Clearly the US Dollar is on the ropes. The past two trading days have been less than kind to Charmin's dirty cousin. Gold and Silver have been the beneficiary of this Dollar downturn. But as everybody knows, there will be NO surprise if the Dollar finds some "mysterious" buyers today and Gold is "sold on profit taking". LOL, "profit taking"...
Gold made another nice move Monday, and has now retraced 50% of it's fall from early June highs around 675. 653 now becomes near term support and 661 the next level of resistance.
Silver had a stunning day. Silver shorts were pressured out of the box Monday as Silver left them slack jawed as it broke away 12.46. Silver is now back to it's 65 week moving average and may have to fight tooth and nail to get that line back and hold it. It will have to save some strength for the battle royal looming at 12.75.
Oil was very strong once again today overcoming early weakness to close over 71 at a 10 month high.
The worthless US Dollar, as always, will be the ultimate key to the Precious Metals future. As it strives to prove it's worthlessness going forward, Gold and Silver will push to squeeze the shorts.
Tuesday, July 3, 2007
Sunday, July 1, 2007
What A Load Of Crap!
Under the US Mint Act of 1792, the dollar was pegged at 24.75 grains of gold. There are 480 grains in a troy ounce. Thus it took 19.4 US dollars to purchase a single troy ounce of gold. As of Feb 23, 2007 it takes nearly 683 US dollar to purchase that same troy ounce of gold. That represents a 97% drop in value!
The US Dollar isn't worthy of use as toilet paper...matter of fact, one should pick up Dollars with toilet paper. The piece of dung is down some 40 pips on Friday and Gold and Silver both close down? What a load of crap! Oil vaults $70 on the same day the Dollar loses 40 pips, and Gold and Silver close down? What a load of crap!
I could string together a collection of expletives here that could summarize all our feelings about this, but it would simply be a waste of breath. Let's go to the chart of Gold for the month of June:
Please click on the http://www.usagold.com/ chart above to enlarge.
As I've been saying, Gold and Silver will probably flounder around trying to establish a bottom thru the 4th of July. Friday Gold rose to and died at it's downtrend for the month going back to the high on June 8th. We had options expiration this week and Friday was the close of the 2nd Quarter. By hook and by crook the price of gold is being stifled in an attempt to prevent the truth about the economy from becoming a realization. For Gold is the Truthsayer, and the truth will be told. The battle between the Bulls and Bears in Gold is full on. All we can do is stand by now, and be witness what may soon be the detonation of financial Armageddon.
Needless to say, sentiment in Gold right now is pretty negative. And when one side of the boat gets to full, it's best to get on the other side to avoid going under with the herd when the boat finally tips. Amatures are beginning to throw short on Gold now, believing that Golds back has been broken. Hardly... A powerful short squeeze is imminent.
Gold was blatantly power dunked by dem sleazy Rat Bastids on the Comex from noon till the close Friday. It was as disgusting as it was blatant. But like a beach ball being pushed under the water by Shamu the Killer Whale at Sea World, it can only be held down so long. And when it breaks the surface, that ball flies high above the crowd...just as Gold will when it breaks the June downtrend line above. Continued weakness in the Dollar, coupled with Oil remaining over $70 and a close in Gold over $653 could well push the panic button for the shorts in Gold. Most every rally in Gold throughout this secular bull market has been launched with a short squeeze.
Silver has a LOT of work to do. First it must surmount the fools looking to pile on shorts at 12.46. It must then put 12.60 behind it in order to put some much needed pressure on the shorts. The shorts will fight to the death up and to 12.75. 12.75 is where the Battle Royal between good and evil in Silver will take place for bragging rights for the balance of 2007.
Recommended insightful reading:
$250 Billion in Subprime Losses?
By: John Mauldin, Millennium Wave Advisors
Thursday, June 28, 2007
Stick A Fork In The Dollar
Oil Futures Settle Below $70 a Barrel After Rising As High As $70.52 on Supply Concerns
Federal Reserve Holds Interest Rates Steady; Policymakers See Improvements on Inflation
WASHINGTON (AP) -- The Federal Reserve held interest rates steady Thursday, extending a yearlong breather for borrowers. Although policymakers observed improvements on inflation, they made clear they were not ready to declare victory on that front.
