All times are U.S. Mountain Time
(Yesterday's Discussion.)
David Linkley (1/13/06; 20:42:06MT - usagold.com msg#: 140445)
Excuses
Although I thought it not possible for a US President to outdo the damage Bush has done, Bush himself is raising the bar. The inflamed dialog with Iran has begun and the major powers have chosen sides. The question is will this President yet again sanction an attack on a sovereign nation on false premises? The real crime of Iran is to plan on opening an oil bourse in March of this year trading oil in Euros. This President seems intent on dividing, indebting and isolating the US. Make no mistake a new era in the US and world is now decending upon us. War and scarcity are in the air and their is no escaping. I pray that many of you are out of debt and hold physical gold. If the US participates or sanctions an attack I believe chaos will follow.
Gold will tell us just how much of a challege we have ahead of us. Throw out the gold charts, we are living in a time akin to 1939-1940, good luck.
Clink! (1/13/06; 19:03:31MT - usagold.com msg#: 140444)
Moving measurement units
http://www.321gold.com/editorials/russell/russell011206.html
While having to admit that TA can be extremely useful, I have difficulty in taking seriously any estimates that are based on the $850 peak in '81. Even the illustrious Richard Russell is talking about the 50% retracement level between $850 and $250 (see link). Well, that might be fine if he's talking about a 2-year chart but, unfortunately, that figure of $850 is rather misleading, as it is a number of 1981 dollars which, as Sir Survivor kindly informed us earlier today, is maybe worth 2.3 times that or $1955 in today's money. (Of course, it is a little difficult to calculate in real terms as so many points of reference in any inflation index have shifted in the intervening period) So it just goes to show that we have a l-o-n-g way to go before approaching the froth of '81.
C!
PS. Of course, I know that you didn't use any of this tomfoolery to arrive at your prediction, MK. You probably just borrowed the wizard's crystal ball for an afternoon.
Sundeck (1/13/06; 18:56:42MT - usagold.com msg#: 140443)
Rooster crowing in the castle?
http://www.chinapage.com/newyear.html#animal
Is that a rooster I hear crowing in the castle?
Sounds like: Cock-a-760-dollar-doo! Or something like that...difficult to discern amongst the echos...perhaps the hens are all laying golden eggs...
Could this crowing cock be signalling a new golden dawn?
Is China going to feature highly in the next golden day?
Next Chinese calendar year (commencing 29Jan06) is the Year of the Dog (doesn't sound too good for the Dow)...2007 will be the Year of the Boar...and then the Year of the Rat...
Coincidentally, 2005 was the Year of the Rooster - signalling a golden dawn indeed!!
Sir MK, I hope next year that you are still crowing (and not eating your crow instead!!!).
Regards
:-)
Chris Powell (1/13/06; 18:37:37MT - usagold.com msg#: 140442)
Copper and other base metals are turning into currencies
http://metalsplace.com/metalsnews/?a=3575
Platts News via MetalsPlace.com
Thursday, January 12, 2006
Copper is no longer behaving as an industrial raw material but as a financial instrument, Bloomsbury Minerals Economics said in a report on the impact of commodity index funds on metal prices Thursday.
"We think that it is pointless continuing to analyse copper prices as if they were simply prices of an industrial raw material. For now, copper is behaving essentially as a financial instrument," said BME analyst Peter Hollands, adding that Commodity Index Fund buying was raising copper prices above the level that would otherwise be seen.
"Demand for metals futures is compounding the effect of market deficits and low physical stocks. Copper price behaviour has made a transition from being primarily that of an industrial raw material to that of a financial instrument," said Hollands.
He said, however, that the index fund demand for metals drives up prices, which attracts money to the index funds, which drives up prices: "It is a bubble."
"Life has become very dangerous indeed to the physical copper industry," he warned.
Hollands also noted the breakouts of actual price from modeled physical-market fair value that have emerged in aluminium and zinc during 2005 and in lead and nickel this month.
"Commodity Index Fund investments have had an equally dramatic effect on gold by converting it from a currency and real-interest-rate driven financial instrument to a Commodity Index Fund-driven financial instrument, causing gold prices to correlate positively with base metals prices," he noted.
Hollands said Commodity Index Fund investments were expected to rise from around $80 billion now to $105-115 billion by the end of 2006 and $140-150 billion by the end of 2007, provided that a major bear market in commodities has not begun by then.
