NOVEMBER Gold and Silver Stocks/Options/Futures trading thread***

ProofCollection

New month, new thread.

Support for Mon night/Tues is at 1047.2, 1055.9, with resistance at 1068.4, 1077.1, and 1098.3.

agentjim007

I like gold.

Justacommeman

It is shiney

PreTurb

Resistance is futile

Wolf359

Whoa nellie...a new record.

ProofCollection

Sweet, this morning gold is charging higher. New ATH at 1077.3 but I think it will actually go a few dollars higher. Resistance is at 1080.8. Next resistance level is basically 1100, but I don't think we'll get there today.

Edited to change: New high: 1081.7 Gold comex GC December contract.

Unloaded about 40% of my position here, hoping to buy back in on a pullback.

roadrunner

I was fiddling with some junior stocks for a few mintues and did a quick quote on IAG and didn't believe what I was seeing. Figured the system must have been quoting me in Candadian dollars. It was a dollar higher than 15 min earlier. I did it again and same number....figured gold must have just let loose. With the higher levels did some quick maneuvering on the account to take advantage of the upswing. Should have loaded up the boat yesterday on the intermediates and large juniors - IAG, GSS, etc.

So much for 200 tons of IMF gold being "bearish" for the market. Formal Central Bank sales in the 1970's helped to boost the price upward, probably just the opposite of what those guys thought would happen. No different today.

Even with gold at $1080 the miners are still at levels that correspond to much lower gold levels of weeks ago. So whatever changes are in the mix for gold/dollar/stocks still seems to be on course. The dollar really didn't go down all that much to drive this gold move.....disconnect in the making?

Still looking for Sinclair's next mini-angel at $1089. His lower angel of $1024 proved to be the support area for this current move. This current wave up should complete the 5 wave up series that started back at $931. And what was ironic with today's chart was that the move back into the $1060's took gold right back into the symmetrical triangle it had been cycling in for months. Only this time it did break up out of the triangle. The move down to $1026 and back up was as if it never happened in the bigger picture.

roadrunner

cohodk

So much for 200 tons of IMF gold being "bearish" for the market

The "proposed" sale was an overhang. Now that it is over, market has less fear of a big seller coming to market.

gsa1fan

Dollar not dropping gold rising ~ WHY?

Thanks~RR!

roadrunner

The "proposed" sale was an overhang. Now that it is over, market has less fear of a big seller coming to market

Central Banks supposedly have 29,000 tons of barbarous gold overhanging the market. I don't believe there has been any real fear of additional amounts of that being sold for a couple of years now. The IMF had been trotting out their 403 tonnes for so long that it became a joke. What would be the real joke if the IMF had leased the gold to India long ago and are just now settling up. If the Chinese don't get the other 200 tonnes, they will probably kick themselves for hoping for a much lower price. What if China was indeed the actual buyer and set up India as the front man?

The new owner has just made several hundred million dollars on their investment. Not bad for a few weeks work.

Gold has had periods when it runs with the dollar for weeks/months even though inversely is the normal mode. Last fall was a good example. There were also some periods in the 2002-2008 run up where it did it as well.

roadrunner

percyb

<< <i>So much for 200 tons of IMF gold being "bearish" for the market

The "proposed" sale was an overhang. Now that it is over, market has less fear of a big seller coming to market. >>



200 down, 200 to go. If I had $6.5 billion in the safe, I'd buy the balance.

Wolf359

Peter Schiff has an interesting take on this - he sees central banks beginning to bid in competition for gold. Says the dollar will have a delayed reaction to the gold price rise. Watch. Link is good until he records another.

Justacommeman

<<So whatever changes are in the mix for gold/dollar/stocks still seems to be on course. The dollar really didn't go down all that much to drive this gold move.....disconnect in the making? >>

Yes. Very intriguing if only for a day?

MJ

roadrunner

Sinclair's $1089 angel was hit dead smack on. How about that? And it came up from his lower $1024 angel.....2 for 2. So now what considering that 5 legs up from $931 is nearly complete? A brief correction back to $1072 or so, then a final move up should about do it. But is TA duty bound to correct gold back the $931-$1089+ up move and take it at least back to the $1023-$1033 zone once again? If gold moves to $1100 or higher then a retest to $1043 or $1052 would be well-traveled areas. Seems like a long time since the miners moved against the stock market or didn't need a big SM day to make a big move.

