Tuesday, June 5, 2007

The Countdown Has Begun


"Having broken from its $655-to-$665 range, gold is likely to generate some further momentum in the week ahead," said James Moore, metals analyst at TheBullionDesk.com, in a research note.

“The dollar weakness should give gold a boost,'' said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. “People are looking for gold to go higher.''

“The market is focusing on inflationary concerns,'' said Nick Ruggiero, a trader at Eagle Futures Inc. in New York. “We have a lot more investors looking to trade gold as a hedge against their stock portfolio.''


“There isn't a real reason for gold to move higher from here,'' said Ralph Preston, a senior market analyst at Heritage West Financial Inc., a futures brokerage in San Diego. “Momentum is petering out. The dollar needs to make another low, and oil needs to start mounting a challenge on its record.''

"You don't have a lot of really bearish news and you also don't have a lot of bullish news. I would be surprised if we broke out of a trading range of $660-$680 in the next few days," said Michael Widmer, director of metals research at Calyon Corporate and Investment Bank.

"The dollar is still important because it limits the upward movement of gold prices. The currency gained a lot in the last few weeks, and there is little indication that the dollar will fall again substantially in the near term."

Well Mr Widmer, the Dollar on Monday crashed through it's up trendline and continues down this morning, Tuesday, June 5th. The Euro has cracked 1.35 to the upside, and traders there eagerly await tomorrow's ECB interest rate call and accompanying "words".

Monday's consolidation of recent gains in both Gold and Silver should not be of a surprise to any one...especially when considering the trepidation that swirls around any "fall" in the Chinese Stock market. It is odd though that the Chinese market can have such a "psychological" effect on world traders when the world is virtually banned from investing in the Chinese Stock Market. There are Chinese stocks that trade on "world markets", but the world markets can't trade Chinese stocks in China. Follow me?

What was surprising was that with the Dollar firmly down and Oil again rising, the metals didn't get a bit of follow thru Monday. I suspect they will shortly, and Gold $700 headlines will not be far behind.

Some very interesting reading below. Please follow the links to enlightenment.

Gold: $666 and Rising? By: Adrian Ash
Anyone wanting to bet on a cheaper Dollar – or simply hedge themselves against the grinding decline in all currency values – might do well to avoid Euros, Sterling and Yen. Gold remains the only world currency not open to debasement, competitive devaluation, or the excessive promises of overspent governments. And at $666 per ounce on average right now, it also remains within spitting distance of the highs for this bull market so far.

We're Mad as a Hatter By: Charleston Voice
Now that we're back on the bull track, several have asked what I've been asking myself - "How high is up?" Answer: We don't know. Even in timeframe terms we don't know. Especially in time how long we'll rally in gold, we don't know. There have been an abundance of commodity cycle runs which seem to cluster around the 17-25 year timeframes. Even when they begin is debated. It only makes a difference if you don't recognize the end of it when it's upon you.

Silver: The Long Term View By: Roland Watson, The Silver Analyst
Back in the depression year of 1932 silver was suffering. It had hit a low price of 24 cents per troy ounce as the forces of deflation assaulted commodities across the board. Could things get any worse as no end seemed in sight to the widespread massacre of assets across America and the world?

Silver Resistance: 13.69 / 13.83 / 14.04

Silver Support: 13.55 . 13.49 / 13.37
____________________________________All prices SPOT

Gold Resistance: 672 / 675 / 681

Gold Support: 667 / 664 / 662

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