Wednesday, March 2, 2011

The Scent Of Inflation

Gold and Silver remained firm overnight following yesterday's afternoon run up on the CRIMEX. Both are moving higher as the CRIMEX opens this morning for market rigging.

The US Dollar begins today again clinging to it's existence as the World's Reserve Currency having yesterday's tiny gains beaten out of it overnight. The Dollar was observed testing recent lows early this morning down around 76.75 on the US Dollar Index.

Reports from ADP Employer Services that private payrolls increased by 217,000 last month appear not to have any wind for the Dollar's sails this morning.

Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.

That might be the understatement of the week heading into this Friday's non-farm payrolls report. Anything these headline writers in the financial media can put in bold type above their economic recovery fluff pieces to instill confidence in the public's perception of said "recovery" should be questioned immediately.

I have some concern this morning that this move higher in Gold is not being confirmed by the RSI readings in any short-term time frame. The breakout at $1416 may have to be tested first before Gold can move much higher from here. It should be noted that Jim Sinclair has long looked at $1444 Gold as a battle front for the bulls. This morning we find Gold within view of that hilltop.

A similar concern with Silver's short-term chart exists relative to bearish divergence in it's RSI, however a MACD bullish crossover appears in the making to support this run higher. Silver has an upside target of 35.55 here, and key support to this up leg rests at 34.60 just below price here at 9:15AM. A breach of the breakout at 34.32 could see Silver back down to visit $32.75 - 33.

Bernanke: Rising Oil Prices Don't Threaten U.S. Economy
WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Tuesday the surge in oil prices is unlikely to hurt the U.S. economy unless it is sustained, even as investors sold off equities on fears of a slowdown.

Bernanke, making his first comments since the turmoil in Libya drove U.S. crude oil above $100 a barrel, said he would expect higher prices to lead to only a modest, temporary increase in U.S. inflation "at most."

Life is blissful floating down the river of De Nile...

Bernanke: Rising Oil Prices a Threat
NEW YORK (TheStreet) --Federal Reserve Chairman Ben Bernanke reiterated the central bank's benign outlook for inflation but said that the central bank is ready to respond to the surge in global commodity prices when necessary.

Testifying before a senate panel to deliver his semi-annual monetary policy report,Bernanke said the Fed's outlook for inflation remains low. Most Fed officials forecast inflation at 1.25% to 1.75% for 2011 and in the range of 1% to 2% next year and in 2013. He also noted that inflation expectations were firmly anchored, citing measures derived from inflation-indexed treasury bonds and household surveys of consumer's inflationary expectations.

That this clown can get away with such utter hogwash is infuriating. His "outlook" may be for low Inflation, but the facts do not support his wishful thinking. Just because Bumbling Ben says so don't make it so.

"The most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in U.S. consumer price inflation," Bernanke told the Senate Banking Committee.

Sure thing Ben, and the subprime housing crisis will be contained. Here, have a breath mint, you're full of sh*t.

Euro-Zone Producer Prices Surge‎ - Wall Street Journal

World factory input costs rising sharply (Reuters)

Cost of Fed actions starting to offset benefits: El-Erian- CNBC

1 comment:

  1. Thx a lot for the daily update.

    oil jumped about 10% last mth. gold should jump at least 10% from $1400 base too. So I expect gold to reach $1550 by end of April.