress.

Author: Lawrence Williams
Posted: Thursday , 04 Jun 2009

LONDON -

As we pointed out here a few days ago, the $970-990 levels seem to be dangerous territory for the gold price. The past few occasions when gold has reached that level have been followed by sharp falls and could this time follow that path too?

Yesterday the gold price slipped sharply falling at one time to close to $960 almost $30 below its peak of close to $990 achieved only 13 hours earlier. But, much of the metal's appreciation recently had been on the back of a weak dollar and stronger oil price and the falloff accompanied a reversal in the dollar, and oil's, fortunes. The focus will now be on whether the dollar can maintain its stronger move, or whether it will move back again onto its recent downward path, and if the latter there will likely be a recovery in the gold price. However if the dollar continues its slightly stronger trend against other major currencies, further gold price falls could be seen. Read it HERE.

Gold will make it through the $1,000 barrier by the end of the year. The gold cartel is still in control, but must be getting a bit more cautious. The tables can be turned on them were the sovereign wealth funds of governments around the world start into precious metals big time. The cartel might be faced with tremendous losses were they to have to come up with the metals to cover their shorts.

Gold is up 15.70 to 978.30 and silver up 0.37 to 15.68. Some violent moves, eh?

Best to each, Doug