Tuesday, January 15, 2008

Chinese Calvary To Conquer COMEX Crooks?

The Gold Bull is raging and looks relentless in it's pursuit of higher prices. I have urged caution in buying at these prices and continue to do so...if you're a "trader". But if you are looking to "invest" in Gold, then no time is a bad time to buy a ticket to "infinity and beyond"...well to the Moon anyways. Investors across the globe have begun a wave of buying in the Precious Metals that over time will almost certainly turn into a tsunami that will overwhelm the markets.

It should not be overlooked that on January 9 the Chinese opened a Gold Futures Exchange in Shanghai. Gold has quickly risen 6% since then, to a new all-time high of 914. The Chinese are notoriously big Gold Bugs, and this new "trading vehicle" now available to them could become a considerable adversary to the Criminals on the NY COMEX. Step back in time to November 2005. This is when the Dubai Gold Exchange opened. Gold demand in the Middle East has existed for centuries...and now they had a Gold Supermarket right in the middle of town. The record is pretty clear what followed the debut of that exchange...Gold rose almost $300 over the following six months. Could the new Chinese exchange have a similar effect on the Gold market going forward? Well, there's over one billion reasons to consider it.

Big economic data day today. Producer prices and retail sales numbers for December will appear. Couple this data with the news about Citibank write-offs and layoffs and it could be a wacky day.

A quick note about the charts and RSI. RSI stands for Relative Strength Index. It gives some indication as to when prices are overvalued and undervalued. As a measure of value then, prices do not necessarily have to drop, or even drop significantly to show value. Value in price can develop as a result of time. Prices can move sideways, and consolidate, as the RSI falls. Nobody knows when prices will tank, or rocket higher, but when looking to buy, it's always best to look for value before you do. Nobody wants to pay more than they have to for their metal. RSI is an indicator best used by traders to help them "buy low, and sell high".

Bush lodging oil price complaint with Saudi hosts
RIYADH, Jan 15 (Reuters) - U.S. President George W. Bush complained in Saudi Arabia on Tuesday that soaring oil prices were threatening the U.S. economy, raising pressure on the world's top oil exporter to help ease prices.

"I would hope, as OPEC considers different production levels, that they understand that if their -- one of their biggest consumers' economy suffers, it will mean less purchases, less oil and gas sold," he said.

OPEC, source of more than a third of the world's oil, has repeatedly said it is pumping enough crude to meet demand and blames speculation, a weak dollar and geopolitical tensions, such as fears of war with Iran, for record high oil prices.

And OPEC has hit it right on the head too. George Bush will never get it. If he did, he'd have to tell the American public the real reason why Oil prices are so high. The value of the US Dollar is falling through the floor. The American Public has been trained to believe that pumping more Oil will bring prices down... good luck that.

Largest Saudi bank urges government to cut dollar exposure
RIYADH, Saudi Arabia -- Saudi Arabia's largest state bank urged the government to reduce the kingdom's exposure to the dollar by investing more assets outside the United states and gradually changing the riyal's peg to the weak U.S. currency.

National Commercial Bank, Saudi Arabia's biggest by assets, said the world's largest oil exporter should set up a sovereign wealth fund to invest surplus revenues, now partly managed by the central bank, which has $285 billion in foreign assets.

Mr. Bush might want to discuss this matter with the Saudis instead of Oil production. The Saudis get it, why doesn't he? The Saudis could have limitless supplies of Oil, but as long as the Dollar continues to swirl in the toilet bowl, Oil prices will remain higher than they maybe should be.

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