Friday, April 28, 2006

 

Metals Surge On 'Flight To Quality', ETF

Bloomberg reports on an interesting day in the markets. "Silver prices in New York surged 9.3 percent, the biggest gain in 11 years, on speculation investor demand will grow as Barclays Plc began offering an exchange-traded fund backed by the metal. Silver futures for May delivery jumped $1.17 to $13.76 at 1:05 p.m. A close at that price would mark the biggest gain since March 1995."

"Barclays offered 50,000 shares of its iShares Silver Trust, each representing 10 ounces of silver. The fund rose $8.02 to $138.02 on the American Stock Exchange. 'Most of this is new buying for the exchange-traded fund,' said Daniel Vaught, a commodities analysts at A.G. Edwards. 'That is playing a role in strengthening the market.'"

"Gold futures surged to a new 25-year high on a falling dollar and worries over Iran's atomic program on Friday. June delivery gold was up $16.70, or 2.55 percent, at $653 per ounce 12:11 p.m. EDT, trading in a range of $634 to $655.50, a new contract high."

"Strong oil and base metals prices and uncertainty over the U.S. economy fueled waves of aggressive investor buying across the precious metals group, dealers said. 'I think gold has kind of taken on a leadership role,' Steve Platt, a broker in Chicago, said, adding that the yellow metal also was benefiting from a weak dollar. 'People for a long time had not been interested in the precious metals to any big degree, but now you have started to see them look at them once again as a flight to quality in terms of asset diversification,' Platt said."

Comments:
This is a strong breakout for the PM's. The US$ is correcting too.
 
Ben is losing it. It is really not a good start for him this way. But he totally brought it on himself. I think Gold is going to $800 in two months.

Let's face it Ben, it requires a solid 7% to defend the dollar and stem the oil inflation.
 
John,
The Iran thing isn't helping him out, either. Will gold prices force the Fed to continue raising, even though that will likely spark a recession? I saw BB's picture during the congressional testimony. He didn't look like he wanted to be there.
 
If he has balls, he should let the recession begin, which is good for us in the long run. But obviously, he is not going to do it.

Yes, Iran is not helping us. But do they have an obligation to help us? Didn't George bring the Iran trouble on us?

We HAVE a solution. Our leaders just don't the guts to take the pill. Period.
 
John,

I'm curious to know what that solution entails. Please do tell
 
This is my prescription:

1. Fed Rate to 7%, or higher if 7% not enough. In other words, we need a Volcker.

2. Cut the deficts. Repeal the tax cuts of 2001.

3. Stop pissing off everybody and try to pick up the pieces in the Middle East.

It will be some pains, but hey, if you are sick, it's better to swallow it.
 
Agree with your points 1 & 2, but not 3. BTW points 1 & 2, if implimented, would REALLY piss people off, people who vote.
It's very hard to balance your point 3 with outright political appeasement. And Bush did not create 50+ years of hatred and resentment now being vented. He was honest enough to confront it. ;-)
 
I jumped on SLV this morning @ 129. So far, so good. I traded in some SLW shares to do so, but in hind sight, I should have just used margin. :)
 
Short Squeeze
 
Bush confronted it all right, but he confronted it in an exactly wrong way.
Soft power, not the hard power, is going to win the clash of civilizations. He should act in a restraint way militarily, while projecting our freedom and democracy by winning people's hearts and minds. It will take time, but didn't we win the cold war in 50 years?

There are too many things wrong about this guy, so I will just stop here.
 
I can't even begin to respond without getting off topic so I won't.
 
Out at the peak -- you said you traded in SLW for SLV:

I hold both by the way, but I'm staying heavier in SLW.

Many people don't realize that profits from SLV are taxed at a flat 28%, while profits from SLW (if you hold 1 year or longer) are taxed at the 15% cap gains level.

So even if there's parallel growth in the SLW and SLV, SLW will greatly outperform from a tax perspective.
 
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