Tuesday, February 07, 2006

 

Gold Prices Take 'Neccessary Retracement'

Market Watch reports on the sell-off so many have expected. "Gold futures dropped as much as $14 an ounce Tuesday to trade at the lowest level in almost two weeks, but most analysts see the weakness as only a temporary setback in the metal's climb to $600. 'It finally looks like we're in for a little bit of profit taking and a necessary retracement,' said Dale Doelling."

"Gold for April delivery fell to a low of $560.50 an ounce, its lowest intraday level since Jan. 26. It last traded at $561.80, down $12.50, or 2.2%. Prices for April gold may fall to the 50-day moving average of $537.40, Doelling said, adding that the level offers 'very strong chart support.' Even so, 'the overall market trends remain intact,' he said, with a fall to the support level taking the market back to 'oversold territory.' That would likely set up 'the next leg that would finally see gold testing that $600 resistance level.'"

"'There is huge demand out there at the lower levels still, with the funds holding, but prepared to sell on the fall, that's what consolidation is about,' said Julian Phillips. 'The resolution of these pressures can only make a market healthy.'"

"March silver traded down 26.8 cents, or 2.8%, at $9.49 an ounce. Rounding out the metals action, April platinum lost $9.60 at $1,066.60 an ounce, and sister metal palladium saw its March contract drop $21.80 to $291 an ounce."

"Over in the equity market, metals-mining indexes lost ground along with the metals futures."

As of this writing, spot gold is off $19, or about 3,5%. And the Amex Gold Bugs Index, HUI, is down over 7%.

Comments:
ben, you might have a bit of notoriety if the housing bubble bursts right as the metal zoom off! get ready for that CNBC show.
 
I am curious to know if any readers have never been throught one of these sell-offs. It can be very volatile, with up and down swings. I remember holding silver when it would move 70-90 cents each day!

The stock prices are another noteworthy issue. It is not unusual for mining shares to double the percentages of the physical metals up and down. More risk, but potentially more reward.
 
Every gold-analyst seems to say the same thing right now: We're due for short-term retrenchment but the year looks great. I call that one hell of a buying opportunity.
 
Stay long precious metals

"This silver ETF announcement is a true win-win for silver investors. (If) their silver ETF becomes effective, the impact on the price of silver will be great. That’s win number one, obvious and straightforward.

"But if ... this ETF never sees the light of day, that will be a big win as well for silver investors. Why? Because it will prove for all to see just how critical the supply/demand and inventory situation is in silver. If the government says no way to this ETF, it will be for one reason only – there is not enough real silver in the world to fund it."

Psychology of a Falling Dollar 2/07/06
 
Johnthelaw-

I've heard the argument that "there's not enough silver in the world to fund a Silver ETF" before, but its always seemed extremely strange to me. Are there any prior examples of the government disallowing an investment vehicle because it would increase competition?
 
Thanks for the tip, wmbz.
At least my yen has recovered.
 
Excellent news, wmbz.

My outlook has always been very long-term, macro oriented. The bullish uptrend is very well established, so ignoring volatility is just par for the course. This just provides further opportunity to accumulate at good prices, the lower the better
 
austinyankee,

No no no... Mike C is right, but it's all good. I know we all want to see housing prices return to sane levels. However, this is an opportunity to build real wealth, not just a quick buck.

I (for one) believe we're headed for a depression. Bernanke will attempt to hyperinflate around it, but will simply destroy the dollar in the process. Anyone holding substantial PM positions will come out like the Kennedy's.

Regardless, these things will all take time to pass. In the meantime, you've been given the knowledge, opportunity and time to prepare for it. Use it!
 
TJ- I think you're right. the difference between the goldbugs(I'm using that to describe anyone in commodities) is that we think we'll make lots of money slowly. the housing speculators plan to make a ton of dough in 1 year. I'm talking a 10-15 year look at this market.
 
While all this was taking place in 1929 the captains of the financial markets had already in anticipation of the depression converted most assets to cash, gold, having sold most of their stocks, Joseph Kennedy, Bernard Baruch, and Rockefeller among them. When the market finally tanked they jumped in and bought, bought, & bought. That was then eventually the cornerstone of their great fortunes in the coming decades.

From: The Depression by Dr. Adrian H. Krieg
 
Commodities bull market has long way to go: expert(Jim Rogers)

("Gold is still 40 per cent below its all-time high of US$875 an ounce registered in the late 1980s. Silver is still 80 per cent below its all-time peak. Nickel, zinc and copper are among other metals that are likely to see higher prices in future, he suggested.

The global boom in commodities is not limited to metals. Agricultural commodities such as sugar, coffee, soy beans, orange juice and many others are also booming.

'If you want to be in a bull market, it is in raw materials, natural resources and commodities,' said Mr Rogers.)
 
Yeah, whenever I glance at futures, sugar and coffee are usually up.
 
Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?