Good morning and a happy Friday to all,
Asia was off as expected, but not horrifically so. Japan -2.1%, Korea -5.7%, Taiwan -3.6%, HongKong -1.4%, China -.4% and India -1.2%. Most of Euroland is off between 1.5% and 2%. Our futures are off a 100 on the DOW, so not nearly as nasty as yesterday.
As for the metals, they're getting hammered again. Gold is at 1690, silver 32.82, platinum 1635 and palladium 6.50. The gold/XAU ratio is extremely high at 8.57 and the gold/silver ratio has spiked to 51.48. The XAU is at 197.11.
According to one pundit, 1705 is support for gold but the Aden Sisters have it at 1650 and 1420 and they've always seemed to be fairly spot on. Regardless, this is your buying op for physical metal. If you're not big on Liberties or Buffalos, buy some gold jewelry.
Looks like Greece is going to go bankrupt and it looks like our Fed has taken the punch bowl away. Considering that the punchbowl has been the only think holding this bs market up- look out below. feh. Corporate earnings are due to productivity gains and shipping jobs overseas. No topline growth and no sales. duh, can you spell Tapped? No jobs, no no consumption, so no top line growth, so eventually the cost cutting ops will run out and where will you be?
Not a pretty picture people.
We'd have been better off if the Fed had let them fail in 2007. It would have been nasty, but we'd be mostly over it by now and on the road to recovery. Instead, we'll be dealing with this debt (and our other UL debt) for decades.
cretins,
peace,
rono
Comments
Thanks for the update.
I'm buying a small batch of gold coins soon with some
profits from my S&P short position. And my plan is to buy more at a later date
when I cover the rest of my short.
It's sad that investors have been groping for returns for years, while still saying
things like, "Stay the course" (John Bogle's advice), "Be willing to sit for years"
and "buy things that you will hold through thick and thin".
It seems that not many will admit that dispite several major market crashes,
they still don't recognize a market failure and lack a formal exit plan. They prefer
to talk about strategies rather than actually have one.
Oh well.
I believe you're correct on all counts. Sure, the hedge funds and even the major and CBs are probably using leverage. Most paper commodity trades are leveraged to a greater or lesser degree. The disjoint between the paper market and the physical market can be enormous.
No, I think it will hold around the 1650 support line if that low. I may be wrong, which I've been before, but in this particular bull market in gold (since 2001/2), ever pullback has been halted by physical buying. Every correction has been both shorter and more shallow than all the technicians were predicting because of this varied demand.
If your sister is getting married in India, you are all over these prices for dowry. If you're an off grid survivalist, you're backing up the truck for liberties, buffs and probably some libertads and mapleleafs. Hell, there are quite a few countries around the world that are taking numbers to buy at these prices JUST to diversify their national bank holdings.
I'd be very surprised if this doesn't prevent too steep a slide this time too.
Hey Mo, you've been around and are an informed guy. What product or service doesn't have a spread between wholesale and retail? or in other words, everybody wants a little vigorish. The best we sometime traders can do is attempt to minimize the spread.
TV shopping channels sell coins, albeit some nice slabbed coins at times, but normally about 50-75% over retail. Wow, what sort of handicap is that to overcome? It's worse than buying a 5.75% front loaded mutual fund.
So, sure, any purchase of gold jewelry is going to be a market retail if you are lucky. What is important is to deal the best you can with reputable dealers and avoid gimics and crap (e.g. designer labels, faddish stuff and anything that adds a premium to the bullion weight of what you're buying. Hell, they should be pricing the stuff by the gram in the transaction - and if they're not pricing it by gram weight - shop elsewhere.
peace,
rono
Gary Savage talks about $1705 as well as $1400 in the analysis linked below. It is remarkable that he wrote it on Wewsnesday before the SHTF.
http://smartmoneytracker.blogspot.com/2011/09/next-selling-wave-is-about-to-begin.html
This is the best recent analysis of the gold market I have seen.
Kind Regards,
xorion
Good articles and both very accurate. At this point, 1640 has held and I still feel strongly, that there is sufficient demand for physical metal to keep this floor in place.
As for the hedgies selling, sure. That's find and expected and has a huge impact on the paper price of gold. It'll be curious to see what premiums do on the street for physical bullion.
rono