Monday, February 06, 2006

 

Gold 'Over-Bought': Grandich

Political events are driving gold into territory that has some traders worried. "Gold futures climbed near $575 an ounce Monday morning as the International Atomic Energy Agency's decision to refer Iran to the United Nations Security Council on concerns about its nuclear program prompted investors to go on the defensive."

"But the lofty price level prompted at least one analyst to warn of an upcoming correction. Most analysts expect prices to reach $600 an ounce, but Peter Grandich warned that from there, gold may be poised to see a significant correction. 'I don't think gold is going to plunge,' but the market needs to 'pay heed to its extremely overbought current condition,' said Grandich."

"'There is enough current momentum to make a run to $600, but somewhere between now and then lies a significant period of correction that is going to pass at least more than a day or two,' he said."

"The IAEA voted to refer the Tehran government to the U.N. Security Council over the weekend, citing an 'absence of confidence' that Iran's recently-resumed nuclear program is aimed at strictly peaceful, civilian energy generation."

"Action Economics economists said gold speculators are currently running a large net long exposure to gold prices, but 'scope for a sustained correction will likely be limited while the uncertainty stemming from the Iran-UN situation continues. 'Chinese markets reopened today after a week long break for the Lunar New Year, which could bring some fresh physical demand to the market too,' they said."

"March silver was last trading up 3 cents at $9.79 an ounce. April platinum was down $10.50 at $1,072.20 an ounce and sister metal palladium saw its March contract fall $8.20 to $310 an ounce. Over in the equity market, metals-mining indexes headed higher, attempting to recoup losses of around 3% seen in the previous session."

Comments:
"'There is enough current momentum to make a run to $600, but somewhere between now and then lies a significant period of correction that is going to pass at least more than a day or two,' he said."

I fully expect to see a pull back(correction). As far as I'm concerned this will be another buying opprotunity. The unease and world tensions are not going away anytime soon. There are several crack pot leaders around the world that can snap at any minute. Chavez to our South is really shooting off his mouth now, and I for one will not be the least bit surprised if he does shut us off from their oil and shut out the U.S. companies opperating there. He has plenty of other customers ready and waiting to purchase all they can get their hands on. The PM's have a long ride ahead of them and there will be pull backs along the way no doubt.
 
Silverado (SLGLF)

http://web1.kitco.com/pr/frame/index_prec.html?http://www.silverado.com/february062006/
 
while I don't doubt mr. grandich, the last correction was supposed to be when gold hit $500.
 
Someone took this to heart. The metal market is getting hit hard today. Palladium is down $22, Gold $14. This is the buying opportunity.
 
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