Thursday, February 09, 2006

 

Futures Markets Jump On Nerve Gas Scare

Market Watch reports on the nervous futures markets. "Gold futures climbed as much as $9 an ounce Thursday morning, after spiking by $10 overnight following a scare at a Senate office building in Washington. Some 200 people were evacuated from the Capitol Hill building late Wednesday following what later turned out to be a false alarm that had indicated the presence of nerve agents."

"In overnight trading, 'the market found strong buying interest by the funds, but also on news that a suspected nerve agent forced the evacuation of the U.S. Senate office building,' said Nell Sloane. Gold held most of its gains 'even though the vapor that caused the alarm tested harmless,' Sloane said, adding: 'The bounce extended to other precious metals as well. This market will probably continue to be quite volatile,' she said."

"The overnight move 'shows just how fast this particular market can move higher when the market is scared,' said Kevin Kerr, a veteran commodities trader. 'Gold seems to also be rebounding from the steep over the cliff type profit taking we have seen in the last two days,' he said. 'Funds wanted to take some cash off the table and gold was due for a correction anyway but now that a healthy cleansing has happened the market can resume its rise.'"

"Elsewhere in the metals complex, March silver futures were last trading up 16.5 cents at $9.605 an ounce. April platinum was up $14.60 at $1,070 an ounce and sister metal palladium saw its March contract climb $9.75 to $302.50 an ounce."

And there was this report from South Africa. "The country's gold production in 2005 declined by 12.8 percent when compared with 2004, Statistics South Africa said on Thursday. In the three months to December 2005 gold output fell by 8.8 percent when compared with the three months to December 2004. Gold production in December 2005 was 3.8 percent lower than output in December 2004."

"The total mining production for the fourth quarter of 2005, after seasonal adjustment, decreased by 3.1 percent when compared with the previous quarter. The decrease was due to a seasonal adjusted decrease of 4.3 percent in the production of non-gold minerals during the fourth quarter of 2005 when compared with the previous quarter."

"The seasonally adjusted decrease of 4.3 percent in the production of non-gold minerals was mainly due to a decrease in the production of platinum group metals (PGMs) by four percent, coal by 0.8 percent and iron ore by 0.2 percent."

Comments:
could it be?

1. a short squeeze

2. certain players like hedge funds, penions funds, institutions and central banks have a lot of money. could it be they are the one's who want to increase their % held in gold and don't care if the price is $550 or $575?

think about this, in a few quarters the gold ETFs are top 15 holders of gold!!! they have only around 4 billion dollars worth of gold bought!
 
SOMEBODY POST SOMETHING!
 
John,

What is you choice right now for the best metal? Also, is there a paper currency you like at these levels.

I am also looking for Friday topic suggestions!
 
I have a topic.
Why it looks like there is less and less comments on Housing Bubble blog?
 
Mike,
That's an easy one. The new format allows people to view, read and comment on 3 days of posts, whereas the old one was 7 posts. I never have counted comments, but I can say that new readers are at an all time high. December hits were over 500,000. January was way over 600,000 and since the format switch have run close to 40,000 per day.
 
Mike-

The housing bubble is a done deal. Very little denial from the press anymore. Just a matter of watching the train wreck happen.

I don't think very many of us that got educated over there took the next step and decided to profit from the crash. Hence the small number of posters over here. Who'd ever think those crazy goldbugs, after their years of whining, could finally be right?
 
Not much of a correction! I was hoping for a bigger drop...
 
Market Watch reports on the nervous futures markets. "Gold futures climbed as much as $9 an ounce Thursday morning, after spiking by $10 overnight following a scare at a Senate office building in Washington.

Ever noticed that the media only has a few "pat" responces to any market shifts. I'm sure some of the PM swings have to do to with a little fear, but the fundamentals for their strength go way beyond that.
 
well I should say right off I'm not any kind of professional about the metals like some analysts on the net(kitco, financial sense, etc.)

I think silver is undervalued relative to gold. it looks like palladium is undervalued relative to platinum. a lot of people would probably buy gold instead of silver because you'd have to buy a lot more ounces of silver to spend as much on a single ounce of gold.
 
as far as currencies go, I really don't know a whole lot about individual currencies, except to say I don't think the US dollar will do good, so anything other than the US dollar will do good.

any country that's not printing money will probably do well versus the US dollar. commodity currencies, probably as long as commodity prices and demand keep up will probably do good.
 
This comment has been removed by a blog administrator.
 
Suggestion for the weekend topic:

It would be interesting to get an idea of what the portfolios look like of some of the posters on here. You can get as detailed as you want, or just keep it simple.

lv_cpa:

Good post. The crash is yesterdays news as far as I'm concerned, and honestly it will take years to completely unravel and play out. I know I've commented before about this, but the bitterness and the conspiracy theories at HB2 are a little much at times. Still, it's a good service Ben does, and it educates the un-educated on what's really going on.
 
TJ:

Yes, I expected a little deeper correction myself, but it goes to show how volitale te gold market is right now in regards to the false alarm with the nerve gas.

Gold could lose $100 next week or gain $100 and it would not surprise me the least. Lot's of wildcards with gold, unlike other PM's. Central Bank buying & selling, terrorism, USD, inflation, hedge
funds etc. etc. I still think we see a 10% correction (from previous high) before the end of summer. That will be the time to load up.
 
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