Thoughts on Markets

Wednesday, February 03, 2010

Global Warming Hoax - Gold & Silver Today

The Lord is in control of everything and everybody. We live in exciting times and are often confused by what we see about us in the world. It is a great peace to know King Jesus and rest in His wisdom as He moves all things together for His glory, for the spread of His kingdom on earth, and for the eventual good of His people. Praise Him daily for His providential care.

Gold continues to drift along showing nothing spectacular, at all. We may have to wait a while longer for it to really come alive and sprint upward.

From the Daily Pfennig: "The Euro moved back above the $1.40 handle overnight after it was announced the EU would back Greece's plans to cut its budget deficit. European Commission President Jose Barroso said the EU is endorsing the Greek program and relayed confidence in the Greek authorities. The move came after the Greek government announced more measures to reduce the shortfall. The EU will demand monthly updates from Greece on its progress in cutting their deficit from the current 12.7% of GDP down to the EU's 3% limit by 2012. The approval of the plan by the EU does not mean the union will be backing Greek debt with loans and does not insure against a default, but only allows Greece to continue to be part of the EU despite their large deficits."

This news evidently sent the dollar packing. The down trend in the dollar is certain in the longer term, but this was a real bump in the upward dollar's road.

From Ed Steer's Gold and Silver Daily: "Well, the open interest numbers for Monday's big move were exactly what I was hoping to see. In the face of a 2% rise in the gold price, gold's o.i. rose an insignificant 105 contracts. What that means is that it's almost a certainty that the buyers driving up the price were the bullion banks themselves... they did this by covering some of their short positions and also by buying long positions to cover their tracks. Volume was a pretty light 173,450 contracts. Total open interest in gold is now down to 478,576 contracts.

In silver, open interest actually fell 1,774 contracts... which means that even though the bullion banks were driving up the price by going long themselves... they actually covered more of their own short positions... which is why silver o.i. fell instead of rose. Volume was a smallish 37,459 contracts. But total open interest is still up there at 121,619 contracts.

This is the first tentative sign that the bullion banks might be inching towards the exits. All of the above data will be in Friday's Commitment of Traders report... and it should be wondrous to behold."

Silver was hit again this morning. It seems that silver is receiving the major interest of the intervention of late. Wouldn't it be wonderful if the bullion banks did quit the intervention game? Wow! That will be the day when we see the true value of the precious metals.

From MineWeb.com:

U.S. Mint silver, gold, platinum coin revenue hits $1.7bn record high in FY 2009

Despite the inability of the U.S. Mint to acquire sufficient blanks, both gold and silver bullion coins smashed sales records due to unprecedented investor demand in FY 2009.

Author: Dorothy Kosich
Posted: Wednesday , 03 Feb 2010

RENO, NV -

Uncertainty surrounding traditional investment and inflation concerns drove investor demands for bullion coins to exceptional highs last year, the U.S. Mint said in its recently issued annual report.

The U.S. Mint sold 27.6 million ounces of gold, silver and platinum bullion coins in fiscal year 2009, a 132.3% increase over annual bullion sales since FY 2005.

Total bullion revenue for the mint achieved a record high of $1.7 billion in FY 2009, a 78.65 increase from $948.8 million in FY 2008. Read it HERE.

There is interest in the precious metals as this testimony proves. The masses may see it in the not too distant future.

From Bloomberg.com:

U.K.’s Royal Mint Doubles Production of Gold Coins

By Thomas Biesheuvel and Nicholas Larkin

Feb. 2 (Bloomberg) -- The U.K.’s Royal Mint, established in the 13th century, more than doubled gold-coin production last year as investors sought to diversify their assets and hedge against a weaker dollar and accelerating inflation.

Output rose to 125,469 ounces from 46,315 ounces a year before, according to data obtained by Bloomberg News under a Freedom of Information Act request. Gold averaged $974 (612 pounds) an ounce last year. Fourth-quarter production rose 54 percent to 25,078 ounces, the data show. Read it HERE.