US Q1 GDP growth revised up to 0.7 pct, core PCE price index up 2.4 pct
WASHINGTON (Thomson Financial) - The US economy grew slightly faster in the first quarter than last reported, but inflation was also higher, according to Commerce Department revisions.
The Federal Reserve "policymakers" [aka: boobs] observed improvements on inflation. While on the other side of town the Commerce Department "statisticians" tell us that inflation is higher. Who should we believe? GOLD! Why Gold? Because Gold is the Truthsayer. In spite of everything the PPT and dem Rat Bastids have thrown at Gold, Gold is $65.30 higher today than it was one year ago as I type this... +11.2%. Core inflation is fiction!
'Sub-prime Chernobyl'
Nouriel Roubini, economics professor at New York University, said there were now concerns about "systemic risk fallout" from the Bear Stearns debacle as investors look more closely at the real value of CDOs.
"These highly illiquid securities have been priced so far on unrealistic and distorted credit ratings as the ratings industry has been complicit," he said.
"They have not been rerated in a way that is consistent with rising subprime default rates," he said. "That is why Wall Street is in a panic. Losses will be massive once these assets are correctly priced to market."
Lombard Street said the Bear Stearns fiasco was the tip of the iceberg. The greatest risk lies in the "toxic tranches" of lower-grade securities held by the banks.
Much-trumpeted claims that banks had shifted off the riskiest credit exposure on to the asset markets was "largely a fiction," said Mr Dumas.
The worst of the US property crisis has yet to hit since there is an overhang of $2,000 billion of mortgages with adjustable rates that have yet to be reset. Many borrowers could see payments jump by half, or even double.
Gold made a surprisingly quick move to 648 today. Efforts to sustain a move higher ran out of gas. A revisit to 645 before we move higher should not be unexpected. Silver ran into a wall at 12.48. Resistance at 12.46 was expected as Silver worked it's way back to it's 65 week moving average. Both have laid the foundations to their respective bases today. This base building could persist through The 4th Of July.
All technical analysis aside...the fate of the Precious Metals rests with the US Dollar. (please see chart above) It always has, and will continue to, as these metals grind ever higher. Technically however, the Dollar appears to be approaching a crossroads as it's Bear Market mini-rally runs out of gas. Absent the weak handed bears in the Dollar, nobody would want this generic toilet paper...most folks would probably opt to use their bare hand... Should the Dollar lose support at 82.02, a commodity rally could ignite swiftly, carrying the Precious Metals higher. Further decay in T-bond prices and a swamping of Wall Street may also result.
Folks should be selling their Dollars to "avoid risk", not their Gold.
Wednesday, June 27, 2007
The Truth Is Out There
Gold touches 3-month low as investors cut risk
Wed Jun 27, 2007 6:50AM EDT
Wed Jun 27, 2007 6:50AM EDT
If you recently sold your Gold to "avoid risk", I hope you use your proceeds to pay to have your head examined. Yes Gold is a metal...it is NOT a commodity. If you ask me, the "risk" is having your money sitting in cash. Ahhh, the fool and his money...
Oil finishes just shy of $69 a barrel
June 27, 2007, 5:26PM
The Energy Department reported Wednesday that gasoline inventories dropped by 700,000 barrels in the week ended June 22, contrary to the 1.1 million gain that had been expected by analysts polled by Dow Jones Newswires.
Shocking! I could have swore we were told for the past week that refiners were getting more gasoline from a barrel of Oil.
Refinery utilization rebounded 1.8 percentage points to 89.4 percent, higher than estimates of a gain of 0.8 percentage points.
Shocking! Higher refinery utilization and less gasoline...but aren't we getting more gasoline from each barrel of Oil? Geez, I guess not. Oh, and what's this little note?
...gasoline imports, which had propped up supplies the previous week, dropped by 300,000 barrels last week.
Just as I had suspected a week ago. LOL, more gasoline from a barrel of Oil. The sad part is, is that people believe this crap. Who was it that said there's a dumb ass born every minute? Wait, I'm sorry, that was "...a sucker born every minute..."
Speaking of suckers...were we not told two weeks ago that yields on T-bonds were rising because the economy was going to be so much stronger going forward? Yes I believe we were. Of course, this is what "they" wanted you to believe. Yields are rising on T-bonds because nobody wants to buy the USA brand toilet paper anymore. Seems nobody wants to buy "durable goods" either:
ECONOMIC REPORT
Demand drops for business-investment goods
Orders for durable goods decline 2.8% on broad-based weakness
Demand drops for business-investment goods
Orders for durable goods decline 2.8% on broad-based weakness
2:50 PM ET Jun 27, 2007
The figures throw some cold water on the theory that business investment will be strong enough to power the U.S. economy out of a slow patch that's lasted more than a year.