Fwiw the YuYangers have been firing on all cylinders the past few weeks. First they called the up move in early October though they felt it wasn't going to last as long as it did. Then they hit the bottom to the day on 10/28 and then the recovery on 11/2. Their chart calls for an upmove through mid- next week but with lots of volatility. The period from Friday-Monday might be volatile for all markets. But still no massive CIT fallout. You can see the YY charts at yuyanggold.com (when prompted to download Chinese text just reply no). I thought those guys had to be a joke predicting gold peaks and valleys out 3-6 months out by the day...until they consistently hit them all this year. Mind you they don't give gold prices, but a momentum wave chart. The first half of October was probably their worst month when they failed to see the all time high coming past 10/6/09...and not many analysts did. They called for an Oct 6th peak - it actually lasted a week longer.

GSR did finally pull back to 65 which for the moment was frightening. But it now looks like a 5-3-5 wave of leg 4 is complete with the slingshot down to 61 today. It was a well formed wave pattern that was gruelingly long with many missed signals. As long as this continues down the dollar will have very strong head winds. Of course just because it looks good and fits good doesn't mean squat in the end. For the past few weeks the GSR has driven me nuts. Those 5 wave patterns can look impulsive and shift one back to the other side. And this wave set had a pair of those 5 leg moves. Something to commit to memory for the next time.

roadrunner

Justacommeman

Yes, the hitting of both Angels to the dollar was pretty eerie..............Did you see that Dan Norcini has now been picked up by The Wall Street Journal?---commodities page

MJ

ProofCollection

Sweet day for gold, and nice recovery for silver as well. Kind of wishing I hadn't sold half of my position today, but I got out mostly between 1080 and 1085 so I'm still good. I think I'll get a chance to re-establish those positions at 1075-1080.

The explanation given was the sale of 200 tons of gold to India, but that news hit the night before and the move didn't start until this morning. Some consipracists are guessing that there is a big announcement coming out of Washington or Wall Street soon. Either way, the move was not attached to a move in the dollar, so this is a STRONG move.

Today was the first big day in a new multi-day move, so I'm not sure pullbacks are going to be that significant, at least through Mon-Wed of next week. I'm with RR on an upside target between 1125 and 1140. It's definitely a good idea to take profits at 1125.

Today was a big day, so I'm not expecting much for Wed. I'm guessing Wed, Thurs, and Fri will be $10 grinders.

Support is at 1064.2, 1076.3 and resistance is at 1097.1 and 1109.

cohodk

Will we see a "star in the evening" tomorrow?

roadrunner

My call early in the week was to top off at the $1089 angel. Since we've done $1099 that's even better. Yeah, there could be a final inching up to $1110 or so but I didn't call for anything higher at this point. I'm with the YYangers and feel that Asia tonight might be as high as it goes (or went). The gold stocks are already fizzling again though I tip my hat to IAG that flew nearly to it's yearly high on a good earnings report. It had a 23% move from the bottom of late last week. Some miners like Kinross didn't even get off the pad because of bad reports. For now I'm out of gold stocks and even lightened up on my generic gold this week waiting for a pullback by later in November. Cohodk hinted at DZZ.....I might try that. Silver needs to bust out of the upper $17's to give the GSR more life and reignite the reflation trade. That seems to be a lower probability right now.

roadrunner

jmski52

Waiting for Van Eck and the right timing. Hey, it's only money.

RedTiger

I wish I had more time for trading and more guts. Ah well, if wishes were winning trades...

When the breakout began at $950, I called for $1150 spot in December. Looks like that train is right on schedule. Unfortunately, I only have one tiny trading position at the moment, and little time for trading. Ah well, if $1150 comes in by December, I'm sure the forumites will give me a "cookie," for a good call.

