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Just some dollar weakness. :)

Yes - but rather than this dismissing the increase in the price of oil, this dollar weakness is a key part of the evolving scenario that argues for far higher oil prices soon.

 

People are simply taking money out of dollars and putting it into other things. Some will go into gold (but not much until we have tanglible , double-digit inflation) but lots is going right now into oil (commodities) and stocks.

 

There has been much recent debate about why oil is sustaining USD 70 (its even been called a bubble) - but its just the issues above: i.e., the weight of cash looking for a home, especially one that hedges against the dollar. Then we have a recent big drop in oil inventories. Then you look at the oil chart which has fought against a concrete USD 73 ceiling for many months.

 

Today it bust through! ...not "Just some dollar weakness"

 

...IMHO

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Yes - but rather than this dismissing the increase in the price of oil, this dollar weakness is a key part of the evolving scenario that argues for far higher oil prices soon.

 

People are simply taking money out of dollars and putting it into other things. Some will go into gold (but not much until we have tanglible , double-digit inflation) but lots is going right now into oil (commodities) and stocks.

 

There has been much recent debate about why oil is sustaining USD 70 (its even been called a bubble) - but its just the above: the weight of cash looking for a home, especially one that hedges against the dollar. Then we have a recent big drop in oil inventories. Then you look at the il chart which has fought against a concrete USD 73 ceiling for many months.

 

Today it bust through! ...not "Just some dollar weakness"

 

...IMHO

Certainly will be interesting to see where the dollar goes. You would expect the dollar to strengthen when the markets look weak. Looks like everything including the dollar is weak.... hyper-deflation anyone?

 

The Yen has been strengthening which indicates a deflationary mode for me. I wonder if it would be more useful to price things in Yen.

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Certainly will be interesting to see where the dollar goes. You would expect the dollar to strengthen when the markets look weak. Looks like everything including the dollar is weak.... hyper-deflation anyone?

Yes - when the masses see the SHTF then they'll buy the dollar. As they did in the two phases of the credit crunch. ...safe haven ...yeh, yeh, yeh :huh:

 

But recently, and now, I'd guess its the smart investors and early movers acting as I suggested in my last post.

 

The Yen has been strengthening which indicates deflation for me. I wonder if it would be more useful to price things in Yen.

No view on this - I don't think about it enough to be confident. ...and have to reserve some time in my day for my day job :)

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Or as Buffett suggested when he made a well-timed song and dance about how greenbacks were about to pollute the world economy as surely as greenhouse warming. :rolleyes:

...but did Buffet predict oil at USD 80 in next few weeks?

 

That's my core argument. Not the dollar aspect.

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...but did Buffet predict oil at USD 80 in next few weeks?

 

That's my core argument. Not the dollar aspect.

Well, given the inflation scare it makes sense for money to stay out of the dollar so it has to choose between equities, oil and.... I see silver is going up!!! 14.28. It is spiking up against the Yen also so reflects a move of real money into silver.

 

As for oil, it looks likely to go through 80, but you have to wonder how long it can stay there with a weak economy, demand destruction and all that. Then if the US price stays high only because of a weak dollar etc the price is not really going to reflect a real gain.

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This jump in Gold and Oil must be due to the weak dollar.

 

It is not following my script today - support has been broken, down -0.42 today, just below 78.

 

I wish I could see volume better, to know how much is behind this move

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Why?

Don't you think the space between $900 and $1,000 is a little over-filled and too crowded already?

Gaps do seem to have a habit of being filled.

Hope you are right! - I think a push over 1000 is now well overdue. I think that needs a trigger action though, and events are being stagemanaged carefully over the last few months so as not to provide that trigger!

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In last weekend's KER James Turk said that gold reminded him of the Dow in the early 1980: flirting a long time with the 1,000-level, then finally getting over it and never looking back again. So, is this here the blueprint for gold (if you add 28-30 years on the time scale?). My opinion is: yes, maybe, but only if we don't get very severe inflation (which I can't see how it should be avoided), i.e. gold's ascent might be steeper and higher.

