Tuesday, May 1, 2007


This entire day can be summed up by illiquid markets in metals and currency trading due to Worker’s Day celebrated everywhere outside of North America combined with a slightly strange major up tick in the ISM while all the drivers of the US economy headed into the rat trap. -Jim Sinclair Tuesday, May 01, 2007, 5:20:00 PM EST

"...headed into the rat trap..." You've got that right.

It would be easy to spew forth with a string of expletives to express one's frustration with the Precious Metals Markets the past 10 days. Go Ahead, let a couple F-bombs drop. Ahhhh, feel better? Been down this road countless times already folks, ...IGNORE THE NOISE! Focus on the fundamentals. Nothing in the fundamentals has change the FACT that Precious Metals, OIL, and most all commodities WILL BE heading higher, and the US Dollar WILL BE heading lower. Nothing that was "news" today or yesterday or the past 10 yesterdays changes anything.

April ISM manufacturing index rises to 54.7 from 50.9 in March

Whoop-de-freaking-do! Buried within that ISM report was this little reported truth:

However concerns at the US Federal Reserve about inflationary pressure are unlikely to have eased with the prices element up 7.5 pct as manufacturers reported widespread increases in commodity prices.

GM, Ford, Toyota, Honda Post April Sales Declines

May 1 (Bloomberg) -- General Motors Corp., Ford Motor Co., Toyota Motor Corp. and Honda Motor Co. posted U.S. sales declines in April as waning consumer confidence and rising gasoline prices curbed demand for new vehicles.

Oh, that sounds positive. Put it upside this next one and obviously the worst is behind us...LOL, Yeah, right:

U.S. Economy: Manufacturing Rises, Home Sales to Drop

The manufacturing report showed a jump in orders and employment, signaling that the slowdown won't get much worse. At the same time, any rebound is likely to be muted as long as housing remains in recession, economists said.
``You are getting some confirmation'' that ``things are improving,'' said Robert Mellman, an economist at JPMorgan Chase & Co. in New York. ``Housing may not be getting better, but it's going to be less of a drag in the second quarter.''

"...less of a drag..."? Less of a drag my ass. The housing blowup is going to drag this economy down for months to come. If anything, housing IS going to be even MORE of a drag in the second quarter. JP Morgan...the Oracle of Lies.

I don't know that there is a single adjective that can describe this form of reasoning:

N.Y. Oil Drops Most in a Week on Signs U.S. Supplies Increased

May 1 (Bloomberg) -- Crude oil fell the most in a week in New York on speculation a U.S. government report tomorrow will show inventories rose as some refineries shut units for repairs.

Signs? SIGNS? What freaking signs? Let's see now...refineries were shut, so we couldn't refine the crude, so that means we will have more of it. Brilliant! And what will happen once they begin to refine the oil again? LOL!

"We're in big trouble," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. He noted that inventories stand at 194.2 million barrels -- or slightly above the levels reported in the days after Hurricane Katrina struck the Gulf Coast in 2005 -- and he predicted that that the average prices this summer will surpass the 2005 record of $3.06 a gallon.

New York gasoline futures hit an 11-month high on Monday after refinery shutdowns. On Tuesday, the contract RBc1 was up 0.23% at $2.2645 a gallon.
U.S. gasoline stocks are expected to have fallen last week for the 12th week in a row, a preliminary Reuters poll of analysts showed.

Yeah, I guess we better sell Oil. There's just to damn much of it sitting around. I'll go on the record right here and now: OIL WILL BE AT $80 A BARREL BY THE 4th OF JULY.

Gold Supply Falls Short of Demand Reports Kevin DeMeritt of Lear Financial

The discovery rate of major gold deposits has declined in each of the last eight years while the demand for gold by investors and industry has increased. http://www.prweb.com/releases/2007/05/prweb522503.htm


Investment demand boosting precious metals prices: CPM

Gold could rise sharply, to last May's $732/oz, 1980's $850/oz or some other phenomenal number, in this environment," said CPM. "Silver could spike to levels above $15/oz, platinum to $1,350/oz or higher and palladium to something above $410/oz."

CPM expects gold to hold above $675/oz to $680/oz over the short term because it has technical support "at various points" down to its "key support" around $645/oz. "There remains a great deal of buying interest on the part of investors in many parts of the world," it said.

CPM continued: "Silver probably will hold above $13.50/oz; its main technical support is around $12.80/oz. Platinum probably will hold above $1,270/oz. Its major support is around $1,210/oz and $1,225/oz. Palladium is expected to remain above $370/oz; its main support is at $360/oz." http://www.platts.com/Metals/highlights/2007/mp_mw_042707.xml

Investment demand is the single most overlooked "fundamental" characteristic of the Precious Metals. Investment demand is what will ultimately bring dem Rat Bastids to their knees and crush the vermin.

Can the “Axis of Oil” Topple the US Dollar? http://news.goldseek.com/GoldSeek/1178038676.php

Gary Dorsch's piece linked here on goldseek.com is an absolute must read. There is some serious TRUTH unleashed in this piece.

IGNORE THE NOISE in the daily blah blah. Focus on the big picture AND the fundamentals. Precious Metals are on sale this week because most of the other side of the world is on vacation. Take advantage of these buying opportunities.

I have my convictions...I don't consider myself a "permabull" but a realist. And the reality is Precious Metals, Oil, and commodities in general are ALL in secular bull markets. No bull market, no matter how powerful, goes straight up. The US Dollar is in a secular bear market. No bear market, no matter how ugly, goes straight down. It is safer to be long this commodities bull market than out of it...or short.

Silver Resistance: 13.39 / 13.44 / 13.55

Silver Support: 13.27 / 13.20 / 13.10

_______________________________All prices SPOT

Gold Resistance: 675 / 677 / 681

Gold Support: 672 / 670 / 666

1 comment:

  1. A "Federal Reserve Note" is not a U.S.A. dollar. In 1973, Public Law 93-110 defined the U.S.A. dollar as consisting of 1/42.2222 fine troy ounces of gold.