ProofCollection

<< <i>Will we see a "star in the evening" tomorrow? >>



Trying to be cute again I see. Why don't you put a little more thought and explanation into your posts so we can all understand what you're looking at? There is no evening star possibility on the gold future charts which trade around the clock, only on GLD. I don't think using GLD charts is valid because it only represents a fraction of the active trading time the underlying commodity is trading. Guess we'll see.

IMO, gold is still in the middle of a very high powered move with a lot of energy. The pullbacks have been shallow, and the buying fierce. Volume has been high. This horse isn't done. I'm sticking with Tues next week being the high, and I'm still sticking with $1125+ although it could "disappoint" and get stuck at 1110. Tonight, we're only at a small $10 pullback from the intraday high, a new ATH.

Support is at 1082.1, 1090.4, with resistance at 1100.3 and 1108.6.

I think we'll see 1105-1110 on Thursday.

cohodk

I believe if people are really interested then they will do the research themselves. Thats just how I am. But since you asked, I will surely explain.

Cant use GLD charts, eh?

I see 3 evening stars here, with the possibility of #4 yesterday. Each one resulted in a 15-25% drop within 2 months. Now maybe we get lucky and gold makes a higher close today, but to ignore the possibility of a reversal, IMO, is dangerous.

ProofCollection

I won't ignore it, but it looks like the evening star scenario didn't happen. I'm not an expert here, so if that's wrong, some say something.

Today was a nice consolidation day for gold. Like the previous consolidations on the big move up, the range was tight.

The pattern is now charged up with more short term energy, and gold is ready to go any minute now. Although nothing may happen until Monday, I think we'll see movement Friday up to 1110 or so.

A couple of things are lined up real nice... The USD is definitely falling again in its channel, and will at least hit 75.0 some time in the next week or so. This will help gold up to 1110. 75 is an important support level for the USD, so hard to say what will happen once we get there.

Another thing is the stock market. The SP500 rally looks to be back on track (at the expense of the dollar). It's at an important support level, 1060 at the moment.

IMO, things look to be shaping up for gold and stocks to continue up, and the dollar to continue down for a few more days before a reversal. This bodes well to the prediction or a turn point on Tues.



I played the conolidation moves back and forth a few times today and eeked out a few gains. I'm back in with a 100% position for the next move up. I think there's a good chance we'll see gold at $1125 by Tues or Wed, but I'll start reducing positions at $1110.

roadrunner

Interesting to see hit $1101 while the Dollar and Gold to Silver ratio were powering hard in the same direction....all 3 strongly up at the same time. Gold initially rallyed to $1099 on the poor unemployment and jobs report data, then got whipsawed back into the upper $1080's, then crept right back over the next hour. Gold stocks jumped with Newmont up 4% already. But I still note some big volume drops over the last couple of days. But some of the miners are catching up quick. The miners still seem like they don't necessarily want to believe in $1100 gold. Well, all except IAM Gold. IAM reached a yearly high today almost touching $17 on a long evening star from Wednesday's $15.75 level. Wow, that recovered from a low of around $12.60 last week! But it's the only major miner I see that is acting super bullish to go hand in hand with the gold price. They did have a great earnings report too. All the miners have gold in the ground, but are performing all over the map as far as getting it out economically. PC you were right about not selling out early. One would think that miners would be making money hand over fist with the gold price over $1000 last quarter. But a number of the majors and intermediates have come in with marginal or lousy earning reports giving the entire sector sort of a black eye. If it's not losing hedges, then it's production problems, labor disputes/strikes, or losing derivatives and currency bets. No doubt they'll sort it all out eventually. Gold stocks are still underpriced to gold by 20-30% based on the 8 year trends. It only goes to show that even mining "money" is no sure thing in these cyclical times especially with the constant risk of govt interventions or lack of support hanging over their heads. Production for the sector has been dropping the entire decade. That's not going to change much. Miners are going through much more raw ore to find less gold and spending multiples more money to not even keep pace with previous years' production. Adam Hamilton came out today stating that gold's correlation to the HUI mining stocks was 86% while to the S&P it was 76%....ultimately serving 2 masters for the time being.