"Some of the newer funds are more metals-intensive. If Index Fund investments do grow like that, then index fund buying could add the equivalent of 350,000-525,000 metric tons of demand for aluminium futures, 180,000-270,000 metric tons of demand for copper futures, 100,000-150,000 metric tons demand for zinc futures, 70,000-105,000 metric tons of demand for lead futures and 100,000-150,000 metric tons of demand for nickel futures, in both 2006 and 2007," he said.
Hollands noted that the impact on price may well be most extreme in metals where there are also deficits in the physical market and very low stocks.
"The end of a fundamentally-driven bull market in commodities will most likely bring the inflow of investment money to a halt but may not prompt a great deal of disinvestment. The pensions industry seems to have accepted a long-term role for commodities holdings for the purposes of diversification, inflation hedge, offsetting weak developed world currencies, and gaining exposure to emerging market growth," said Hollands.
Chris Powell (1/13/06; 18:36:39MT - usagold.com msg#: 140441)
Asian currency unit draws near, much to dismay of U.S.
http://english.chosun.com/w21data/html/news/200601/200601130018.html
Single Asian Currency Comes a Step Closer to Reality
The Chosun Ilbo, Seoul, South Korea
Friday, January 13, 2006
The Asian single currency, which so far exists only in the minds of economists and officials with international organizations, will take on more concrete reality soon.
The Asian Development Bank plans to publicize the Asian currency unit (ACU), a notional unit of exchange based on a "basket" or weighted average of currencies used in the 10 ASEAN member countries plus South Korea, China, and Japan, the Yomiuri Shimbun (Tokyo) and others reported Friday.
But that does not mean that any bills or coins will circulate any time soon. The ACU is only the first step toward the integration of Asian currencies, a "virtual currency" that takes into consideration gross domestic product and trade volume of each of the 13 nations and serves as a gauge for governments to implement foreign exchange policies. So far Japan and China have tried to make their own national currency into the Asian currency, but their jostling in effect canceled out the efforts of the other. That is why the ACU is gaining support on the road to a single currency.
Given that it took more than 30 years for Europe to launch its single currency, the euro, Asians also probably have a long road ahead until the ACU or its successor chinks in their pockets. However, it could take less time than in Europe, since internal trade volume in the region is increasing faster than external trade volume with the U.S. or Europe, according to Yun Deok-ryong, a researcher with the Korea Institute for International Economic Policy.
Still, many obstacles lie ahead. The U.S. above all is likely to worry that it will lose its influence over Asian economies and use the International Monetary Fund to block the introduction of the ACU.
The launch of the Asian Monetary Fund, which is to coordinate monetary policies in the region, faces objections from the U.S., which does not want to see an Asian single currency emerge as another key currency along with the dollar and euro in the global financial market, an official with the Ministry of Finance and Economy said.
Chris Powell (1/13/06; 18:35:08MT - usagold.com msg#: 140440)
South Korea spends $1 billion to suppress its own currency
http://english.chosun.com/w21data/html/news/200601/200601130023.html
The Chosun Ilbo, Seoul, South Korea
Friday, January 13, 2006
Government intervention in the currency market boosted the value of the U.S. dollar on Friday, when the greenback surged 13.80 won to 987.80 won. The exchange rate opened up W2.00 at W976.00 on an increase in the yen-dollar rate and continued to rise rapidly as government intervention fostered buying movement. Insiders say the currency authorities were at their most active so far this year by
buying $1 billion.
Meanwhile, Finance Minister Han Duk-soo defined the current
appreciation of won as abnormal. "The won-dollar rate is falling too much. I shared this opinion with Bank of Korea Governor Park Seung during a phone conversation today," he said at a forum on advancing Korea in Seoul.
MK (1/13/06; 17:58:52MT - usagold.com msg#: 140439)
*******760.00****** theBullionDesk's Ross Norman gets it right, agrees with MK; Sinclair, Gandalf probably close but no cigar
"Gold is forecast to average $618 a troy ounce in 2006 - with a high of $760 an ounce, and a low of $520.75 - according to UK-based consultancy TheBullionDesk.com." [Ross Norman]
"Looking at the charts the big numbers like $550 and $600 are really only psychological numbers - from the charts perspective, and they're important, there isn't very much between here and $800 actually, and that's the high we saw back in 1980. You tend to find a little bit of resistance at the big numbers, because people that want to sell choose the big numbers to leave those orders on - so they only provide a bit of a hurdle. But from a technical perspective there isn't too much resistance from here, and northwards all the way up to $800."
________
MK: These guys predicting $750 (ahem) and $755 (ahem) are missing something in the analysis. Ross Norman has it right at $760 (ahem). And I'm not saying that just because he agrees with me. We web site proprietors have to stick together. When we get to 2007, we can clink the champaigne glasses or cry in our beer. Both joy and misery love company. So welcome to $760, Mr. Norman. 'Tis a good number.
