Gold Boom Doom

KeyNote Friday - Gold clears 900

2009-01-24T16:43:00.004-05:00

A few key points about this week that I would like to recap on:1. Gold finally broke a big resistance and clear the 885 resistance and closed just around 900usd:2. Gold against Euro is extremely bullish3. Gold against 10y is working against the resistance of the down channel. We look for clear break of this down channel to support our trade recommendation.4. Finally, the US Mint released the

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China Buying Metals for Reserve

2009-01-18T23:51:00.003-05:00

This news will be bullish for our long WTI versus UST trade. This is the first official comment from China this year regarding reserve accumulation in natural resources mirroring national interest. I may argue that it is probably a much better time for China to buy/accumulate natural resources since they are long cash and will have strong negotiating power in this weak global economy.(Just in

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Gold - another year end High

2008-12-30T09:13:00.005-05:00

It is worth noting that the Gold has managed a 9th year Y-O-Y high. Happy New Year to you all!Year End Closing Price2000 272.252001 278.95 +2%2002 348.05 +25%2003 415.45 +19%2004 438.45 +6%2005 517.00 +18%2006 636.70 +23%2007 833.92 +31%2008 881.45 +6%(Source Bloomberg)

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2009 - the year of USD?

2008-12-29T11:32:00.012-05:00

I have been exchanging emails with one of our reader about 2009 investment.The conversation started with how the market has punished Russia. The Russia Rubble has depreciated back to its 2004 /2005 level.We talked about how powerful the open market is in punishing Russia. I then compared the situation with China. I argued that China has a comparatively closed economy and fixed currencies since

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SafeHaven - Obama's Spending Spree Won't Rescue the US Economy from Recession

2008-12-28T22:30:00.008-05:00

Gerard Jackson at SafeHaven.com (Safe Haven - Obama's Spending Spree Won't Rescue the US Economy from Recession - 28 Dec 2008) wrote a detailed analysis of Obama's spending spree and explained why it is inflationary and may not boost our economy as intended. I particularly agree with him regarding the point that you cannot promote employment in an industry which is not profitable. That does not

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Gold Poised to Move Higher

2008-12-28T19:33:00.003-05:00

Adam Hamilton wrote a fantastic article on Seeking Alpha (Seeking Alpha - Gold Poised to Move Higher - 28 Dec 2008). He argues across the following points about his Gold Bullishness (I have added some of my thoughts where appropriate in italics):Supply - Mined Supply - new supplies are hard to bring onboard and will take time.Supply - Central Bank Sales - even though CB owns 18% of the above

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Gold outperformance to continue into 2009

2008-12-26T17:31:00.010-05:00

Our core investment theme into 2009 remains as follow:1. long Gold versus Treasury (Treasury looks to be a potential bubble to us)2. long Gold versus Eur/usd (Gold is technically very bullish against all currencies)3. look for CRB bounce (emerging market will focus less on trades but more on what it needs)Updating some of our Gold charts from an October post (Gold Boom Doom - Gold taking a

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U.S. debt approaches insolvency; Chinese currency reserves at risk

2008-12-25T12:48:00.002-05:00

This recent analysis by Maurizio d'Orlando (AsiaNews - U.S. debt approaches insolvency; Chinese currency reserves at risk - 19 Dec 2008) suggests the debt needed to be raised by the US to pay for the bailout has severe negative long term consequence. Here is an excerpt from the article (our own emphasis in BOLD):... In the early months of next year, when the official data are published, the

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Deleveraging Creates Bubble in Treasury

2008-12-24T12:20:00.004-05:00

We all know that Oil has retreated from its summer high of 150usd to 38usd and during the same period 10y note has rallied from 4.27% to 2.08%. The initial deleveraging and the subsequent shutdown of the credit market forces unwinding of risky asset to raise capital. In many countries, the only way raise money is sell hard assets which led to the oil sell off. In addition, the Fed rate cut and

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Beautiful Gold Coin - 2009 design from US Mint

2008-12-24T10:53:00.008-05:00

One of the blog I follow: Mint News Blog talked about the upcoming 2009 design from US Mint (Mint News Blog - 2009 Ultra High Relief Double Eagle Coins - 12 Dec 2008). I must say that the new design (strictly a re-design from it 1907 ultra high relief double eagle coin) is beautiful and if any of my readers are considering buying physical gold coins, as recommended by Marc Faber, one may want to

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James Grant Questions Dollar Validity

2008-12-22T19:30:00.009-05:00

Let me start this commentary with the final paragraph from Grant's latest article on WSJ (WSJ - Is the Medicine Worse Than the Illness? - James Grant - 20 Dec 2008 ):After Mr. Bernanke gets a good night's sleep, he should be called to account for once again cutting interest rates at the expense of the long-suffering (and possibly hungry) savers. He should be asked to explain how the

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WSJ - Gold's Power Is Keeping Up Despite It All

2008-12-22T19:25:00.004-05:00

WSJ's Ahead of the Tape column asked this question today: "Many corners of the market are fearing deflation. So why is it that gold isn't selling off sharply?".Here are some important quotes from the article (WSJ - Gold's Power Is Keeping Up Despite It All - 22 Dec 2008):... Says Malcolm Southwood, commodities analyst at Goldman Sachs JBWere in Australia, "I'm telling clients that the environment

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China - desperately supporting growth - expects more CUT