Now with posted 10.2% unemployment I wonder if the bank stress tests will be redone since they used worst case scenarios that were much lower. If the dollar falls under critical support of 75.5 again it can drop back into the 74's. It touched that key support yesterday and sprung back to life. The fact that most everyone is now starting to move over to the "dollar recovery" (stocks fall) trade right now says that it's probably opposite of what will occur, at least short term. Next week still remains a key shakeout week. I'm still hoping for a better miner buying opportunity the week of 11/17. A GLD doji in the making if the buying pressure doesn't pick up this afternoon.

Just when we got used to the 2X per month Bond auctions ending they spring the "quarterly" bond auctions on us. Sheesh! $81 BILL in 3/10/30 yr. bonds going off Monday, Tuesday, Thursday. I think now I understand now why the short end of the yield curve has been squashed down recently with a very low .85% this morning on the 2 year. This will draw in more revenue for the $40 BILLION 3 year "auction" on Monday. Smart! Recall that last bond week was the week they hammered paper gold pretty hard. But not every bond week has been gold hammer time. But to sell $81 BILL in bonds you have to get the money from somewhere (ie stocks and commodities). So hopefully this is the last major bond auction for the year unless next month they have the semi-annual auction, and then the yearly, and then the bi-annual....lol.

roadrunner

ProofCollection

I definitely have some concerns about the action this morning, but as of right now it's just a meaningless blip... we're right back where we started. I'll wait until the end of the day to look at volume for the futures, but also we have to remember it is Friday and Fridays tend to be a bit lighter.

I am disappointed that we didn't at least hold the support level of 1096.5.

I'm still watching and waiting though, I still think 1110 is in the cards for Monday unless there's more signs of weakness this afternoon.

roadrunner

The fact that gold has been hanging around diligently in the $1084-$1100 range for a few days now seems to indicate more rise to come. I'm happy that it's held out this well since the last surge on Wednesday. With a show coming up this weekend it's much nicer selling at higher levels. And with only a few hours to go I think gold should finish out today ok. There is searing demand once again for you guessed it.....$20 Libs and $20 Saints from XF to MS65. Just when you think $20 Libs in MS63 are "too high" at $1850-$1900 from 2 months ago, now they're $2200-$2250 with a $50+ premium for CACs. Following the Philly and Long Beach shows MS63 saints had been beat down on paper to around $1400. Like a trooper they have stormed back to now wholesale for $1625+. The 63 grade appeals to a lot of investors who want a fairly choice unc. coin but don't want to fork over another 10%+ for a 64. In my mind the CAC 65's even offer the best value even if you have to pay the equivalent of around 2X spot for the coins. At >2X spot they are exempt from Patriot 2 reporting/regulations. And frankly, the quantity of nice 65's out there is pretty small. It's probably the only collectible US minted, regular issue gem coin that's over 80 yrs old selling for 2X melt. I think even Gem BU 1950's wheat cents bring a lot more than that.

It seems to me that the weakness in gold stocks vs. gold is very similar to the weakness in smaller generic gold vs. the larger and popular $20's. This current move in gold should have really ignited the smaller gold like it did in previous moves (ie FEB.) But the gusto has not been there this time and has waned in each of the last couple of smaller up-moves. I have to figure that the numismatic link to the smaller gold (ie less money being spent by collectors and more of them continually selling this stuff off) is taking its toll for now. Then again generics have sometimes been known to move huge amounts in just a week or two.

Gold jumped to 8-month highs against the Euro, Swiss Franc and Canadian Dollar, it also took out fresh records versus the Indian Rupee and Chinese Yuan. Gold set a new high against the weighted GDP average of the world's top 10 currencies.
-----------------

COT report:

Gold futures OI dropped about 4K to 493K contracts. The short to long commercial ratio dropped from 4.17 to 4.09 on pretty close to even buying off both longs and shorts. Dollar open interest still about the same. The long to short ratio of commercials dropped for the 2nd week straight after peaking at 2.82 on the 10/16 report. This week's drop was from 2.34 to 1.58, the lowest the ratio has been since the week ending 9/11/09.

