Dispassion

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Spot Gold up $20 in as many minutes on IGINDEX

This reflects the movement in the Euro/Dollar index.

If the pog moves back to where it was when the Euro/Dollar last traded as this price then we'll see it knocking $890.

More importantly this movement adds weight to the theory that the Dollar has peaked against the Euro.

Looking at yesterday's data, the sell off in gold correlates with a broad sell of in commodties.

But most importantly, it is highly correlated with the the Euro/Dollar, indicating that it is still, to some extent coupled, although since mid September the coupling has weakened significantly.

Dan Norcini on the panic to buy gold and sell 'gold'

http://www.jsmineset.com/cwsimages/Miscfil...ld1230pmCDT.pdf

http://www.bloomberg.com/apps/news?pid=ema...id=aQFP3_y4srbU

Gold Futures Drop on Bets Global Slump to Cut Commodity Demand

By Pham-Duy Nguyen

Oct. 9 (Bloomberg) -- Gold fell for the first time this week on speculation that a global economic slump will reduce demand for commodities. Silver gained.

Morgan Stanley cut its forecast for gold prices by 5 percent, estimating that the metal will average $900 an ounce this year and $950 in 2009. Before today, gold gained 8.8 percent this week as investors sought a haven from plummeting equities.

``A lot of the speculative money is off to the sidelines,'' said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. ``Gold is a victim of deleveraging. Eventually, it will do better than other commodities because it will hold its value.''

Gold futures for December delivery fell $20, or 2.2 percent, to $886.50 an ounce on the Comex division of the New York Mercantile Exchange. The price rose to a record $1,033.90 on March 17.

The Reuters/Jefferies CRB Index of 19 raw materials has dropped 34 percent from a record in July as energy, agricultural and industrial-metal prices slid. The gauge was little changed today.

Gold's decline may be a sign of some stability in financial markets after the Federal Reserve, the European Central Bank and four other central banks yesterday reduced borrowing costs in a coordinated effort to ease the credit crunch.

`Vote of Confidence'

``We think this is a vote of confidence in the global banking, trading, economic system,'' said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter.

Gold-lease rates fell for the second straight day, after gaining every day since Sept. 18 as credit conditions tightened. The one-month Libor gold forward offered rate fell to 2.4 percent today, after touching 2.7 percent on Oct. 10, the highest since 2001.

Still, gold may rebound on demand for a haven should more banks fail and the credit market remain frozen. Stocks in Europe and the U.S. fell today, and the cost of borrowing in dollars for three months in London rose to the highest level this year.

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, reached a record 763.9 metric tons yesterday.

Silver, which has wider industrial applications than gold, gained as copper and other base metals rallied. Silver fell 16 percent last week when gold declined 6.2 percent.

``Silver got significantly oversold so you have some value hunters who think silver is comparatively cheap to gold now,'' said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago.

Silver futures for December delivery gained 10.3 cents, or 0.9 percent, to $11.875 an ounce. The price has dropped 20 percent this year.

I feel like I've followed the white rabbit down the hole. Can anyone give me back some semblance of a grasp on 'reality' and tell me why we're having such a massive spike downwards in PMs? The only explanation I can summon up is massive manipulation.

There's only one explanation, a lot of gold has just been sold, paper or physical.

It's either been traded down on technical or fundamental reasons or a single or group of sellers sold a lot of gold quickly, or a combination of the two.

I've been trying to work out who's selling gold for a while, because by all reports, it's very difficult to buy physical gold at the moment.

It's hard to find any information other than speculation, though.

This seems a silly thing to say to me, when the physical market in the East is five times a big as the Western investment market.

I was just wondering about this exact thing.

Does anyone know where to get data on what the ratio is of paper gold to physical gold on the market.

FOOK!

new all time high in GBP..

GBP531.23.

 

GM are going bust, I think

Looks like we're about to tear through the resistance at 920.6

There's got to be big news behind this.

Anyone watching the action in the gold price?

A nice parabola has formed.

The wedge begining on Monday expires very shortly, I'd say 75% bullish.

you think we are on the next leg up to a higher level?

There are two well formed rising support lines from 750 and 825 and the news is bullish.

It's hard to argue a case against this at the moment.

I echo Goldfinger and Narcos comments.

yes, it looks positive, i will be looking for a position between 845 and 860 area tomorrow, they should take down today's highs.

We're at the top of your 'channel 2' now Ker, your model's worked very well so far are you expecting that this resistance will be strong?

Looks like Ker channel 2 will hold and mini channel 7 has been broken.

Seriously, if this guy is right, this is the biggest news !!!!

 

You really will want to listen to this.

 

I'm not going to spoil the surprise. Listen, and then tell me it's not a little surprising !

 

 

Monday, 10.06.08

From the Toronto Resource Investment Conference, Dr. Jim Willie talks to Al Korelin.

http://www.kereport.com/DailyRadio/Daily100608-2.mp3

 

 

Did he REALLY say......... :blink:

This would be contrary to the recent statement from China, asking Asia not to sell the dollar.

Now testing the resistance of mini channel 7`.

To me, it looks like the "Ker model" is still not conclusive.

Now testing the resistance of mini channel 10.

Now testing the resistance of mini channel 7`.

here are some guidelines for monday, remember, this is not a secure outlook, it is just an idea and it maybe wrong, always use stops:

Now testing the resistance of mini channel 10.

lease rate action...

This still confuses me. I don't understand who is borrowing gold or who is selling it at the moment it certainly doesn't seem to be the private investor.

