Market Watch on Gold
RichR
Posts: 3,864 ✭✭✭✭✭
Note the $2000/ounce comment...
METALS STOCKS
Gold futures climb another $30 as crisis continues
By Steve Goldstein & Moming Zhou, Market Watch
Last update: 9:09 a.m. EDT Sept. 18, 2008Comments: 46NEW YORK (Market Watch) -- The rally in gold extended into Thursday as turmoil in the financial markets led the Federal Reserve and five other central banks to take further efforts to get global money markets moving again.
After a $70 rally on Wednesday, gold futures rose a further $28, or 3.3%, to $878.50 an ounce in early morning trading on the Comex division of the New York Mercantile Exchange.
"We have been surprised that gold has been so heretofore quiet, and have expected a much stronger and more immediate response to the government takeover of GSE/mortgage and insurance entities, and broker-dealer bankruptcies," said Citigroup analyst John Hill.
"It is notable that the hard-core goldbugs have been proven correct in the decade-long contention that an overwhelmingly vast and complex pool of nested financial derivatives would ultimately result in cascading defaults and ruin for major portions of the banking system," he wrote in a note to clients.
"Frankly, we're surprised that gold is not already at $2,000 per ounce."
The banking tension was given new weight on Thursday as the Fed authorized a $180 billion expansion of its swap lines with other world central banks. The funds, which will be provided by the U.S. central bank, can be injected into money markets through overnight and term loans.
The decision comes a day after measures of short-term borrowing costs made huge jumps as banks grew increasingly wary of lending to each other in the wake of the failure of investment bank Lehman Brothers and jitters about the entire financial sector.
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Those poor babies. If they'd stop ALL short sales, maybe we'd have a level playing field.
So much for having "confidence in the marketplace", eh?
I knew it would happen.
This was the quote that got my attention...considering CBS Market Watch is very widely dstributed:
"It is notable that the hard-core goldbugs have been proven correct in the decade-long contention that an overwhelmingly vast and complex pool of nested financial derivatives would ultimately result in cascading defaults and ruin for major portions of the banking system," he wrote in a note to clients.
"Frankly, we're surprised that gold is not already at $2,000 per ounce."
I knew it would happen.