Thursday, July 27, 2006

 

Traders Like Golds 'So Called Safe Haven'

The Street.com has this on the markets. "A frenetic day in the metals markets saw gold prices soar Thursday as a credit-rating upgrade for China weakened the dollar and an Al Qaeda call-to-arms spurred interest in so-called safe-haven investments. 'The currency news about China is putting pressure on the U.S. dollar,' says Randy Diamond at Miller Tabak, adding the threat of more terrorism only helped gold's case. 'People are very sensitive and are definitely not blowing it off.'"

"The spot price for gold was trading around $634 per ounce in London, up $16.45 compared to the previous day."

"Standard & Poor's upgraded China to A from A-, according to a release Thursday morning by the rating agency. The news comes as investors are increasingly confident the Federal Reserve will not hike interest rates at its Aug. 8 policy meeting in the light of more evidence of a U.S. economic slowdown."

"The combination weighed on the U.S. dollar, which was recently trading at 115.88 yen vs. 116.33 late Wednesday."

"The bullish news wasn't, however, enough to save the gold miners that were suffering after Newmont Mining reported disappointing second-quarter earnings of 36 cents a share vs. expectations of 47 cents. Shares were recently trading down 4.7%. Barrick Gold, AngloGold Ashanti and Freeport-McMoRan Copper & Gold were being pulled down by investor disappointment in Newmont."

From Reuters. "Spot gold traded at $633.50/634.25 in the New York afternoon, up from $621.80/622.55 late on Wednesday. It had dropped as low as $623.75 during Asian trade. The dollar was weaker across the board for a second day as traders remained sceptical that the U.S. Federal Reserve will raise interest rates next month. It had hit a two-week low against the euro earlier in the session."

"Other metals prices were mixed. Silver settled up 31 cents at $11.345 an ounce, platinum rose $1 at $1,242 an ounce and palladium gained 45 cents at $320.45 an ounce."

Comments:
Everyday, it looks like more is riding on the Fed decision next month. With so many central banks raising, how can the Fed halt?

BTW, you can hold the Chinese currency through Everbank, but I believe there is a $25k minimum. IMO, fiat cash from a communist country is a little risky.
 
Have to agree China ¥ , Is too risky as they are tied to our hip. We are slipping ,and as we fall they get weaker..Who's gonna buy their widgets? I have a smattering of small miners, but physical holding is the way to go IMO. Not to quote Cramer..yeh, I know, but he was saying he see's a recession looming ,and was bullish on all the miners during call in. For that matter all the 'experts' are talking' R' going foward..and that from the rah,rah bulls.....
 
Here's some technical analysis for the possible M3 level...
http://www.newsfollowup.com/finance.htm#Calculate
 
I think the Fed has to keep raising rates. If they decide to stop, the $ goes down and the price of everything that is imported goes up. Instant inflation. But I could be wrong...
 
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