And Then There is This…Friday, June 13, 2008
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Gold declined throughout the Far East and Europe in early Thursday morning trading. The decline rate accelerated about two hours before the Comex open in New York. Once the NY boys showed up, the price dropped another $8 to a low of $856.50 in just a few minutes.
But that was the bottom. In fits and starts, it clawed its way back to close at around $868 according to the Kitco chart. The price is up about $4 in Sydney and Hong Kong trading as I write this. But don’t forget that New York has access to the Globex trading system for nearly 24 hours a day, and it could just as well be them trading in Hong Kong.
Silver action was slightly different. It declined virtually in a straight line until the Comex open, before it too was hit by the same not-for-profit sellers. The bottom tick was $16.22. Actually, some of the tech funds could have been shorting silver (and gold, too) at that point…at the same time as other tech funds were pitching their long positions. It’s hard to know without the COT report…and Wednesday’s and Thursday’s data won’t be in it until next Friday…June 20th.
On Wednesday, gold open interest fell 1,857 contracts, even though the gold price was up on the day. Silver o.i. went the other way…rising 2,174 contracts…which is a lot for a 30 cent move.
I see that Dennis Gartman is talking about gold again. Here are a few words from his early Thursday morning commentary….”If the governments of the world are now as concerned about inflation as we think they may be, and if they are even more concerned about the prospects for a generic, rising inflationary psychology amongst the public at large, then perhaps a collusive sale of gold to push it down through $865 would be possible…that is, if the (Gold) ‘Bugs’ great fear of collusion amongst the central banks is indeed a reality, and we truly have our doubts.”
Well, Dennis…gold did fall some more on Thursday, but that’s not the end of the world…nor has it been a surprise to the readers of my daily rant. As I’ve always said, the ultimate goal (if the bullion banks could achieve it) would be to take out the 200-day moving averages. They came within an eyelash in both gold and silver on Thursday. The 200-day m.a. has withstood every challenge going back for the last ten years. And when it has been broken, it’s wasn’t for long…and not by a lot. Dennis…if you want some investment advice…I’d seriously think about putting on a long position or two in the next month or so, and letting it ride…as we’re awfully close to the bottom. You can thank me later.
I see in an article dated 09 June/08 out of the bankingtimes.co.uk in Britain that “The Bank for International Settlements (BIS)…has warned that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s.” Really??? Thanks for pointing out the obvious.
Remember Northern Rock…the British bank with the huge line-ups as depositors withdrew their money? Here’s a new bank over there to keep an eye on…as the industry regulators certainly are. The bank is the UK’s biggest mortgage lender…HBOS…Halifax Bank of Scotland.
Today, it’s a double header from Ambrose Evans-Pritchard at The Telegraph out of London. The first story is entitled “Iran’s switch good news for gold bulls?” The story is worth the read in and of itself, but the graph embedded in it is worth printing off and taping to your bathroom mirror so you can see it every day. The article is linked here.
The second AE-P article is entitled “Emerging markets face inflation meltdown”. This story is a must read. The link is here.
I see the Dow rolled over again yesterday and the Catch-a-Falling-Knife Corporation was there to save it just as it was about to turn negative. The beat goes on.
Since today is Friday…it will be an interesting one in the markets. And all of us at Casey’s Daily Resource Plus will be here on Saturday to talk about it.
Have a great weekend.
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