roadrunner

Justacommeman

<<

<< <i>Will we see a "star in the evening" tomorrow? >>



Trying to be cute again I see. Why don't you put a little more thought and explanation into your posts so we can all understand what you're looking at? There is no evening star possibility on the gold future charts which trade around the clock, only on GLD. I don't think using GLD charts is valid because it only represents a fraction of the active trading time the underlying commodity is trading. Guess we'll see>>

I'm not a huge fan of using GLD charts either for what it's worth

Regardless- no evening star candlestick pattern was confirmed on ANY gold charts

The Evening Star pattern is one of the more tradable patterns at about a 70% reversal rate

I would have gotten short as well if this pattern came to fruition for a trade

Why? Because you had half of the trading universe looking at the same play : )

cohodk. what now?

MJ

ProofCollection

Friday was interesting as we punched through $1100 briefly but ended they day up only a few dollars. The true close for futures was at 1097.5 as there was some last-minute purchases. A new all time weekly and daily high close. Interesting to note that according to Kitco, almost all of the days' increase was due to demand rather than falling dollar.

I think the move to $1100 as well as the move to the 1080's was really just whipsaw caused by the job report news, and not really part of the trend. I do sense a short-term top coming. Remember a dollar bottom is forecasted for Monday. I think Monday will bring a fairly large move in gold, at least $10 higher to $1110 or so. I'm not so sure about $1125 anymore as the projected turn dates are approaching. Although I do think Sun night and/or Monday could be huge with two recent news headlines/stories: Obama nearing a decision on sending more troops to AfPak, and a weekend vote on health care. Also, I think stocks are set for another good day on Monday which should help gold too. I expect the dollar bottom to be around 75.0 so that should boost gold and stocks nicely.

On a macro level, the gold bull is set to run. We won't be seeing any significant crashes or pullbacks - we won't see gold under $1000 for a LOOOONG time. Just look at the following headlines which you wouldn't have seen a year ago:
-- Indonesian local governments to pay $391m for stake in local Newmont unit
-- Sri Lanka buying gold to diversify reserves: central bank

Central banks are now very bullish on gold, and you can bet that more and more of them will keep jumping on the bandwagon as the CBs that have been shedding gold reserves reverse course and start to accumulate.

In the COT report, about the same number of short and long contracts were added or shed. Large and small speculators are overwhelmingly bullish while commericals are overwhelmingly short.
For silver, commercials went longer on silver while speculators large and small were less long.

RR, thanks for the snapshot on physical gold. Over the past few weeks I have been picking up some MS61, MS62, and MS63 Libs on Ebay when I can get them under and around $700 after cashback and ebay bucks... generally about $50 less than the stated APMEX buy price. I really don't feel that any other certified Pre-33 gold has a good enough value to buy. My best returns have been on my MS61-63 Libs and saints (I stay away from 64's and above), as well as my gold buffs (especially my 2008's)...

RedTiger

The path of least resistance for gold remains higher, though going long at this point is high risk. Those looking to short gold, might take a look at oil. Oil has already broken down, way off its all time highs, and the rally is potentially in failure mode. There was a time when oil and gold were closely linked in terms of daily moves. Historically, the long term correlation between oil and gold is in the 80% range (that is a high number for two markets).

Let me add for the readers, that in general, shorting something that is making new all time highs tends to be a low percentage play, as entertaining as it may be. The better percentage play tends to be wait for a top to establish, and then short the rally failure. SPY might be in rally failure mode if SPY 110 fails. These past few months, so many traders have tried to time a rally top in SPY, so many have failed, with a decent size group of bearish stock traders broken by the duration of the rally.