I've listened to the FS team discuss gold stocks until my ears bleed, but although I see the geared attraction of stocks, especially the right juniors (whatever that means!), my concern is that with gold getting more and more expensive to mine (energy costs, local politics, mining regulations, the easy stuff -- like with oil -- largely mined out, etc.) the people actually doing the work could get squeezed between those costs & complexities and the reluctance of purchasers to pay more for their shiny stuff.

 

Obviously if China suddenly decides to turn their reserves into gold, all bets are off and shares ought to soar with the price of gold. But as a long term bet I worry that imminent peak oil factors with have a highly geared effect on energy-intensive operations like mining. Especially mining for PMs where you have to pan a lot of dirt to find a speck of gold.

 

Of course if oil continues its miraculous fall towards $50 (where's Zapata George and his predictions now? :-) maybe miners will have an easier time of it. But I can't help feeling that the current dip in energy cost is very temporary. Recession or depression, people all over the planet still need their plastic & petrol, and geology is taking its time topping up reserves.

 

Andrew McP

The neutral energy to product ratio for miners is one that rises with rising product price. The sell off in the HUI has actually coincided with a fall in the oil to gold ratio, so I don't consider energy costs to have been a significant factor here.

see: http://stockcharts.com $WTIC:$GOLD and $HUI:$GOLD

alright, sorry to keep banging on about this but here is a perfect example of what I mean. From Doug Casey's subscriber letter:

 

 

 

Always the wrong reasons. Always time to buy on dips. Always an opportunity for great profits (unless you bought in two years ago in which case you'd be looking at 80+% losses).

Really don't worry about banging on about it, I for one, would like to see more balance on this forum. I'd hate it to be a cheerleading forum.

For me, the primary reason behind the underperformance of gold stocks, has got to be based upon predictions on the longevity of the gold bull. Juniors are underperforming majors which are underperfoming the metal. This would indicate investors are expecting the bull to be short from here. If the outlook changes and the gold bull is confirmed to be strong then I expect to see some very big moves in gold stocks.

If anyone has any insight into this then I'm keen to read it too.

right now it is a good oportunity to take a position, we holded at 820 (still need another retest within the next 10 minutes, but i think it will hold) , however it is still risky to get a position because we have no volume. This is like buying oil at 90.50 about 2 weeks ago, next week we should go higher, because euro needs to retest the higher band if its downtrend channel. no charts, yet, sorry

Your last two calls have been excellent, Ker, I hope you traded them.

http://goldprice.org/silver-and-gold-prices/

Y'all may not be aware of it, but according to The Moneychanger Bank Liquidity Analysis, when the liabilities of the entire banking system are compared to the reserves of the entire banking system, the banks have about 69 cents for every $100 they owe in deposits. Admittedly, that's out of date a bit, because when the Fed discontinued publishing M3 figures, I couldn't figure it any longer. Shoot, by now they probably have 71, maybe even 73 cents.

And the Nice Government Men are worried about bank runs, you bet your life. That's why they raised the FDIC insurance deposit limit from $100,000 per account to $250,000 per account. Little known fact: banks have no cash. Literally. Haven't kept it for years. Greed decrees they keep no reserves, but put everything "to work," so why miss interest by keeping cash lying around in the vault. Illiquidity, thy name is bank! Now rumours of a banking holiday abound, when the government closes down the banks for a week or so to cool off the depositors' frantic desires to see their money again, foolish hoi polloi that they are.

Now, look here: The U.S. dollar index rose 74.6 basis points today, and early in the day was up over 81. Sure, sure, that's logical to me: entire U.S. and world financial system leans over the brink of meltdown, U.S. Congress is deadlocked over whether it will consent to bailing out the banks, nobody is in charge, derivatives collapse threatens worldwide financial holocaust, Fed & Treasury are intent on pushing thru more bailouts that will suck value out of a dollar like an otter sucks clams out of their shell AND the U.S. dollar rises. Sure, sure, sure.

And of course, silver and gold prices fall. The gold price dropped a colossal US$41.70 to US$839 while the silver price flushed 165.5 cents to $11.065. Sure, sure, that always happens when the world threatens a financial tsunami, everybody runs to sell gold. Right. The gold price has been driven back under its 200 day moving average. Ditto the silver price. Right.

Meanwhile stocks, are represented by the Dow Jones Industrial average, sank by 348.22 to 10, 482.85 or 3.2%.

What's the sum of these counter-intuitive moves? Why, my dear, somebody is "painting the tape" to make things look better than they really are. Now who would do such a thing? What to do? In case it hasn't been beaten into your skull yet, the Fed and the U.S. Treasury will inflate their way out of this crisis, even if they have to push money out of, well, helicopters as Ben Bernanke suggested in 2002.

When they do, silver and gold prices will soar. Right now (sorry for sounding conspiratorial, but it's not paranoid when there really is one) they must keep the lid on metals and pump the dollar. All without any will, they are offering you an escape route: buy all the silver & gold you can buy.

To give you an idea of what the real prices are, as opposed to the paper prices, if you wanted to buy the cheapest gold coins today, you would have paid US$878.76 an ounce (for Mexican 50 pesos) and for silver you would have had to pay $13.38 (for one ounce rounds). Of course, that's in the real world, not the government-run world.

What institutions would that be please?

I've been trying to work out who's selling gold at the moment too, but I've not found anything yet, so if anyone finds anything please post up.

Dan Norcini on paper gold sales, shortage of physical and how much attention to pay to TA.

http://www.jsmineset.com/cwsimages/Miscfil...ld1230pmCDT.pdf