Thoughts on Markets

Friday, January 15, 2010

3-Day Weekend Ahead - Markets are Confusing

The intervention into the precious metals noted with the arrows on the Silver graph are virtually the same at the same time on the Gold. Both the metals are in a broader trading range. It may be that the prices of the Silver Eagles and Maple Leafs will be better with the volatility. I believe we should be accumulating both of the silver coins as rapidly as possible. Also, accumulation of gold coins is important as the prices of almost all things we use are going down in relation to the prices of the metals, as Russell indicated in his Dow Theory Letters. He has been around for quite a while and sees things in these confusing markets which others ignore or just fail to recognize.


From MineWeb.com:

Central Banks have been net purchasers of gold since the second quarter of 2009

The survey estimates net sales from the sector were down 90% in 2009 compared to 2008.

Author: Rhona O'Connell
Posted: Thursday , 14 Jan 2010

LONDON -

The latest interim Update to the GFMS Gold Survey 2009 reports that, on a quarterly basis, the official sector became a net purchaser of gold during the second quarter of 2009 and has remained so since. GFMS expects that IMF sales will augment official sector sales this year, but that modest purchases elsewhere will constrain volumes overall. The Survey estimates that net sales from the sector were down 90% in 2009 against 2008 levels, although the study does warn that estimates may be revised in the future as a result of the lag that often exists between central bank activity taking place and subsequently being identified. Read it HERE.

From MineWeb.com:

More money to flow into commodities in 2010 -Gresham

The New York based fund manager says the very strong momentum seen in 2009 is still intact

Author: Christopher Johnson (Reuters)
Posted: Thursday , 14 Jan 2010

LONDON (Reuters) -

Investors will allocate even more money to commodities this year as they seek to spread risk away from more established investments such as equities, New York-based fund manager Gresham argues.

Commodities such as gold, oil, copper, as well as softs like sugar, boomed in 2009, drawing in tens of billions of dollars in investments from pension funds and wealth managers hit by the financial crisis and global economic downturn. Read it HERE.

Good News about Hecla Mining from MineWeb.com:

Hecla forecasts 10m-11m ounces 2010 silver production

With record production, strong metals prices and repayment of all debt, Hecla Mining CEO Phil Baker considers 2009 to be "an exceptional year".

Author: Dorothy Kosich
Posted: Friday , 15 Jan 2010

RENO, NV -

Hecla Mining Company Thursday said it achieved record silver production of 10.9 million ounces in 2009, a 26% increase on its 2008 number.

The company forecasts 10 million to 11 million ounces of silver production this year. If metals prices remain at their current levels, Hecla expects cash costs this year to be below $2 per ounce of silver produced.

Production records were also established for lead with 44,000 tons and 80,000 tons of zinc produced in 2009. Read it HERE.

From TownHall.com:

First, the Good News ...
by Oliver North

WASHINGTON -- There is no doubt that the terrible earthquake in Haiti -- the worst disaster in the history of the Western Hemisphere -- is a tragedy of profound proportions. The good news is that the "first responders" on-scene were wearing American uniforms. The U.S. Coast Guard -- motto: "Semper Paratus" (Latin for "Always Ready") -- was "firstest with the mostest" and began providing emergency assistance within hours of the Tuesday night quake. . . . .

Now for the bad news. Yemen is a much bigger problem than anyone ever believed before Christmas Day, when Umar Farouk Abdulmutallab tried to bring down Northwest Airlines Flight 253 with a bomb in his underwear.

Since then, we have learned that the young Nigerian was not a "lone wolf" or an "isolated case" -- as we were initially told by the Obama administration. We now know that there are in fact many more al-Qaida-trained terrorists in Yemen preparing for attacks on Americans -- there, elsewhere around the world and here at home. We also have learned that the O-Team -- so quick in sending much-needed help to Haiti -- is slow off the mark when it comes to dealing with this threat. There is much more to this article and it is worth a good read HERE.

From The Los Angeles Times:

Freight trains carry 20% less cargo in 2009 than in the previous year

The drop is a dramatic reminder of the brutality with which the recession cut demand for coal, lumber and other goods that make up the backbone of the economy.

The nation's railroads had their worst year in decades in 2009, a dramatic reminder of the brutality with which the recession damped demand for coal, lumber and other goods that make up the backbone of the economy.

Freight trains carried 20% less cargo last year than in 2008, according to a report by the Assn. of American Railroads, and the industry shed nearly 21,000 jobs.

The 12-month period was the slowest since the association began keeping records in 1988. Read it HERE.

James Turk from fmgr.com:

Hyperinflation Watch

January 14, 2010 – The US government’s deficit grew again in December 2009. The difference between its outlays and receipts as presented on the following chart has now reached a new record. Read it HERE and see the great graph.

Miners from Scottrade.com:
Currencies from Kitco.com:
Some other prices: FVITF 2.52; BYDDF 8.19; KENS 0.027; Gold off 10.30 to 1131.20; Silver off 0.23 to 18.44; DOW off 117 to 10594.

I am tempted to add to my portfolios with more BYDDF. I see higher prices this year. Of course, with the general market down, we could see a few days or weeks of lower prices, but I want to have more of this stock before it resumes its upward climb. The next leg up should be a big one, particularly as the BYD electric cars show up in the auto show here.
Never make an investment that you will over worry about. You mental and physical health are very important. You must assess your own risk tolerance, then plan your investments wisely, commit them to the Lord and rest in the fact that He will provide the results. Praise Him daily and diligently study His word for guidance in every area of life.

Best, Doug




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