At the moment, I'm long GLD and SPY with microscopic low risk, low delta positions. Really, it is more accurate to say that I'm out. My current schedule limits the time I can devote to trading, but I'm still taking a shot here and there.

roadrunner

PC,

The $10 Indians actually offer better value to the Libs in the grades of AU-MS62. They are about 1/4 of the pops of the MS61 $10 Libs and about 65% of the pops of the MS62's. So even with a 15% premium in MS62, I like the MS62 $10 Indians better than the $10 Libs. And since the MS61 $10 Ind/Libs are only about $10 diff. in price, the Indian is a no brainer. The Indians are plentiful enough in 62 or higher. But in grades of 60-61 there are actually very few. The pops in 61 are lower than the pops in 64! I also like the $10 Indians in 63 grade only because they have successfully promoted them in the past to well over $2000. But I think the MS61's are a good bullion/numismatic play. And one can readily find choice 61's that look much more like MS62's.

roadrunner

ProofCollection

I do like the Indians as they are the best looking gold coin ever, IMO, however, I've been disappointed with their performance so far. Which means I think you're right... they probably offer the most upside potential.

BTW, I checked volume for friday and it appears to be close to the volume for the M-W of last week. Only Thursday was lacking in volume.

Resistance for Mon is 1110.7, 1104, and support is at 1095.3 and 1088.7.

ProofCollection

We saw 1110 in overnight trading, where I did some profit taking. I sold off about 60% of my positions, including my gold stocks. Silver seems to really be struggling. The gold bottomed out at 75.0.

Not real sure what to expect here. Some say that there is a lot of support at 75.0 for the USD. However, the downward channel it's it puts the bottom at ~74.45, so more downside may be coming. As far as gold, it's up against the upside of its upward channel, not sure it can go higher at the moment. I think there's a chance for a short spike up to $1125. If it happens I think it will be quick.

The articles I saw called for a dollar bottom today, so I think we're seing that. I think gold is supposed to top today or tomorrow. If this is the case, the maximum downside, assuming gold stays in its channel is probably around 1050.

jmski52

I couldn't stand the pressure on Friday and pulled the trigger on some 2009 1/10th oz. AGEs. Consider that your signal for a gold pullback.

I'm not done yet, cohodk.

ProofCollection

Looks like my call was good so far to sell at 1110, but gold isn't going down much either. I'm kind of getting the feeling that we might get another push to 1112 or so. Ackerman is still calling for 1134, and he says if it exceeds 1134 by more than a few dollars it will continue to go up. I don't believe his calls that much but sometimes he gets them right.

Interestingly, 1134.9 is a resitance level for today.

Support for Tues is at 1096.7. Resistance is at 1104.2, 1112.1, 1119.5, and 1134.9.

Edited to ad:
I'm sure Ackerman will be right, eventually. I'm just not sure it's going to happen this week.

roadrunner

GDXJ, the gold/silver miner junior ETF apparently is commencing trading 11/11/09. It will be interesting to see if the euphoria of a new fund will drive it up initially. Many of the gold miners in this group have moved up strongly the past week or two and might be due for a breather. In going through them I'd say about a third of them are peaking, a third are moving up, and a third have been moving down somewhat....a mixed bag. On the flip side most of the GDX goldies are near or at peaks with the exception of AEM and Kinross who have still not recovered from poor earnings reports. So in that view GDXJ looks preferable to GDX right now. These miners will be linked to the performance of the S&P as well as gold. Recall that the fund is 80% gold miners and 20% silver miners. With the GSR rising it will act as a slight brake to the fund's performance even if gold is moving up. The top 14 market cap companies carry 58.5% of the total weighting. The bottom 14 market caps carry only 16%. That leaves 24% for the middle 10.

Some info on GDXJ - makeup by percentage, web sites, etc.

The dollar is looking more a more like toast each day. Sinclair feels it's sitting on a trap door waiting to open. Sol Palha notes today that even though the DOW recorded yearly highs in November it's still not higher than last November. If one factors in the dollar's 15% decline yoy these are not true highs. November 2008 at 9600+ was technically "higher." A value over 11,000 would be needed to exceed the dollar adjusted value of Nov. 2008.

roadrunner

jmski52

I read Sinclair's entries this morning and bought some more gold today. He has a way of making the case for gold better than most.

Now I think I'm set. Now, the pullback can proceed. Carry on.

ProofCollection

Tuesday was rather quiet, and the charts are loaded with energy. Honestly, I think it could break either way, and I think Wed could bring us a $20 move (maybe more), I'm just not sure which direction. Volume dropped just a tad, but still pretty high.