 

http://gold.approximity.com/since1968/

DJIA_LOG.png

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Gaps do seem to have a habit of being filled.

Hope you are right! - I think a push over 1000 is now well overdue. I think that needs a trigger action though, and events are being stagemanaged carefully over the last few months so as not to provide that trigger!

 

Seasonally, this the the RIGHT TIME for a move up in Gold,

 

But what's wrong is the commercial positions - ie too many commercial SHORTS.

 

Can they break the Commercials? There could be a good test coming, if today's move holds up

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Yes - when the masses see the SHTF then they'll buy the dollar. As they did in the two phases of the credit crunch. ...safe haven ...yeh, yeh, yeh :huh:

Maybe that will change as this crisis continues and the public see that more and more is being created (QE). Anyway I am unsure as to wether it was public buying of dollar as a safe haven, or companies having to buy to settle derivative contracts after the Lehmans collapse, which caused the dollar to gain so much strength afterwards.

 

How can something be seen as a safe haven when it stinks so much?

 

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In last weekend's KER James Turk said that gold reminded him of the Dow in the early 1980: flirting a long time with the 1,000-level, then finally getting over it and never looking back again. So, is this here the blueprint for gold (if you add 28-30 years on the time scale?). My opinion is: yes, maybe, but only if we don't get very severe inflation (which I can't see how it should be avoided), i.e. gold's ascent might be steeper and higher.

What's KER?

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In last weekend's KER James Turk said that gold reminded him of the Dow in the early 1980: flirting a long time with the 1,000-level, then finally getting over it and never looking back again. So, is this here the blueprint for gold (if you add 28-30 years on the time scale?). My opinion is: yes, maybe, but only if we don't get very severe inflation (which I can't see how it should be avoided), i.e. gold's ascent might be steeper and higher.

 

We cannot expect an exact match. Having said that, the comparison is very good so far

 

xxxk.png

 

If the pattern holds, we may see a rally to $1,000 or a bit higher,

and then one more large selloff before it takes off

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This jump in Gold and Oil must be due to the weak dollar.

 

It is not following my script today - support has been broken, down -0.42 today, just below 78.

 

I wish I could see volume better, to know how much is behind this move

I would be surprised if this buying is just down to dollar weakness, there was a big spike up yesterday and today, which to me says there is a big player doing a lot of buying. It will be interesting to see the comex volume.

 

This is what Ed Steer said about yesterday's action in his gold & silver daily, which I would recommend subscribing too.

 

The usual New York gold commentator had the following to report on yesterday's activity... "Whatever was happening in the foreign exchange markets, it is clear a large buyer entered the bullion market. Estimated Comex volume jumped 33,761 lots between 9 and 10 a.m... which turned out to be 40.4% of the day's entire estimated trade of 83,466 contracts. The p.m. fix, a physical event, came in at $943... $8.75 above the a.m. gold fix. Only an estimated 21,000 lots traded after 10 a.m... which is, after all, 75% of the day. Altogether, a very unusual trading pattern."

 

You may note that this new low for the U.S. dollar [in the last five trading days] did not help the gold price much. The dollar is now 40 basis points lower than it was at Friday's close when gold was in the $960 range. So, when someone says that gold and silver did this, because the dollar did that... I say B.S... because I know better. And so, dear reader [by now] should you.

 

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This jump in Gold and Oil must be due to the weak dollar.

It is not following my script today - support has been broken, down -0.42 today, just below 78.

I wish I could see volume better, to know how much is behind this move

 

Options expiry today. So I took a nap, to be back for later trading.

 

The market has held its gains pretty well, except the Dollar is now off its lows,

and Oil is giving back some gains. The close has potential to bring a bit of a selloff today

 

 

 

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Folks,

 

 

))))))) Back Up The Truck ((((((

 

GOLD - COMMODITY EXCHANGE INC.

Commitments of Traders - Futures Only, August 18, 2009

---------------------------------------------------------------------------

 

Commercial

Long : Short

81,498 : 286,043

 

Changes in Commitments from: August 11, 2009

1,643 : -16,717 :)

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