The precious metal interest is not limited to the Chinese. It is becoming world wide.

Paul Volker on the banks and their investment business. See this video HERE.

He hits the problems with many financial institutions. It is worth a close viewing.

From BusinessInsider.com:

So, How Do You Think This Movie Will End?

These two charts tell you pretty much all you need to know about the state of the US economy. They also, unfortunately, provide some clues as to how this movie will end.
This is a good read and the charts are awesome. See it HERE.

From MineWeb.com:

The impact on gold of the dollar and the U.S. economy

Gold should remain the ultimate safe haven as the U.S. economy continues to stutter and global currency markets remain in turmoil.

Author: Jeff Nichols
Posted: Wednesday , 03 Feb 2010

NEW YORK (American Precious Metals Advisors) -

It's now nearly two months since gold registered an all-time high of $1,227 an ounce, following a five-month run during which the metal rose more than $300 an ounce. From a long-term perspective, this is a remarkable 380 percent trough-to-peak gain from its early 2001 cyclical low point of $255.

Gold's strength last year reflected a number of factors: (1) record worldwide private investment demand (thanks, in part, to rising inflation expectations, pent-up demand from China, and the popularity of new gold investment vehicles in various markets); (2) net official purchases (after two decades of net selling) as some central banks sought insurance against further devaluation of their dollar-denominated assets; and (3) at times, a weaker U.S. dollar. Read it HERE.

This is an interesting read.

From MineWeb.com:

Pent up demand gobbles gold stocks

Listed gold stocks jump as much as 40% overnight, as dollar gold bullion records its best daily gain in three months.

Author: Barry Sergeant
Posted: Tuesday , 02 Feb 2010

JOHANNESBURG -

Heavyweight listed gold stocks around the world have experienced stock price declines averaging 24% in just a few months, most from when dollar gold bullion spiked to a record nominal USD 1,226.56 an ounce early in December, but were in huge demand on Monday when bullion recorded its biggest one day advance in three months, shifting from around USD 1,080 to over 1,105 an ounce. The dollar-related rally continued on Tuesday, with bullion around USD 1,112 an ounce, and approaching USD 1,115. Read it HERE.

The response of the mining stocks has been subdued but upward this week. One would expect them to go much higher as the precious metals have increased. Silver has lagged gold again and had a Ho Hum day yesterday.

From TownHall.com:

Global Warming Update
by Walter E. Williams

John Coleman, founder of the Weather Channel, in an hour-long television documentary titled "Global Warming: The Other Side," presents evidence that our National Climatic Data Center has been manipulating weather data just as the now disgraced and under investigation British University of East Anglia Climate Research Unit. The NCDC is a division of the U.S. National Oceanic and Atmospheric Administration. Its manipulated climate data is used by the Goddard Institute of Space Studies, which is a division of the National Aeronautical and Space Administration. Read the article HERE.

What a fraud global warming has been! It has been deceptive from the git go.

From Newsmax.com:

Grassley Slams Obama's Budget, Tax Increases


By: Dan Weil


Sen. Charles Grassley, R-Iowa, doesn’t think too much of President Obama’s $3.8 trillion budget proposal for fiscal 2011.

“Washington is an island surrounded by reality,” he told Newsmax.TV’s Kathleen Walter.

“This budget, as a document coming from Washington, DC, is a perfect example of not being in the real world. The real world is that taxpayers out there throughout grass roots America haven’t seen big increases like the federal budget has.” Read the article and see the linked video HERE.

Here are the miners from Scottrade.com:
Here are the currencies from Kitco.com:
Here are some current prices: FVITF 2.3843; BYDDF 7.84; XDSL 0.028; GDXJ (ETF of Junior Miners) 23.85; Gold off 3 to 1110.40; Silver off 0.30 to 16.40; DOW off 41.19 to 10255; S&P off 7 to 1096. Not an exciting day thus far.

Best to each, Doug


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