"You can't look at these results and say the economy is becoming overheated," wrote Ken Mayland, chief economist for ClearView Economics.
I Can See Clearly Now...
Orders for all durable goods fell 2.8% in May, led by a hefty 22.7% drop in orders for civilian aircraft. Orders for all sorts of durable goods were weak in May; only electronic and defense goods recorded an increase.
Isn't it amusing how quickly "civilian aircraft" orders are mentioned in "the story" when durable goods numbers suck...but when they beat estimates that civilian aircraft orders number is buried somewhere near the bottom of "the story"?
There are now countless reasons for Gold and Silver's weakness of late. The more I look into this the more convinced I am that this little item may have been a heavier hammer than many first thought:
Japanese Finance Minister Koji Omi has reportedly warned the markets against making "one-way" bets, in an apparent reference to the recent massive popularity of carry trades that have caused the recent slump in the yen. This is a risky strategy where investors borrow in low-yielding currencies in order to invest in higher-yielding assets elsewhere.
To add to that, the Nikkei Kinyu Shimbunm reported that the MoF has changed its currency stance, alongside rumours that Japanese currency spokesman Hiroshi Watanabe -- who has been a proponent of yen weakness -- is set to leave his post.
"In light of what appears to the first signs of a sustained campaign of verbal intervention from the MoF in support of the yen, this change (Watanabe departure) looks potentially meaningful," said Neil Mellor at the Bank of New York.
The "yen carry trade" is too often wrongly blamed for declines in Precious Metals...but then we have people dumping Gold to avoid risk. Go figure...
Want some real insight into the Bear Stearns Collateralized Debt Obligations fiasco? The fuse has now been lit on what Warren Buffet has most often called the financial derivatives WMD. Talk about risk! Please take the time to read William H. Gross', Managing Director of PIMCO, Investment Outlook, July 2007.
Those that point to a crisis averted and a return to normalcy are really looking for contagion in all the wrong places. Because the problem lies not in a Bear Stearns hedge fund that can be papered over with 100 cents on the dollar marks. The flaw resides in the Summerlin suburbs of Las Vegas, Nevada, in the extended city limits of Chicago headed west towards Rockford, and yes, the naked (and empty) rows of multistoried condos in Miami, Florida. The flaw, dear readers, lies in the homes that were financed with cheap and in some cases gratuitous money in 2004, 2005, and 2006. Because while the Bear hedge funds are now primarily history, those millions and millions of homes are not. They’re not going anywhere…except for their mortgages that is. Mortgage payments are going up, up, and up…and so are delinquencies and defaults. A recent research piece by Bank of America estimates that approximately $500 billion of adjustable rate mortgages are scheduled to reset skyward in 2007 by an average of over 200 basis points. 2008 holds even more surprises with nearly $700 billion ARMS subject to reset, nearly ¾ of which are subprimes.
People, when this bomb goes off, you'd better own some precious Metals. And folks...the bomb Will go off.
Are you sure you want to sell your Gold to avoid risk?
Booms Were Made to Go Bust
China's advantage is that it learned from Japan's mistakes. That's why the Chinese stubbornly refuse to revalue their currency -- they don't want to make it more expensive the way the Japanese did theirs.
Currently, the Chinese yuan is pegged at 7.6 yuan to one U.S. dollar. This makes the United States accuse China of being unfair; we'd like to see the yuan float the way the Japanese let the yen float. This would make it easier for us to reduce our balance of trade, as well as pay back our debt with cheaper dollars.
The problem is that the Chinese know from the Japanese experience that we can talk tough but not act tough -- they simply hold too much of our debt for us to take measures. And if the Chinese started dumping U.S dollars and bonds on the world market, the world economy might well crumble, just as the Japanese economy crashed nearly 20 years ago.
Time for a New Standard
While it's tough to predict the future, one thing is for certain: The U.S. dollar will continue to go down in value, and savers will be losers. With people all over the world piling debt upon debt and spending like fools, it might be best to follow the Chinese.
They've never trusted banks, but have always trusted gold. Maybe it's time we started doing the same.
