Thoughts on Markets

Thursday, October 07, 2010

Gold exceeds 1360, but seems to be capped again. Buying Opportunity????

Folks,
All eyes are on the dollar as it continues its decline. This morning the Canadian Dollar costs $0.9915USD; the Australian Dollar 0.991; the Swiss Franc 1.043. That indicates a severe loss in purchasing power of the USD this year and particularly the last 30 days.

At the same time Gold has moved to 1352 (was 1360+ this am) and Silver has moved to 23.29 as of now. Both are presently up.

This says to me that the US Dollar is losing international following. This will greatly impact upon the cost we will have to pay for goods and services whether domestic or foreign. We must become more diligent in conserving what dollars we have. It is time for austerity and very careful shopping. We must now begin to reduce spending.

It is also important to reduce debt and develop emergency funds to cover those unforeseen items which come upon us from time to time.

For me, it means to concentrate most savings and investments in gold, silver, and mining stocks. I, also have Swiss Franc and Norwegian Krone. You must weigh the economy and your situation and make your own decisions. My decisions are not necessarily the same as yours.

Now, let's turn to the current markets.


From MineWeb.com:

Fiscal foolishness creates gold and silver investment opportunities - McCoach
Successful precious metals entrepreneur Greg McCoach, believes in holding physical metal and silver is his main pick. Interview with The Gold Report. How true this is! Remember he is a metal dealer and has a vested interest. HERE.

From MineWeb.com:

Gold set for strongest weekly performance in 6 months
Investors expect the Fed to prop up the economy through a resumption of quantitative easing took a toll on the dollar. This looks to be true. A word of caution. We have yet to have any real correction since the last rise started. Assets seldom go up in price w/o some correction. HERE.

From MineWeb.com:

Gold only as strong as the risk of sovereign default
As gold continues to hit record highs some analysts warn that the conviction in prices of the yellow metal should only be as strong as those for where interest rates are likely to go. The metals remain the one sure safe place for wealth in view of the current world wide paper currencies. HERE.

From Bloomberg.com:

Geithner Calls for Currency Cooperation Amid Rush to Weaken
Treasury Secretary Timothy F. Geithner called for cooperation to rebalance currency markets and warned of a “damaging dynamic” of competitive weakening that could limit global growth.
“More and more countries face stronger pressure to lean against the market forces pushing up the value of their currencies,” Geithner said in a speech yesterday in Washington. Currencies are “inherently a multilateral issue” that is “much easier to solve if countries come together.” Doesn't this sound like he is bashing China again? That is a case of the pot calling the kettle black. It is a dangerous theme. The Chinese could get riled up and retaliate. HERE.

From MineWeb.com:

Will South Africa nationalize its gold and platinum mines?
The possibility of possible nationalization of South Africa's key mining sector rumbles on. Is this likely to happen? Julian Phillips looks at the politics behind the rhetoric. It seems not likely for the time being, but national interest is paramount to international. Who really knows? HERE.

Watch Larry Edleson's Weekly Update on UncommonWisdom.com: The Breakdown of Monetary System. HERE.

Here is the GLD graph from StockCharts.com. GLD is a proxy for gold which is updated during the day. Note that it shows it is down a bit for the day. This remains a very strong graph and will continue to be strong without intervention.
I am going to move to the close, because the metals are a bit off from their earlier highs and I may have a small buying opportunity. I will send emails on any trades I make.

Here are the miners from Scottrade.com:


Here are the currencies from Kitco.com;

Some current prices: FVITF  3.29 (Off a bit, but remember I bought on Monday or Tuesday for 2.98-3.00); SILA 0.825 (Up a bit); TLT 105.01; DOW up 1.21 to 10968.63; SPX up 0.56 to 1160.53; Gold off 3.80 to 1340.70; Silver off 0.22 to 22.97.

Here is the 3-day Gold Graph from Kitco.com: It appears that the boyz could not stand for it to be at the 1360 level, so they got scared and intervened.
Watch closely to day. If I act, I will send emails. 

Best to each, Doug








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