________________
Meanwhile back at the castle. . .
Gandalf, is this is a violation of contest rules? This Ross Norman thing.
Oh, we are not having a contest, you say?
But I thought we were.
What's that? We are but we aren't? A trip to the Treasury is not going to be required? By the saints, methinks you've hit on something, my wizardrous friend. Contests without prizes! This is one of your greatest innovations. You are truly a Great Wizard.
Oh, you think it only temporary, and an aberration. . . . By all that's holy, Wizard, I take exception to your use of the word "cheap." I'm not, I say. Thrifty would be the more elegant description.
Back to Ross Norman. What about outside guesses? Are they now acceptable?
You're thinking about that? Very good. We need an answer. What's more, as you always say, we need rules.
What's that? Speaking about rules, you're not sure if I can enter the contests?
True, it's never been done before. Ahem. . . .It IS difficult to award oneself a prize. This is truly a conundrum. . .
No, Wizard, I do not believe that the word "conundrum" is over-used. Sir Alan would never overuse a word. Remember the one about irrational exuberance. . . Whoa, what a furor over two words. . . .
(Voices fade down corridor, metal door clangs, echoes. It's time to sup and and greet a good weekend after a very good week)
Sundeck (1/13/06; 17:27:52MT - usagold.com msg#: 140438)
Danger time for America
http://www.economist.com/opinion/displaystory.cfm?story_id=5385434
...cover story on The Economist.
Greenspan passing the (explosive) baton.
Meanwhile, "The World"...where to from here?
Median housing prices in much of Australia have fallen about 10% over the last year. Suspect similar slump in UK and elsewhere. Equity draw-downs must be becoming less of an option for many...although perhaps the baby-boomers still have a lot of equity tied up in their houses??? Will they call upon it for the "good-life" in retirement and leave their kids nought? Or will they need it just to survive in place of pensions that are too lean for the task, leading to banks ending up owning most of the housing in "deceased baby-boomer estates"?
Damn it Janet...what we need is another good bubble somewhere!
Don't go to sleep and miss the Bernanke Chapter just over the page...
:-)
USAGOLD Daily Market Report (1/13/06; 17:11:48MT - usagold.com msg#: 140437)
Page Update!
http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has been updated.
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FRIDAY Market Excerpts
January 13 (from Reuters) -- Gold futures in New York reached a new 25-year high on Friday, as a weaker dollar and frenetic speculative buying before a holiday weekend rekindled a rally in precious metals, dealers said.
COMEX February gold futures jumped $7.7 to $557 after trading from $545.20 to $558.80.
Gold blasted higher as investors who are bullish on the market for 2006 increased their stakes before a long weekend. New York metals are closed on Monday for the Martin Luther King holiday.
With the strength of the buying, futures managed to break past initial chart resistance at $550.50 and surpass Tuesday's quarter-century peak, at $553.10.
"The funds are coming back to buy it to new highs on a weak dollar and strong euro," said James Quinn, a market commentator at AG Edwards & Sons, at the floor of the COMEX.
Money managers and investors have increased exposure to gold and commodities as they diversify away from currencies, equities and bonds in hopes of boosting returns. Concerns about the economy, geopolitics and a weaker dollar in 2006 also have attracted investors to the precious metal.
The dollar slipped Friday as traders questioned how much further the Federal Reserve will raise interest rates, after U.S. retail sales data came in weaker than expected and producer prices were higher than forecast.
Separately, Deutsche Bank raised its gold price forecast by 16 percent to $570 an ounce for 2006 and by 26 percent to $660 for 2007.
---(see url for full news, 24-hr newswire, market quotes)---
Belgian (1/13/06; 15:32:40MT - usagold.com msg#: 140436)
@Flatliner
If (!!!) the UST is already shipping/delivering goldmetal from its reserves...it will NOT go through LBMA, but directly to the privileged receivers. At LBMA, it are the gold-contract players who manage gold's price.
If one "has" to deliver goldmetal, one better delivers at the highest price possible. In sharp contrast with the strategic redistribution of euro-gold as attractive as possible, at the lowest "official" price...to be revalued at the appropiate time.
Survivor (1/13/06; 15:31:51MT - usagold.com msg#: 140435)
The Answer: When to Sell Gold?
@Specie-man #140427
My humble compliments to you good sir. That is exactly the answer I have been trying to put into words for some days now. Brief, to the point, and spot on!
