Tuesday, May 30, 2006


''Terminally Ill' Dollar To Be Tested Again & Again

The US dollar weakened on Tuesday. "Gold futures closed at their highest levels in a week Tuesday, as weakness in the U.S. dollar steered investment demand toward the precious metals. Calling the dollar 'terminally ill,' Peter Grandich said the currency is headed for a long-term retreat. 'This in turn should be most beneficial to gold's long-term path, up,' he said."

"Gold for June delivery rose $2.90 to close at $653.90 an ounce on the New York Mercantile Exchange after trading as high as $664.50, while August gold, which is trading on higher volume, tacked on $3.10 to close at $660.50 an ounce following a high of $671.50."

"From here, the 'question is whether the entire precious metals complex will settle into a nice consolidation range or will it find a way to rally to new highs,' said Dale Doelling, chief market technician at Trends In Commodities, adding that he's 'betting on a consolidation at this point which could last a couple of weeks.'
'The final outcome will be a breakout to new all-time highs in the gold market, although it may take some time for that to materialize,' he said."

"Taking its cue from gold, July silver added 34 cents to finish the session at $13.07 an ounce, a one-week closing high. June palladium closed up 35 cents at $355.45 an ounce while July platinum ended at $1,291.40 an ounce, down $6.70."

"'After being assured by the president (just last week) that Treasury Secretary John Snow was doing 'a fine job' and that the economy was doing also doing fine thanks to his efforts, the public [was] told today that Mr. Snow is resigning,' said Jon Nadler, an analyst at bullion dealers Kitco.com. 'What little confidence there may have been left in the dollar is now going to be tested again and again,' he said."

From Forex News. "Hank Paulson’s nomination as Treasury Secretary may provide some temporary relief for the sliding dollar owing to Paulson’s prominent status as a former of a top Wall Street firm. But we doubt that Paulson’s role at the Treasury in the next 2 ½ years will alter the current and emerging fundamental challenges to the US currency."

"Just as the Bernanke Fed is conscious of the the dollar repercussions of communicating an explicit conclusion to the 2-year old policy tightening campaign, the US administration has grown conscious of the market realities acting againt the US dollar, leaving it no choice but to resort to a figure of credibility."

"This is not to say that the US Administration will pursue a strong dollar policy in both practice and preach as was under the Clinton-Rubin-Summers years, but will instead aim at pursuing a competitive currency without lacking in confidence."

thejdog, you have one hell of a source!

John in VA, notice the "good news is great, bad news is better" dynamic?
TJ...yes. It's amazing how much inside info. some traders have. I was already short DIA & SPY, but I put an insane trade in this morning shorting DIA, and made a nice chunk of $. Of course, the 'conondrum' is when to cover and book profits.

For the record, todays correction should have been larger and I did not cover. We'll see what happens tommorow.

I sent an email to my source basically asking what happened to the 400pt drop and if the PPT stepped in and he replied "Plunge Protection Team?

You mean JP Morgan? LOL. No. Not a myth but they save that for emergencies. Brokers are in it to make money afterall."

Pretty interesting.
Speaking of interesting, anybody notice how gold keeps getting beat down on the asian commodity markets? Looks like they are very bearish and that is not good news at all. I'd like to see a good Asian currency butt kicking to bring out the buyers over there....or perhaps a political event?
that's weird, silver and gold ETFs up, stocks down a bit.

my only thought is the big guys moved money into the ETFs and didn't want to mess around with figuring out the gold and silver stocks.
In Ben's housing blog, people speculated on how long it would take before the mainstream media started to use the word "bubble". I myself wonder how long it will be until Katie Couric utters the syllables "Weimar".
i'm looking for silver to breakout.

It's oversold and is readt to go.
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