Things look pretty bullish approaching midnight here as we're about $3 from the ATH. Silver is also moving back up quite nicely. Stocks had a great day, SP500 is ~$5 from 1100.

Again, we have a convergence of milestones here, and things could go either way:
--Gold within $3 of ATH, at the top of 4 month upward channel. - Will it blow through or bounce down and stay in the channel (downside target ~1050/1060)
--USD in the center of its downward channel, but at a major support level: 75. Will it bounce or give away? OR will gold go up on demand rather than dollar deval?
--Stock market near a resistance point at 1100 - also just filled a gap on SPY from 10-8-08

Tonight I bought a few more contracts, but I'm playing these with a tight stop. I just hope I don't get whipsawed out of them.

Support is at 1100, 1104.3, with resistance at 1111.5, 1116.7, and 1130.

ProofCollection

Here, got some charts...

Justacommeman

gold is pretty overbought right here and now that august's third leg up is basically complete locking in trading profit seems prudent.......MJ

roadrunner

Generic gold is on fire. Just since yesterday MS63 Saints jumped $100....now at $1800 "ask." Congrats to anyone who bought them a month ago during the post Long Beach and Philly show beatdown at <$1400. MS63 $20 Libs now hitting an unheard of $2500! Not bad leverage with gold moving up $100, the $20's in 63 have moved up $400-$600. Even the smaller gold is starting to heat up with the MS63 $2-1/2 Libs at $1030. That's a $100 jump in one day. The $5 Libs also moving up nearly as fast in 63. $10 Indians in MS63 have been leapfrogging daily with another $80+ added since yesterday to $1560.

Getting close to my guess in the end of year prediction thread of $1125. A little bump up in silver to $18.75 and both will be hit. Getting past $1112 last night sort of pushed gold back into the "very" bullish position again. US dollar continuing to hand by a thread.

roadrunner

ProofCollection

We got our answer last night. Up seems to be the direction for at least the next week or so. But I can't ignore the fact that Justacommem is right, but I have to think that this could be the start of a new more agressive move up, maybe to 1200 by the end of the year.

Silver's move up was extra bullish. I bought a contract yesterday at 17.27 and it's up to 17.70 now. Wish I had bought more. Not sure I should add at this point though.

Justacommeman

pm's can stay overbought for quite awhile.....it's the everyone hitting the door out at the same time in pm's I hate to get caught in.....been there. MJ

jmski52

A question for the technical chart traders - what's a Swiss Chair?

Just askin.

clouisejewelers

<< <i>A question for the technical chart traders - what's a Swiss Chair?

Just askin. >>



Maybe a chair with a bunch of holes in it??

fc

impressive run so far. my main concern is why does silver not seem to
be keeping pace? I would have expected it over 20 dollars by now.

i still think this is a big speculation run by easy money. i am trying to figure
out what will pop it besides interest rates going up.

or am i way off base here?

Justacommeman

<< <i>impressive run so far. my main concern is why does silver not seem to
be keeping pace? I would have expected it over 20 dollars by now.

i still think this is a big speculation run by easy money. i am trying to figure
out what will pop it besides interest rates going up.

or am i way off base here? >>


I'll take a shot here"

Depends on your time frame I guess

a) silver has out performed gold YTD wildly on a pct. basis. I've had a nice short gold/long silver pairs trade on for awhile now.
b) If you are speaking from an all-time high scenerio you are spot on

As for reaching an all-time

c) gold is now recogized once again as a currency. Silver is not
d) gold gets the benefit of a safe haven play in these turbelant times and IS prospering in a deflationary period in the now AND probably in an inflationary period as in the near future. Truly remarkable,
e) rather one likes it or not silver is treated as a highly speculative beast

JMO............MJ

jmski52

i still think this is a big speculation run by easy money. i am trying to figure out what will pop it besides interest rates going up.

The economy is badly wounded and won't be able to take an interest rate hit without shedding a few more million jobs, and that's a political nightmare for this administration. Nevertheless, there is pressure from the bond markets for higher rates.

Bondholders have to be feeling the pinch, and yet, the government can't allow rates to rise because it will also cause interest payments to T-Bill and T-Note holders to balloon, which will cause the budget deficit to balloon too.