Cheers
- Survivor
Belgian (1/13/06; 15:26:09MT - usagold.com msg#: 140434)
USTreasury gold
From the original 28,000 tonnes of UST gold, 20,000 tonnes moved to Europ pre 1971. If the dollar ($-IMS) is already buying time with shipping goldmetal (from the 8,000 tonnes left over) to those who still support the $-reserve status and invoice oil in dollars...it is only a mater of time before the $-IMS must transition into another monetary system. No gold-reserves in the vaults means nothing to Mark To the Market as all the wealth reserves have gone.
This might explain why the goldprice rises without affecting the USDX !?
Survivor (1/13/06; 15:22:52MT - usagold.com msg#: 140433)
Further to Gold Price Moves (Sundeck)
In 2006 dollars, those 1979 -1980 moves would need to look like this for an apples<>apples comparison:
$10 move in 1980 = $23 move in 2006 dollars
$60 move in 1980 = $138 move in 2006 dollars
Only a matter of time until those are the kind of numbers we will witness.
- Survivor
Flatliner (1/13/06; 15:16:06MT - usagold.com msg#: 140432)
@LBMA figures for december '05
Belgian, what are "LBMA figures for december '05"? Also, thinking back to Another's comments that because no CB sold into the paper market, the price remains low. I'm just guessing here, but if the US Treasury offered gold for sale in the paper markets, the price would explode! Every "Big Trader" would call in some gold. ... But, I may be completely missing the intent of your posting. I will look for clarification.
osa104c (1/13/06; 15:12:47MT - usagold.com msg#: 140431)
after burners ignite with OWN o2
dollar game? No, real fear developes when ALL parties panic.. US$ at 85.40....get out your leaf blowers...trash OUT!!
TownCrier (1/13/06; 15:11:00MT - usagold.com msg#: 140430)
Put on your thinking caps
The following note came in today by e-mail:
_________________
"My son is working on a project... hoping you can help... the topic he wants to discuss is
'What would happen if all the gold in the U.S. was destroyed?'
Without getting into the 'how', he would like to study the effects of the loss of all the gold in the Federal Depository."
_________________
I figured, why not share the fun of this challenging scenario?
I'm sure many of you recall the specific motivations behind Goldfinger's desire to destroy the U.S. gold supply in the 1964 James Bond film, but you'll want to further take into account that we were on an international gold standard in 1964 (by which the dollar had a fixed redemption rate against gold) whereas that is no longer the case today. (Basically, Nixon did administratively on August 15, 1971 that which Goldfinger failed to accomplish in 1964).
With that, I'll turn it over to you all to help give this young man some talking points.
R.
Belgian (1/13/06; 15:04:06MT - usagold.com msg#: 140429)
LBMA figures for december '05
Rather high !? Theory : Are the gold paperpricers pushing the goldprice up in anticipation of metal delivery from USTreasury as to keep the dollar ball in the game (oil invoicing + reserve status) ??? Thoughts anyone.
White Rose (1/13/06; 14:45:20MT - usagold.com msg#: 140428)
The real question for today
According to Sinclair, gold has shot past the level needed to trigger some sort of derivative event. If all goes according to the predictions (as I understand them), various members of the gold cartel now will be jumping ship, making a fast move up in price.
Does anyone believe this? Or am I just an obnoxious kid saying "are we there yet?" over and over on a very long car ride?
specie-man (1/13/06; 14:08:22MT - usagold.com msg#: 140427)
When do you sell your gold ?
Those who have been wise enough to put some or all of their savings into gold during the last six years have obviously done well. As such, the question above, could be phrased differently:
"When do you sell your savings ?"
The simple answer to both questions is:
You don't ever "sell" your gold - you "spend" it (when the need arises).
Sundeck (1/13/06; 14:02:51MT - usagold.com msg#: 140426)
Gold price moves
Nice price step...around $10 in spot...
Looking at the historical gold charts for 1979 and 1980 (for example, at the K-castle)...there were a couple of $60-70 daily increases in Jan 1980 during the late blow-off phase of the gold price. Before that, quite a few in the $20-30 per day range. So a $10 daily move is "quite respectable".
Of course, it is probable that "we ain't seen nothin' yet"; considering the substantial devaluation of the dollar in the last 25 years, the state of the national finances and the parlous prospects for the dollar going forward.
...the Moon is still a long way off and Dorothy (don't you mean Dorothy, Sir Gandalf?...#140422) and Toto are only just leaving Kansas...on their way to rendezvousing with To-the-Moon Alice...
;-)
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