Monday, November 9, 2009

GATA Offers A Look Behind The Curtain

I have been away from "everything" for the past four days while celebrating my 29th birthday for the 20th time. Until I get caught up sometime tomorrow, hopefully, my comments will be brief.

Gold appears very "toppy" up here around 1100. A brief reaction in price is to be expected, but with the Dollar again testing recent lows around 75, the top could blow off this chart at any time. Should a reaction occur, look first for support at 1070, and then near 1040. A reaction lower here to test recent breaks higher would be very healthy for the Gold market going forward as opposed to a blast higher here.

Silver remains stuck in a bit of a consolidation pattern between 16 and 18 going back to mid-September. Silver has lagged Gold by a substantial margin during Gold's most recent leg higher. It would not be a surprise if Silver prices were to remain somewhat firm here in the event of a reaction lower in Gold prices. 17.65 is proving to be a bit of an obstacle to Silver presently. 16.45 remains a key price point for Silver at this time. Support at 16 looks solid should Gold remain above 1040.

As each day passes, the fundamental reasons for possessing Gold and Silver solidify.

G20 leaves door open for fresh pressure on dollar
LONDON (Reuters) - The U.S. dollar may come under renewed pressure from emerging market currencies and the euro after a meeting of the world's top finance officials failed to take concrete action on rebalancing global money flows.

Finance ministers and central bank governors of the Group of 20 major countries, meeting in Scotland at the weekend, launched a "framework" in which they will discuss how to reduce trade and savings imbalances between nations.

But their communique talked only in general terms about rebalancing economies, and implied they might not agree on specific policies for individual countries to adopt before the end of next year at the earliest.

The result may be a continuation of heavy fund flows into emerging markets, boosting currencies there. And central banks intervening to slow currency appreciation may keep investing much of the money they obtain in the euro, pushing up that currency too.

"We're probably looking at fresh dollar weakness in the short term" in the wake of the G20 meeting, said Kenneth Broux, senior markets economist at Lloyds TSB.

"Economic and financial conditions have improved following our coordinated response to the crisis," G-20 officials said in a statement. "However, the recovery is uneven and remains dependent on policy support, and high unemployment is a major concern. To restore the global economic and financial system to health, we agree to maintain support for the recovery until it is assured."

That sounds to me like the printing presses at central banks around the globe will continue to run without rest. And that to me smells like a recipe for inflation. Is it any wonder the Dollar was trashed today and Gold rose to yet another new nominal high in price?

The following link should be read by any and all interested in being "invested" in the Gold market. Chris Powell and GATA have worked tirelessly over the years to expose the central banks supression of the price of Gold. Chris Powel's remarks at the International Precious Metals and Commodities Show in Munich, Germany were described by one GATA member as
"the sanest, most thorough explanation of the world of gold that I have yet to encounter. Your remarks, coupled with supporting links, should be required reading for anyone contemplating an investment in gold-related assets."

Gold suppression is public policy and public record, not 'conspiracy theory'
Remarks by Chris Powell, Secretary/TreasurerGold Anti-Trust Action Committee Inc.International Precious Metals and Commodities ShowOlympia Park, Munich, GermanySaturday, November 7, 2009
On Friday, September 25, Jim Rickards, director of market intelligence for the Omnis consulting firm in McLean, Virginia., was interviewed on the cable television network CNBC in the United States. Talking about the currency markets, Rickards remarked: "When you own gold you're fighting every central bank in the world."

That's because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the price of government bonds. And that's why central banks long have tried to suppress the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power.

As an independent currency, a currency to which investors can resort when they are dissatisfied with government currencies, gold carries the enormous power to discipline governments, to call them to account for their inflation of the money supply and to warn the world against it. Because gold is the vehicle of escape from the central bank system, the manipulation of the gold market is the manipulation that makes possible all other market manipulation by government.

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