What's a bondholder to do if his principal is eroding and his retirement money (or other savings) is disappearing? I know what I'd do - look for alternatives and then sell some bonds. This just puts more pressure on bond prices, which means more pressure for rates to rise, which means more trouble for the government's income statement.

So, your observation is correct, and the problem is that easy money solves the problem in the short term at the cost of making the long term even worse. That is the strongest case for precious metals that we've seen ever - at least, in this country.

Keep in mind that the bond market is huge when compared to the gold and gold-equivalents market. Any spillover into precious metals from bondholders fleeing the bond market is much more significant than if the money was flowing in the other direction.

Any crisis of confidence in the dollar and in the financial system itself will be met with extreme measures, in my opinion. The ones who wield power in government and in control of the big banks who knock down $Billions for very little work are the ones who feel most desperate when this stuff happens. Our job is not to become their victims.

KUCH

<< <i>impressive run so far. my main concern is why does silver not seem to
be keeping pace? I would have expected it over 20 dollars by now.

i still think this is a big speculation run by easy money. i am trying to figure
out what will pop it besides interest rates going up.

or am i way off base here? >>



Here's my thoughts. I'm not a "chart" observer. I leave that to the pros hear, and I do analize their predictions. The world's economy is basically on the cliff, holding in it's arms; debt, unemployment, US dollar decline, with inflation/stagflation awaiting at the bottom of the canyon. Gold is currency, it's a hedge and everyone is buying at this time. Silver on the other hand, is not really treated as currency, but rather raw goods, manufacturing etc. It is also used as a store of wealth, and here's my belief .... When the price of gold becomes so high that the middle class can NOT afford to buy it (or won't pay $1,800/oz) then they will turn to silver! ...... This is just my belief.

I'm going to purchase more silver at these prices and really up my move with silver, when gold is at $1,600 and silver has moved to the $18.75 range.

Fountainhead

Hmm. Tomorrow's Friday. Would you rather be short or long gold going into the weekend? The IMF just released a new "staff position note", The Debate on the International Monetary System, discussing the need for dollar alternatives:



<< <i>SDR component currencies (16 at the time) or using a portion of the Fund’s gold stock to absorb
the costs. But the scheme never came into force as members could not agree over cost sharing of these risks,
presumably reflecting in the end a fairly sanguine view of the dollar’s prospects, which turned out to be
warranted.
Today’s circumstances seem rather similar, and making the substitution account a reality would require
agreement on socializing the exchange rate risk that is currently concentrated in certain large balance sheet
positions. Indeed, some have argued that Governor Zhou’s proposal to substitute the SDR for the dollar is a
way for the Chinese central bank to diversify reserves swiftly out of dollars without facing capital losses.
Ironically, the status quo may offer better incentives toward orderly diversification, as the high costs of
moving out of dollar assets too fast make such a move unlikely. >>



Translation: SDRs aren't currently working, so CBs are getting out the only way they can - gold! The dollar price is important, but not nearly as much as buying tons of the stuff for gov't coffers. Until a new "Bancor" system is set up, gold should continue to rally. I figure 300 tons/month are going in to CB coffers for the foreseeable future.

Any price corrections will be merely small, bureaucratic ones. I'll stay long over the weekend; I may sell short on Tuesday for a day or so. The CBs will allow a correction by then.

roadrunner

One major point not mentioned is that our 5 too-big-to-fail banks hold approx $203 TRILLION in derivatives, of which 85% or about $171 TRILL are interest rate swaps. Considering that the banks probably issued those on the short side, a tiny rise in rates would probably incinerate their balance sheets in short order. So that's not going to happen until they find a way to unload more of these on the US public or segregate them somewhere else for a few decades. These IR swaps were one of the major supports structures for the low interest rate environment of the past decade. These are the biggest time bombs still existing in the US financial system....assuming we're not counting future SS and Health Care liabilities to the tune of $75-$100+ TRILL.

roadrunner

Wolf359

re: derivatives and "Too big to fail banks". To quote management expert Peter Drucker, find the indispensable man and fire him.