Friday, October 13, 2006
Gold Climbs In Spite Of Dollar Strength
Reuters reports on currency trading. "The dollar rallied on Friday and U.S. Treasury prices fell as solid U.S. economic data reduced expectations for interest rates cuts. The dollar strengthened to around $1.25 per euro, a level not breached in nearly three months, after the University of Michigan's consumer sentiment index posted a surprisingly large rise in October, dashing views the Federal Reserve could cut interest rates in coming months."
"The dollar's climb was triggered earlier in the session when a separate report showed U.S. retail sales unexpectedly declined in September, but were resilient when excluding the effects of lower gasoline prices."
"'These two numbers, consumer sentiment and retail sales, combined with the revisions to nonfarm payrolls from last week are dollar supportive straight down the line,' said Joseph Trevisani, chief market analyst at FX Solutions."
"They have squashed speculation about Fed rate decreases, and you have to concede the possibility of the Fed actually raising rates again,' he said."
"The dollar was up 0.6 percent against the Swiss franc at 1.2755 francs. The euro broke as low as $1.2496 on electronic trading system EBS, trading below a key level, and was later trading down 0.4 percent on the day at $1.2505."
"The dollar was at 119.77 yen, up 0.4 percent and in sight of the 120 mark. A break of that technical level would likely open the floodgates for further dollar strength, traders said."
"In the commodity markets, U.S. crude oil futures jumped above $59 a barrel on Friday on news of oilfield shutdowns in Norway and helped by indications OPEC may meet next week to formalize a production cut agreement, traders said."
"Gold futures climbed more than $12 an ounce Friday, closing near a two-week high and gaining nearly 3% for the week, with support coming from higher energy prices, reports of strong physical demand for the metal from India and heightened prospects for international sanctions against North Korea."
"Gold for December delivery closed up $12.40 at $592.70 an ounce on the New York Mercantile Exchange, the contract's strongest closing level since Oct. 2. On Friday, the December contract ended the week with a gain of $15.90 after closing out last week at $576.80."
"'Despite the enormous hype in the last few weeks over the gold price, fundamentally little has changed in the gold market,' said Julian Phillips, an analyst at GoldForecaster.com. 'In particular, the Indian market, a market driven by forces totally unrelated to those that drive the New York and London markets, is a very supportive force,' he said."
"For the moment, 'while short-term factors could take the price down again, it seems as though the downward pressure is abating in the near term.'"
"Other metals finished higher, with December silver adding 30 cents to close at $11.68 an ounce, 4.5% above the week-ago level. January platinum closed up $8.70 at $1,083.30 an ounce, putting the week's gain at 0.2%. December palladium rose $8.05 to end at $315.95 an ounce, closing more than 5% above the week-ago level."
"The dollar's climb was triggered earlier in the session when a separate report showed U.S. retail sales unexpectedly declined in September, but were resilient when excluding the effects of lower gasoline prices."
"'These two numbers, consumer sentiment and retail sales, combined with the revisions to nonfarm payrolls from last week are dollar supportive straight down the line,' said Joseph Trevisani, chief market analyst at FX Solutions."
"They have squashed speculation about Fed rate decreases, and you have to concede the possibility of the Fed actually raising rates again,' he said."
"The dollar was up 0.6 percent against the Swiss franc at 1.2755 francs. The euro broke as low as $1.2496 on electronic trading system EBS, trading below a key level, and was later trading down 0.4 percent on the day at $1.2505."
"The dollar was at 119.77 yen, up 0.4 percent and in sight of the 120 mark. A break of that technical level would likely open the floodgates for further dollar strength, traders said."
"In the commodity markets, U.S. crude oil futures jumped above $59 a barrel on Friday on news of oilfield shutdowns in Norway and helped by indications OPEC may meet next week to formalize a production cut agreement, traders said."
"Gold futures climbed more than $12 an ounce Friday, closing near a two-week high and gaining nearly 3% for the week, with support coming from higher energy prices, reports of strong physical demand for the metal from India and heightened prospects for international sanctions against North Korea."
"Gold for December delivery closed up $12.40 at $592.70 an ounce on the New York Mercantile Exchange, the contract's strongest closing level since Oct. 2. On Friday, the December contract ended the week with a gain of $15.90 after closing out last week at $576.80."
"'Despite the enormous hype in the last few weeks over the gold price, fundamentally little has changed in the gold market,' said Julian Phillips, an analyst at GoldForecaster.com. 'In particular, the Indian market, a market driven by forces totally unrelated to those that drive the New York and London markets, is a very supportive force,' he said."
"For the moment, 'while short-term factors could take the price down again, it seems as though the downward pressure is abating in the near term.'"
"Other metals finished higher, with December silver adding 30 cents to close at $11.68 an ounce, 4.5% above the week-ago level. January platinum closed up $8.70 at $1,083.30 an ounce, putting the week's gain at 0.2%. December palladium rose $8.05 to end at $315.95 an ounce, closing more than 5% above the week-ago level."
# posted by Ben Jones @ 3:51 PM 
Comments:
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I'm seriously considering using this dollar move to add either yen or euros to the basket. A euro CD yield about 3.5% and the yen in the low2%'s. But IMO, Europe has a housing bubble whereas Japan doesn't. Hmm.
...Preaching to the choir ,but always love this line...
Many of the best experts say that there is barely 300 million ounces of silver in refined, deliverable form. With 300 million people in the U.S., then if you have even one single ounce of silver, then you may have “more than your fair share”, and are either an evil, greedy, capitalist pig, or a wise steward of your own wealth.
There has been less than 5 billion ounces of gold mined in all of human history, worth about $3 trillion dollars. But there is about $50 trillion of paper money in the world, and about $50 trillion of debt. So, gold should go up in value at least 10-15 times, or more.
Many of the best experts say that there is barely 300 million ounces of silver in refined, deliverable form. With 300 million people in the U.S., then if you have even one single ounce of silver, then you may have “more than your fair share”, and are either an evil, greedy, capitalist pig, or a wise steward of your own wealth.
There has been less than 5 billion ounces of gold mined in all of human history, worth about $3 trillion dollars. But there is about $50 trillion of paper money in the world, and about $50 trillion of debt. So, gold should go up in value at least 10-15 times, or more.
so just dump your other investments! gold is inversely correlated with paper assests, so you may want to do some more figuring.
Re: John Law. Learn your history as it is about to repeat itself. John Law the economist not our poster here..
http://en.wikipedia.org/wiki/John_Law_%28economist%29
"Shares rose from 500 livres in 1719 to as much as 15,000 livres in the first half of 1720, but by the summer of 1720, there was a sudden decline in confidence, leading to a 97 per cent decline "
People started buying silver but it was outlawed to own bullion. The people who saw the writing on the wall bought jewelry ,and silverware and smuggled it out of the country....
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http://en.wikipedia.org/wiki/John_Law_%28economist%29
"Shares rose from 500 livres in 1719 to as much as 15,000 livres in the first half of 1720, but by the summer of 1720, there was a sudden decline in confidence, leading to a 97 per cent decline "
People started buying silver but it was outlawed to own bullion. The people who saw the writing on the wall bought jewelry ,and silverware and smuggled it out of the country....
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