Once again Gold and Silver should have been up today. Yesterday's blah-blah that the drop in Oil prices lessened inflation fears was hogwash...as a matter of fact, yesterdays drop in Oil prices was hogwash. Oil is going higher, Oil is going higher, Oil is going higher...there, I won't mention it again. The big "Fed rate decision" will be the nonevent of the week. The Fed has lost control of interest rates...the market controls them now. Gold is the Truthsayer, and the PPT will do anything and everything with the aid of dem Rat Bastids to try and keep the shine off Gold.
Silver today caught up to Gold and printed bullish divergence on it's hourly charts. Both metals will attempt to build bases here...success in that matter remains to be seen. A "new" bottom could be in if Gold closes above 648. 645.50 may, or may not, slow Gold in that attempt. As for Silver, the repair work needed is extensive. Silver needs to close back above 12.60-5 to suggest a "new" bottom is in. 12.46 may, or may not impede the work necessary to repair Silver. I would not be surprised if both metals fished for this bottom through the 4th of July. I would also not be surprised if the US Dollar gets hammered on the Fourth as we celebrate our long since forgotten Independence.
Gold and Silver have now both revisited their respective 65 week moving averages...this moving average has proven since the beginning of this secular bull run in these Precious Metals to be major support and a superb opportunity to buy and profit in these metals. In other words...you couldn't ask for a more "low risk" opportunity to purchase these metals.
Sell your Gold to avoid risk? Perish the thought!
Tuesday, June 26, 2007
STOP! THIEF!
Foaming at the mouth and spitting four letter words like a wood chipper, I have but one word to say that I think all who are reading this can agree on: CRIMINAL.
I posted yesterdays charts for a reason. You could almost smell this BS coming... Look closely at both charts. Trace back along the 65 week moving average to the last time both Silver and Gold breached this line to the downside. The summer of 2005. Both briefly breached their respective 65 week moving averages and then launched colossal run-ups. Ted Butler alludes to this in his post today commenting on today's mugging. His observations and insight, as always, are on the money imo.
The current sell-off in silver and gold is a result of tech fund and other speculative selling (both long liquidation and new short selling) and dealer buying (T. rex short covering and raptor long accumulation). In addition, the sharp decline in silver today can also be traced to a large number of put options that suddenly went into the money on today’s option expiration. Bullish silver investors who sold these puts undoubtedly found themselves in sudden loss situation and had to take the only corrective action they could take to protect themselves, namely, sell silver futures. This was not accidental, but a designed strategy by the dealers. The dealers, large and small, can buy on the way down because they are disciplined and collusive, and are keenly aware of how the markets work. The tech funds and leveraged speculators are not. The current sell-off will end when the last tech fund and speculator sells.
My sense is that we must be close to that point, especially with today’s option expiration. In fact, it feels like the dealers are almost wringing blood from a stone, trying to uncover and engineer the very last sell contract from the non-commercials and non-reporting traders on the COMEX. These dealers seem to be using every trick in the book, including using the overnight markets to their advantage. This engineering has taken on the aura of the last big clean out before the real move up.
It is always important to know, in a broad perspective, the general nature of what you are studying. The recent sell-offs in gold and silver have nothing to do with real fundamentals like supply and demand, and everything to do with dealers’ activities on the COMEX. The most appropriate term to describe this activity is manipulation, because the paper trade is dictating the world price of gold and silver. This is against the law, but that matters little if the regulators won’t enforce the law. The good news is that the market structure only improves on these sell-offs, while the bad news is that it necessarily involves interim pain.
Of course, knowing why and what the sell-off is about can’t tell you precisely how much may be left, so you must govern yourself accordingly. Are the metals a great buy here? Absolutely. Should you buy them on such an extremely leveraged basis that you could lose your position on lower prices? Absolutely not.
One last point. Today’s sell-off was particularly offensive in that there were no outside influences to explain it. It was all COMEX and option expiration related. This is like a mugging in broad daylight with the police just watching. Forgetting the police (the regulators), perhaps even worse is that anyone who follows the market should be aware of what happened. To remain quiet and say nothing and pretend no crime has taken place is morally offensive. If you are a letter writer or advisor, you should speak up. The free market is at risk.
http://news.silverseek.com/TedButler/1182880797.php
Gold showed bullish divergence in it's RSI this afternoon as price made a new low but RSI made a higher low on the hourly chart. 648 is our immediate target. We must ascend to and surpass this number in short order to deter further criminal activity against us.