2008-12-22T09:09:00.004-05:00

When you read this article today from Bloomberg (Bloomberg - China Cuts Key Rates for Fifth Time in Three Months - 22 Dec 2008 ) you will realize that either Chinese Government is desperate to boost growth or playing catch up with US Fed. The People's Bank of China announced today that the one-year benchmark lending and deposit rates would be cut by 27bp. 1 year lending rate is now 5.31% and 1

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Gary Shilling: Stock Bearish

2008-12-21T21:24:00.003-05:00

Gary Shilling just gave an interview to Yahoo Finance. He is extremely bearish about the stock market and is looking for another 30% drop. He favors treasury and USD. It is good to read the opposite view to ours especially from such a reputable economist. However, our thesis is based on the 2nd phase of economic downfall where foreigners will question the integrity of USD Dollar and therefore

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Marc Faber - reiterates buying Gold and Gold stocks

2008-12-21T21:13:00.002-05:00

This is a recent Bloomberg interview with Marc Faber on Nov 25, 2008. He reiterated his physical gold purchase recommendation and added gold stocks to his portfolio.

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CHINA - buy EURO

2008-12-18T08:58:00.003-05:00

So rumours are flying again in the street that China bought over 60 billion of EURO over the past 2 weeks which caused the huge USD squeeze. Yes that would do it!But let's think about that is going on:Here are a list of recent economic numbers from China (Source: Bloomberg)1. Actual FDI YTD YOY 26.29% versus 35.06% prior (slowing down...)2. PPI YoY 2.0% vs 6.6% prior3. Trade Balance 40.09B versus

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GOLD... here we go?

2008-12-17T08:05:00.004-05:00

Having been away for a few weeks in Asia. It is clear to me that there is a severe lack of trust between counterparties and growingly between countries. US Dollar, EURO ... people in China is simply asking what can "IT" gets me. Market is clearly still in risk reduction mode with low liquidity. Several players are taking bets on bailout plans, FED announcements, ECB, housing, economy... in such

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Gold Poised for Biggest Monthly Gain Since 1999 as Dollar Drops

2008-11-29T02:43:00.002-05:00

Bloomberg latest article on Gold paints a bullish picture (28 Nov 2008 - Bloomberg - Gold Poised for Biggest Monthly Gain Since 1999 as Dollar Drops)Gold headed for its biggest monthly advance since 1999 in London as a weaker dollar increased the appeal of the metal as a hedge against further declines in the U.S. currency. The dollar is poised for a third monthly decline against the yen and its

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Is Gold deleveraging over? Comex Gold about to rally?

2008-11-22T09:53:00.005-05:00

Trader Dan at Jim Sinclair's Mineset (21 Nov 2008 - JSMineset - Trader Dan Comments On The Ongoing Comex Liquidation) gave a great summary of the effect of deleveraging in paper gold market.He wrote " ... more than 50% of the players who moved towards gold over the last 2 ½ years are gone from the market. ... the shorts were more eager to get out than the longs were which is really saying

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Mint suspends orders amid rush to buy bullion

2008-11-21T21:17:00.003-05:00

This article continues our theme of panic buying in Gold Coins (22 Nov 2008 - the Australian - Mint suspends orders amid rush to buy bullion)Here is the article with my emphasis in bold.FEARS of the unknown long-term effects from the global financial crisis have sparked a new gold rush.With retail and wholesale clients around the world stocking up on the precious metal, the Perth Mint has been

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Gold Stocks Outperformance Continue!

2008-11-21T20:52:00.006-05:00

With the Gold strength today, Gold stocks managed to continue its outperformance versus the S&P. The technical picture remains strong and well supported. The Ratio has broken the interim resistance at 0.1 and looking for 0.12 resistance from the down channel. Both MACD and RSI shows bullish pattern.We have argued on our Nov 5 post (5 Nov 2008 - Gold Boom Doom - Gold Juniors more to meet the eye)

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GOLD breaking out!

2008-11-21T12:40:00.006-05:00

Gold is trading strong today! We just cleared 797, the 55d moving average, now trading above 800.We are seeing good buying flow on the back on USD weakness, continual talk of China/Middle East buying and real physical market shortage. Given COMEX delivery is coming up next week, I think that we can get a good squeeze to 910, especially if cta turns to buy.Today's chart:Daily Chart from Nov 2007

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The Latest Bear Market Sucker’s Rally Has Gone Bust as We Are Headed Towards Stag-Deflation

2008-11-20T23:09:00.002-05:00

Roubini sums it all up:19 Nov 2008 - RGE Monitor -The Latest Bear Market Sucker’s Rally Has Gone Bust as We Are Headed Towards Stag-DeflationWith major US equity indices free falling over 6% today Wednesday, ending below their October lows and now being back to 2003 levels the latest bear market sucker’s rally is now officially over. A cacophony of delusional bulls – including allegedly savvy

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Financial Market Armageddon - what a depressing day!

2008-11-20T16:31:00.009-05:00

Just want to post this for the record:Global EquityGlobal CommodityGlobal Bond MarketVIXGlobal FXCitiBank Stock

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Gold Standard - the ulitmate bailout?

2008-11-19T20:31:00.006-05:00

The global economy is in a mess. The only solution that the Governments of the developed world is to spend our way out of it. Unfortunately our Governments are massively in debt already which means they have to print our way out of it. The main creditors Japan and China are going to stop lending to us. We have already discussed the problem of leveraging on the taxpayers which is what these

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