Wednesday, November 01, 2006

 

"A Big Positive" For Gold

Bllomberg reports on the markets. "Gold rose to its highest price in more than seven weeks in New York as the dollar fell on concern the U.S. economy may be slowing. The dollar dropped against the euro and yen after an industry report showed manufacturing growth in the world's biggest economy unexpectedly shrank last month."

"Gold futures for December delivery gained $12.50, or 2.1 percent, to $619.30 an ounce on the Comex division of the New York Mercantile Exchange, the highest close since Sept. 7. Gold for immediate delivery in London rose $12, or 2 percent, to $618.60 an ounce."

"Buying accelerated after prices breached the 200-day moving average of $618.64 in the December contract. 'We have broken through a tough moving average area that the market constantly stalled at, so that is a big positive,' said William O'Neill, a partner at commodity research firm Logic Advisors LLC."

"Jim Rogers, co-founder of the Quantum hedge fund with George Soros in the 1970s, recommends investors 'get out of Western stocks and the U.S. dollar and buy commodities.'"

"Investments in commodity indexes doubled in the past year to $110 billion as pension funds and other money mangers diversified from stocks and bonds, American International Group Inc. said yesterday."

"'The U.S., once the largest creditor nation, is now the largest debtor nation,' Rogers said in a speech in London yesterday. 'The country is increasing its foreign debts by $1 trillion every 15 months. The dollar is the world's medium of exchange, but that's changing. We are a bull market in commodities.'"

"Among other precious metals for immediate delivery, silver gained 20 cents to $12.49 an ounce, palladium climbed $4 to $326 an ounce, and platinum rose $23 to $1,103.50 an ounce."

From MarketWatch. "Analysts at Numis Securities noted that the close correlation between the oil price and gold price seen since the end of 2005 has weakened this week, with gold prices rising but oil prices falling. 'It is evidence that the stronger driver for the gold price is the strength of the dollar,' they said."

"Analysts at research firm Action Economics agreed. A litmus test 'will be if prices can sustain above $610.00 without the backdrop of firmer oil or other commodity prices,' they said."

"'The dollar has taken some serious uppercuts of late, and U.S. consumers have not only toned down their optimism quite rapidly, but are not too eager to spend the extra few dollars in their wallets that a curiously cheaper gasoline price has suddenly yielded,' said Jon Nadler, an investment-products analyst at Kitco.com."

"'Gold will bounce along quite nicely if the dollar continues to have such flu symptoms and/or if people start pulling some money off the very, very rich pile that is sitting on the equities gaming tables,' he said. 'We will have an interesting 60 days coming up. Just do not throw caution to the wind,' he warned."

"Earlier, the greenback edged slightly higher after a report showed the U.S. economy added about 128,000 private-sector jobs in October. The data provided by Automatic Data Processing Inc. covers private-sector jobs only. After adding in the government-sector jobs, the report suggests nonfarm payrolls rose by about 140,000 in October."

"Economists polled by MarketWatch expect the economy to add 125,000 jobs in October. The Labor Department will release the payrolls report Friday at 8:30 a.m. Eastern time."

Comments:
The yen, the SK won, and the Singapore and Australian dollars continue to run strongly against the US dollar, especially since the last Fed meeting. Simplest interest-bearing play I am aware of is Australian govt bonds.
 
How about a post or thread about Gov metrics that measure currancy values. If all the currancies are rapidly inflating, what is the relevance of comparing them?

Inflation numbers? Any links to more historic acedemic inflation measures?

Golds purchasing power as compared to other commodities?

When the credit bubble collapses if gold were used to remonitize all currancies how much would it be HAHAHHAHA.
 
Watch out for a possible "Gulf of Tonkin" incident in the Straits of Hormuz. Many well-armed vessels are in the neighborhood. Christopher Laird is now calling the end of the short-term bear on gold and is very alarmed by prospects of a breakout of hostilities with Iran.
 
http://www.goldensextant.com/Resources%20PDF/JASTRAM%20THE%20GOLD%20STANDARD.pdf

http://www.streettracksgoldshares.com/pdf/research_study_22.pdf#search='gold%27s%20purchasing%20power%20commodities%20over%20time'

couple interesting sites
 
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