Is the London Fix in for Gold?-Minyanville

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Is the London Fix in for Gold?

Laurie McGuirk Sep 10, 2008 9:45 am


		Litmus test for both yellow metal and silver.

The market is at a critical juncture, and it’s testing my whole paper-versus-physical-metal theory and analysis.

Lowest close in gold and silver: Gold 764, silver 11.17 at the time of this writing. Below the 775 level, many charts pick up on.massive physical buying and, same as last time, it’s paper gold trading down here.

There hasn't been a London Gold Fix below the 775 level in this whole sell-off; note the London AM fix last night was 799+. The physical market will tell us much tonight at the rate-set. If it sets below 775, I'll be shocked, and if it sets below there for 10 days, I'll have to re-assess my whole analysis.

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This is the litmus test. The current 764 price is some $35 an ounce below physical yesterday. If they try and set London Fix there tonight, I can't imagine how much gold will be required to satisfy physical demand down here. It will probably set around 782-78 or so, is my expectation.

Note that gold is down in all currencies, so it's not just a dollar move. That the government bailed out Fannie Mae and Freddie Mac is a disaster, but no one seems to see it that way. Inflation is out of control. Period.

Silver has been canned, and again, it’s all paper silver. Investors for physical silver can’t get enough, and there are large delays in delivery (apart from large bars). The gold-silver ratio (68) is the worst it’s been since 2004. Many have forgotten that silver isn’t just an industrial metal - expect a savage rebound to 12.70 in a few days.

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Comments (9)

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Kurt Schoeneman

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09-10-2008, 8:22 pm
Well, when you put it in the context of CA real estate, you make pretty good sense. Frankly, the gold I bought in 2003 and later sold was done just because I thought it was cheap, couldn't go down much more and, therefore might go up. I was cor Read More

Robert Holl

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09-11-2008, 7:22 am
Sure PMs could self off a little more, but why be so greedy as to wait and catch the absolute low, and risk missing this being the low. Especially when the upside will eventually double or triple your money even if you bought in back at 1k per oz. Is Read More

Noah Comet

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09-11-2008, 9:10 am
Yesterday the AM fix was 774.25. That's below 775 which you were fearing but the PM was 775.75. Does the AM matter? Read More

Michael Honeycutt

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09-11-2008, 3:59 pm
Laurie, Great to see you back in the Ville! Read More

William Mcdonald

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03-05-2009, 1:47 am
I have heard that " Euro CB's have dumped over 220 tonnes of gold on the market in the last 3 weeks...ie. they've met nearly half their yearly selling quota in 3 weeks. " Is this true ?. Read More


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