Precious Metals Consolidating for Another Sprint

Gold is holding strongly, thus far, around the 1090 price. This is very bullish. I have been thinking correction or consolidation before going higher. It seems that it is consolidating here for the next move.
Silver, though lagging gold, is holding in the range of just below 17.40 to 17.60. This could be another example of consolidation for a higher move. An article, below, predicts silver at $20 in the near future. Will it make it? Hang on, we are in a strongly bullish mode now.

Gold has made a strong bullish move and it looks to be headed higher. Notice that the price is at the top of the trend line trough. Will it break through 1100? That is the big question. From a technical perspective, there seems to be no doubt that it will. The Lord knows, but we will have to wait and see what the market says.


From Chuck Butler in The Daily Pfennig: "The FOMC was not a 2-day meeting after all! Just one day, so no time to pull out the board games and cards...

I nailed that FOMC statement yesterday... WOW! You might begin to think that I have some inside info on the Fed Heads, the way I've been able to basically call every move they've made since the beginning of this whole meltdown in August of 2007! But that's not important here... The important thing is that the Fed said that "economic growth is not enough to hike rates, and therefore they will keep interest rates at near zero for an "extended period"...

Hmmm... Where have I heard that before? Any way, I thought that by continuing to use the words "extended period" that the dollar would get pummeled... And momentarily, it looked as though it might, as the offset currency to the dollar, the Big Dog, euro, raced to trade above 1.49... But a funny thing happened on the way to the forum, and the invisible hand reached down and reversed this move in a NY Minute! The work of the PPT? Probably... The Plunge Protection Team, probably stepped in to keep the dollar from a free-fall... That's my take on it any way!"

The PPT (boyz) may not be able to spur the dollar on higher. See the next article.

From CNBC.com:

Gold Spells Trouble for Greenback: Charts

The value of gold and silver are on the rise, but this spells trouble for the declining dollar index which could push as low as 66 points, according to Chris Zwermann, strategist from Zwermann Financial. Read & Hear it HERE.

From Bloomberg.com:

U.S. to Sell $81 Billion in Long-Term Debt Next Week

Nov. 4 (Bloomberg) -- The U.S. Treasury Department said it plans to sell a record $81 billion in its quarterly auctions of long-term debt next week and will replace the inflation- protected 20-year bond with a reintroduced 30-year security.

The Treasury will auction $40 billion in three-year notes on Nov. 9, $25 billion in 10-year notes Nov. 10 and $16 billion in 30-year bonds Nov. 12. The amounts were in line with the median forecast of $80 billion in a Bloomberg News survey of nine analysts. Read it HERE.

Is the Treasury dreaming or will the Fed come in as the buyer of last resort to save the auction?

From GATA:

Fed statement may let gold continue upward course

By Allen Sykora
The Wall Street Journal
Wednesday, November 4, 2009

Federal Reserve officials did not offer any hints Wednesday on when they might start to tighten monetary policy for the foreseeable future, which may well mean a green light for further gains in gold.

Analysts said there were at least some concerns ahead of time that the Fed language might have changed just enough since the last meeting to be seen as the first sign that policy-setters might start tightening down the road as the economy improves.

But this did not happen, they said, with the statement after a two-day meeting saying conditions "are likely to warrant exceptionally low levels of the federal funds rate for an extended period" of time.

"The Fed inaction allows gold to continue on course," said Dave Meger, director of metals trading at Vision Financial Markets. Read it HERE.

It would really be something if the Fed (boyz) would back off and let the precious metals reach their actual market value. We need to be on board when that happens. Hang tight, we are in for a real ride - on a roller coaster. Lots of fun! Do you enjoy roller coasters, as I do? Of course, I would rather be on a physical one rather than a volatile market one.

From MineWeb.com:

Yamana Gold 3Q09 revenues hit by derivatives loss

Derivatives loss sends Yamana net profit spiraling downward by 59% during the third quarter.

Author: Dorothy Kosich
Posted: Wednesday , 04 Nov 2009

RENO, NV -

Yamana Gold revenues fell 59% during the third quarter of this year from $150 million and 21 cents per share for the third-quarter 2008 to $60.8 million and 8-cents/ sh.

