Tuesday, January 02, 2007


Gold Starts 2007 With Rally

The Associated Press reports on currency trades. "The U.S. dollar was lower against other major currencies in European trading late Tuesday. Gold prices rose. The euro traded at $1.3272, up from $1.3198 late Friday in New York. Later, in midday trading in New York, the euro fetched $1.3281."

"Other dollar rates in Europe, compared with late Friday, included 118.76 Japanese yen, down from 119.05; 1.2134 Swiss francs, down from 1.2188; and 1.1649 Canadian dollars, unchanged. The British pound traded at $1.9721, up from $1.9586."

'In midday New York trading, the dollar bought 118.84 yen and 1.2125 Swiss francs, while the pound was worth $1.9734."

The Ottawa Business Journal. "The pound sterling continued to move higher against the Canadian and U.S. dollars Tuesday. The pound rallied in December on the weakness of Canadian and U.S. economic indicators before briefly retreating near the end of last month. The pound has joined the euro as a popular hedge against weakness in the Canadian and U.S. dollars."

From MarketWatch. "Gold futures extended their winning streak in electronic trading Tuesday, with a weaker U.S. dollar helping the precious metal start the new year on firm footing. Trading on the New York Mercantile Exchange was closed to observe a day of mourning for former president Gerald Ford. Read more. Regular trading will resume Wednesday."

"Gold for February delivery was last up $4.30, or 0.7%, at $642.30 an ounce in electronic trading on CME Globex. Volume on the CME Globex electronic trading platform rose 31% in 2006."

"'Gold bullion kicked off 2007 with a follow-through rally that was prompted by further dollar weakness overseas,' said Jon Nadler, an analyst at bullion dealers Kitco.com. 'Trading activity may not resume a full participation level until next Monday and today's action also reflected market closings in Japan, in the U.S. equities markets, and the fact that some traders have not made it back to their desks yet,' he said."

"Other metals markets were mixed in electronic trading, with March silver up 33 cents at $13.265 an ounce and March palladium $1 higher at $339.50 an ounce, but January platinum 30 cents lower at $1,139 an ounce."

"To get their views on 10 burning economic questions for 2007, we interviewed the eight standout economists who won the MarketWatch Forecaster of the Month contest in 2006."

"10. Will the dollar collapse? The panel says no. It sees the euro-dollar rate at about $1.32 next year at this time, trivially higher than the $1.31 it's at currently."

"'I don't buy into the scenario that foreigners will suddenly wake up and wonder why we have all those dollar assets,' said Stephen Stanley of RBS Greenwich Capital. Sure the current account deficit is way too high, Stone said, but it's been that way for years. It will unwind, 'but we don't know when that will happen.'"

Wonder when the first buying opportunity will present itself this year?
Paul Krugman on the future of the Housing Bubble / Economy

This might be OT, but I think it speaks to the economy as a whole: Has anyone been following the Xmas/post-Xmas sales figures this year?

"Deeply Disappointing" is the term I've seen a few times.


Even the post-Xmas price-slashings failed to impress.

IMHO if this isn't a sign that the American consumer is tapped out, I don't know what is. There's no bigger machine of American consumerism than Xmas. And this year was a bust.

Furthermore, there's no convenient excuse at hand like "It was too cold" or "People were afraid of terrorism" or "Store sales were down, but Internet sales were up".

Nope: This years weak sales were just a result of "weak demand", period.

Personally, I shopped about as much as I do every year, but couldn't help noticing that the prices of just about everything seemed extraordinarily high. I stopped into some stores yesterday and noticed that the sale reductions weren't even that extreme. It looks like stores are clinging to the hope of a last minute shopping surge -- but according to the numbers it just hasn't come.

Now let's wait and see which ultra-creative pundit can put a positive spin on this rotten egg.

Because if the consumer has run out of steam... so has America.
It's not like they were'nt heavily discounting, too.

BTW, anyone check out the chart on uranium?? WOW! Gotta start reading my newsletters again...
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