Tuesday, April 03, 2007


Gold "Range-Bound"

The Associated Press reports on currencies. "The dollar strengthened against most major currencies Tuesday as the yen fell on expectations that Japanese investors will resume selling the currency in the new fiscal year. The dollar bought 118.88 yen in late New York trading, up from 117.79 yen late Monday."

"The 13-nation euro traded at $1.3331, down from $1.3364, while the British pound fell to $1.9746 from $1.9782."

"Yen-funded carry trades are picking up again after unwinding throughout March, and some expect the currency to lose more steam as investors buy up foreign bonds in Japan's new fiscal year, which began April 1, said David Gilmore, a partner at Foreign Exchange Analytics."

"In other trading, the dollar bought 1.2221 Swiss francs, rising from 1.2148 late Monday, and 1.1591 Canadian dollars, up from 1.1562."

From MarketWatch. "June gold declined by $1.80 to close at $669.70 an ounce in New York, after reaching a high of $673.20 as traders remained focused on developments surrounding standoff between Iran and the U.K.."

"'For the moment, dips are still being viewed as a good buying opportunity, a theme likely to continue as we approach the wedding/monsoon season in India,' said James Moore, a metals analyst at TheBullionDesk.com. In a note to clients, he called 'encouraging' the emergence of technical support around the $656 chart line."

"However, 'with the market still largely long, there remains the risk of a deeper correction short-term,' Moore said."

"On Monday, June gold had closed at $671.50, up $2.50, after trading as low as $661.70."

"Movements in the price of crude oil also filtered into metals trading. Crude for May delivery closed 2% lower with tensions between Iran and the U.K. easing slightly."

"May silver climbed 8 cents to close at $13.43 an ounce, while June palladium added $2.05 to end at $355.75 an ounce and July platinum rose $3.30 to close at $1,252.30 an ounce."

From Reuters. "Spot gold rose to $667.50 an ounce, its highest for the session, before easing to $664.20/665.20 by 3:35 p.m. EDT, compared with $664.50/665.00 in New York late on Monday."

"'We are range-bound ahead of Easter. The market is long and new buyers are reluctant to enter into the market until we break through some resistance levels, which in my mind would be $670,' said David Holmes, director of precious metals sales at Dresdner Kleinwort Wasserstein."

"Many analysts were not convinced that buying interest was enough to take prices up through $670 and toward the psychologically important $700 area."

From RIA Novosti. "Russia's gold and foreign currency reserves could stop growing by 2010-2011, the Central Bank first deputy head said Tuesday. 'By 2010-2011, the gold and currency reserves will stop growing,' Alexei Ulyukayev said."

"Ulyukayev said capital inflow would not compensate for a decline in trade surplus starting from 2008. The growth of gold and currency reserves will slow down by $30-$40 billion in 2007, year-on-year, he said, adding that the trend would persist in 2008."

"'Consequently, the Central Bank should buy less foreign currency on the domestic market,' Ulyukayev said adding that this was the best way to reduce the growth of money supply, which the Central Bank expects to be 33%, against 50% in 2006."

TJ posted this earlier today:

'[To continue the discussion started in the last thread...]'

'Yes, the yen may be a good port in a storm. What about the Australian dollar?'

'What country out there has stable politics, reasonably sound monetary policy, and is not overly dependent on discretionary exports (especially to the US)??
# posted by TJ & The Bear'

That's a hard one. The AU$ is already way up on the US$, and their reliance on commodites and China is a weakness, IMO. (And why do they always go on about banana prices?).

Canada might be alright, but if oil goes, look out.

Maybe a mining stock bought in a foreign currency? Or overseas annuities?
Gold up big in just a few minutes - anyone know what's up?
Dunno, I would classify a lot of Aussie's resources as non-discretional commodities.

Yes, commodities will take a hit, but there's a fundamental supply/demand imbalance on critical materials that'll limit the downside. Some demand is just baked into the cake; even minimal economic activity requires their use.

Peter Schiff specializes in diversifying client's money into foreign equities, etc. I've got his book on order.. we'll see what he put in there.
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