The Toronto-based company reported a $21 million loss of derivatives for the third-quarter 2009, compared to a gain of $138.9 million for derivatives for the same quarter a year ago.

During the third-quarter 2009 the company realized a foreign exchange gain of $15.1 million. Read it HERE.

AUY seems to be rebounding nicely even though it took this hit. Note the breakout in spite of the bearish inverted "W." Many miners show the same break out.

Looks like AUY got hit pretty hard.

From Bloomberg.com:

India Shows Hedge-Fund Savvy With Huge Gold Buy

William Pesek

Nov. 5 (Bloomberg) -- Barack Obama and Timothy Geithner must be as annoyed as they are bewildered.

Didn’t India get the memo? Developing nations are supposed to keep their excess cash in Treasuries, the U.S. president and his Treasury secretary are no doubt thinking. Gold? That relic of the past that doesn’t pay interest or dividends and can’t be eaten? A fool’s game best left to the dinosaurs out there.

India is going its own way with a $6.7 billion gold purchase. The transaction turned heads in markets. It should do the same in capitals from Beijing to Washington. Very Important read it HERE.

From MineWeb.com:

World's 100 hottest gold stocks

Gold stocks of all sizes are in good demand; buying remains selective in the face of booming dollar gold bullion prices.

Author: Barry Sergeant
Posted: Wednesday , 04 Nov 2009

JOHANNESBURG -

Dollar gold bullion traded within whiskers of US$1,100 an ounce on Wednesday, on factors that have been canvassed at length, ranging from India buying metal from the IMF, to the contrarian move of the metal to a neutral to stronger dollar, but which listed gold stocks are drawing the most buying attention?

Looking at stocks with a market value of at least US$10m, junior gold stocks are among the cream, with prime mention going to Ventana Gold, which has registered a stock price gain of more than 26,000% (yes, twenty six thousand percent) in less than 12 months. Read it HERE.

From MarketWatch.com:

Is India clearing the way for gold 'moonshot'?

Commentary: India's IMF bullion purchase excites the gold bugs

Peter Brimelow

NEW YORK (MarketWatch) -- Does India like gold, or dislike Washington's anti-gold dollar domination?

Let Mary Anne and Pamela Aden tell the story. Their Aden Forecast first came to fame in the great gold bull market 30 years ago. The Adens are careful and adroit traders, and have a strong track record according to Hulbert Financial Digest, but they were speculating that gold might ultimately reach $5,800 when I last looked. Read it HERE.

From MineWeb.com:

Current silver:gold ratio suggests silver very undervalued

This article suggests that silver is undervalued compared to gold by anywhere from 10% to 50% based on historical gold to silver price relationships.

Author: Lorimer Wilson
Posted: Thursday , 05 Nov 2009

TORONTO -

With primary secular bull or bear trends easily running from 10 to 20 years of the average investor's 40 year investing lifespan it is crucial to identify optimal accumulation points within these primary trends to avoid prolonged periods of under-performance and potentially negative returns and to avoid dramatically reducing the number of productive years in which to build one's fortune.

Within these trends are zigs and zags, up and down, and we can ride these medium term and short term waves to profits by either buying what is going up and/or shorting what is going down. As such, it is critical to step away from all the noise and clutter that passes for knowledge and take the time to gain perspective on where the market is in terms of the ‘big picture' and to determine which investments are in a powerful unfolding trend so that an informed investment strategy can be developed and implemented. Read it HERE.

Here are the miners from Scottrade:

Here are the currencies from Kitco. com:
Hang tight. I did not get all of my sell orders off on BULM, so I put them in again. BULM last 0.65; AMNP 0.925; BYDDF 9.41; HLAA (HL Jan 2010 5 Call) 0.77; DOW +176.39 to 9978+; gold 1092.40, and silver 17.49.

These are times of some confusion which demand that we are patient. The market will reveal the direction to us soon. I suspect we will see higher precious metal prices very soon. We must rest in the fact that our God is in control. After all, it is He who has made us and is managing every thing in accordance with His will. King Jesus rules and we are to follow His word in every area of our lives. Praise Him daily.

Best to each, Doug