If you sold your silver today in a panic...I hope you have the good sense to take your money and leave...never to return! Silver has significant repair to do compared to Gold. If you feel like you have been raped, you should...because you have. Silver has fallen all the way back to test it's January lows. Today's mega dump was unusual in that it came following a "downtrend" ...most often when Silver endures an episode like today's it is following an "uptrend". Perhaps as Ted Butler speculates above "this is the last big clean out". A move back to and through 12.65 is imperative. It is tempting to add to positions here, but prudence dictates waiting for a close back above 12.65 .
And if Oil's hokey Crude Invetory numbers don't show a rise tomorrow? Who cares! Oil will be at or near $80 a barrel by Labor Day.
I posted yesterdays charts for a reason. You could almost smell this BS coming... Look closely at both charts. Trace back along the 65 week moving average to the last time both Silver and Gold breached this line to the downside. The summer of 2005. Both briefly breached their respective 65 week moving averages and then launched colossal run-ups. Ted Butler alludes to this in his post today commenting on today's mugging. His observations and insight, as always, are on the money imo.
The current sell-off in silver and gold is a result of tech fund and other speculative selling (both long liquidation and new short selling) and dealer buying (T. rex short covering and raptor long accumulation). In addition, the sharp decline in silver today can also be traced to a large number of put options that suddenly went into the money on today’s option expiration. Bullish silver investors who sold these puts undoubtedly found themselves in sudden loss situation and had to take the only corrective action they could take to protect themselves, namely, sell silver futures. This was not accidental, but a designed strategy by the dealers. The dealers, large and small, can buy on the way down because they are disciplined and collusive, and are keenly aware of how the markets work. The tech funds and leveraged speculators are not. The current sell-off will end when the last tech fund and speculator sells.
My sense is that we must be close to that point, especially with today’s option expiration. In fact, it feels like the dealers are almost wringing blood from a stone, trying to uncover and engineer the very last sell contract from the non-commercials and non-reporting traders on the COMEX. These dealers seem to be using every trick in the book, including using the overnight markets to their advantage. This engineering has taken on the aura of the last big clean out before the real move up.
It is always important to know, in a broad perspective, the general nature of what you are studying. The recent sell-offs in gold and silver have nothing to do with real fundamentals like supply and demand, and everything to do with dealers’ activities on the COMEX. The most appropriate term to describe this activity is manipulation, because the paper trade is dictating the world price of gold and silver. This is against the law, but that matters little if the regulators won’t enforce the law. The good news is that the market structure only improves on these sell-offs, while the bad news is that it necessarily involves interim pain.
Of course, knowing why and what the sell-off is about can’t tell you precisely how much may be left, so you must govern yourself accordingly. Are the metals a great buy here? Absolutely. Should you buy them on such an extremely leveraged basis that you could lose your position on lower prices? Absolutely not.
One last point. Today’s sell-off was particularly offensive in that there were no outside influences to explain it. It was all COMEX and option expiration related. This is like a mugging in broad daylight with the police just watching. Forgetting the police (the regulators), perhaps even worse is that anyone who follows the market should be aware of what happened. To remain quiet and say nothing and pretend no crime has taken place is morally offensive. If you are a letter writer or advisor, you should speak up. The free market is at risk.
http://news.silverseek.com/TedButler/1182880797.php
Gold showed bullish divergence in it's RSI this afternoon as price made a new low but RSI made a higher low on the hourly chart. 648 is our immediate target. We must ascend to and surpass this number in short order to deter further criminal activity against us.
If you sold your silver today in a panic...I hope you have the good sense to take your money and leave...never to return! Silver has significant repair to do compared to Gold. If you feel like you have been raped, you should...because you have. Silver has fallen all the way back to test it's January lows. Today's mega dump was unusual in that it came following a "downtrend" ...most often when Silver endures an episode like today's it is following an "uptrend". Perhaps as Ted Butler speculates above "this is the last big clean out". A move back to and through 12.65 is imperative. It is tempting to add to positions here, but prudence dictates waiting for a close back above 12.65 .
And if Oil's hokey Crude Invetory numbers don't show a rise tomorrow? Who cares! Oil will be at or near $80 a barrel by Labor Day.
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