You're Using Coconuts
By Jon Nadler
another attempt at $930 materialized in the gold
markets this morning, and it appears that,
perhaps, there just might be success to report,
this time around. Further hurdles are still
present on the road to the magic four-digits,
mainly around the $950 area. As reported
yesterday, the market also needs to see
investment demand overcoming offtake slumps in
fabrication and surging scrap supplies, in order
to first sustain current levels and then be able
to make a go of it to the 1K pinnacle.
While there is enough worry going around the
world to catalyse such a shift, there is also
plenty of price-consciousness and need for cash,
to temper the process. These are tough times for
some, and happy times for others, in the gold
business. As for the future, the battle of the "Flationists"
rages on, with the "De" camp currently grabbing
the headlines, and the "In" troops forming a
Roman Turtle of golden shields to protect them
from some kind of rumbling they feel in the
ground under their feet.
And then, there is confidence. The almost
complete lack of same, and the desire for
instant gratification makes for very cranky
investors. Like the ones we saw pulling the
'sell' trigger yesterday, when Mr. G -the
messenger- took the wraps off "The Plan." Nobody
seems to have the time to build Rome when signs
point to Paris burning...
Gold prices rose to an all-time high overnight.
In India, that is, where parents of pretty
brides-to-be must now shell out 1,450 Rs for a
gram of yellow metal. Consider that some of the
brides often wear what amounts to a kilo of gold
and you can start computing...
...what it must cost to properly launch one's
daughter into married life. Say, $30K for
starters. Better consider calling Jamal Malik
for a handsome marriage prospect.
New York spot gold prices opened with a $12
gain, quoted at $927.30 on a background of
nervousness and as the dollar gave back a modest
amount of previously achieved gains.
Participants eyed a rise in oil prices, ahead of
the release of US inventory data, and on
perceptions that OPEC's recent cuts are perhaps
beginning to have some effect. However, the IEA
projects about half a million fewer barrels of
black gold to be consumed daily, this year. The
US trade deficit fell to a six-year low. We say,
what trade? China's exports fell 17.5% last
month, at the fastest rate since 1998.
Silver rose 13 cents to $13.30 per ounce, while
platinum managed to maintain gains and climbed
to $1048, up by $14 on the day. Palladium did
nothing, and opened flat, at $211 an ounce.
Metals traders are going to ponder the effects
of that news and watch what the dollar has to
say. The shrinkage reflects an economy that is
imploding faster than the rest of the world
-even if that other part is not doing too well,