Thoughts on Markets

Tuesday, February 09, 2010

Gold, Silver, DOW Up Early Today

Take special note on the videos of Ted Butler and Ron Paul, below, today. Both are important and each in his area of specialty tells it like it is.

Gold and Silver have recovered a bit this morning. The graphs are similar with a big spike upward just before New York opening and then the caps were back on, but both are holding onto small gains.


Converting paper to gold - a change in market perception

Not only does Chris Potter stand by his claim that India's big gold buy late last year was a game-changer, it's a 21st century take on the classic alchemist's quest of old-transforming lead into gold - or in this case paper into gold. Interview with The Gold Report.

Author: The Gold Report
Posted: Tuesday , 09 Feb 2010


The Gold Report: Just after the Reserve Bank of India (RBI) bought 200 tons of gold last November, you wrote an article for Kitco entitled Game Changer, highlighting previous transactions such as China's Central Bank 99-ton purchase gold in '02 and Argentina's 55 tons in '09. Since no other central bank has stepped forward in the months since India's announcement, was that really a game changer?

Chris Potter: I think so. For as long as I can remember, gold bears have warned that central bank gold is a massive source of supply that is capable of overwhelming any conceivable demand scenario. They said that this would make it very difficult for the gold price to rise significantly. It's been an easy argument to make because one fifth of all the gold ever mined is sitting in central banks' vaults. Read it HERE.

From Ted Butler interview video is an important view HERE.
Nearing the end of precious metals correction?? We will have to see what the market tells us.


Gold and the dollar - the fear factor

Gold and the dollar move inversely to each other up and down as investor fears move from one perceived safe haven to another.

Author: Frank Holmes
Posted: Tuesday , 09 Feb 2010

U.S. Global Investors -

The U.S. dollar was up last week against the euro out of fear of how debt problems in Greece and elsewhere in Europe will be resolved, and as a result gold had a tough week.

The dollar's rally appears to be a short-term safe haven move, rather than a response to improving economic conditions in the U.S.

In fact, Friday's report of a net loss of 20,000 jobs in December (the expectation was for a net gain in employment) and that many thousands more would-be workers have given up looking for jobs is evidence that the economy remains somewhat weak. Read it HERE.


WORLD FOREX: Swiss Franc Sinks; Central Bank Spotted Selling

TOKYO (MarketWatch) -- The Swiss franc fell to multi-month lows against the euro and dollar in Asia Friday as market participants said Switzerland's central bank made a rare and aggressive intervention to curb its currency.

The euro spiked around 0300 GMT to CHF1.4905, its highest since Dec. 28, from CHF1.4635. The dollar jumped to CHF1.0800, its highest since Aug. 18, from CHF1.0670. Read it HERE.

The Swiss Franc is one of my favorite currencies. All nations are debasing their currencies in hopes that it will improve their exports.


Fears of 'Lehman-style' tsunami as crisis hits Spain and Portugal

Julian Callow from Barclays Capital said the EU may to need to invoke emergency treaty powers under Article 122 to halt the contagion, issuing an EU guarantee for Greek debt. “If not contained, this could result in a `Lehman-style’ tsunami spreading across much of the EU.” Read it HERE.

Many in the news keep reminding us that California has a large GDP than the PIGS and it is bankrupt, but receives no mention in the news. Why is there so much interest in these small countries. It could be a detraction from our homeland problems.

From Ron Paul on Ron Paul - H.R. 4248 Free Competition in Currency Act
See the video HERE.


Gold Prices: Relief Rally in Futures

Gold for April delivery was adding $13.30 to $1,066.10 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,074.30 and as low as $1,061.80. The U.S. dollar index was slipping 0.21% to $80.27. Read it HERE.


China builds stakes in Canadian mining companies

China Investment Corp., the Asian economic superpower's hulking $200-billion (U.S.) sovereign wealth fund, has been quietly accumulating stakes in resource firms including Canada's Kinross Gold Corp. Read it HERE.

China continues to expend their Sovereign Wealth Fund for commodities around the world.

Miners from
Currencies from
Here are some of the current prices: FVITF 2.14; BYDDF 7.35; XDSL 0.026; KENS 0.02 ( I am selling KENS as it has not acted well - another bad choice); DOW up 146 to 10055; Gold up 11.50 to 1072.90; Silver up 0.28 to 15.26 (Silver Eagles should still be available at about 17.65 or so, if you want some.).

Note that the miners have yet to de-couple from the general market as they will at some time in the future. Then the fireworks begin. Until then, volatility with the frustration of such markets. For the time being, both silver and gold are looking temporarily healthy as are the miners. Expect more on the downside though from time to time. There are always sandy spots and often quick sand along the way.

Trust in King Jesus as He never changes, but is the same yesterday, today, and forever. That is unlike men who are continually changing.

Best to each, Doug


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