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Osso Bucco


Thx McGuirk!

Gold $421 Silver $6.57 Wednesday 12th January, 11.30pm Sydney

G'day. Have just had to endure another perfect day here in Sydney. I was just out looking over the harbour and watching the twilight yacht races, enjoying a big glass of Petaluma chardonnay. Lisa is knocking up some Osso Bucco for dinner and the smells around here are incredible at the moment. I am concentrating hard on not drooling all over this keyboard - and it's not gunna be ready for another hour or so!

The gold market appears to be just drawing breath here around the 420 level. I suspect it is building energy for its next inevitable burst higher. I doubt that there is going to be much of a wait for the grind higher with my initial targets of $432 and $448 on the early warning radar screen (not advice). There is just too much stuff flying around on the macro scene for gold to do much else. How about the latest "alliances" between some of the bigger "emerging" economies like China, India, Russia, Brazil etc? It makes some of the recent large equity deals involving primary industry and minerals look a little more interesting.

The physical gold market is very happy down here. India is doing what India does - buying gold. There's plenty of real demand but more paper supply. Hence the current price malaise. The downside looks very limited from my perch. Any risk-reward analysis would favour the upside, IMO. It's just a matter of timing as I see it, although I would say buying at $420 or $410 won't matter, if (when) it is at $550. Watching closely some of the support lines on the longer timeframes and again stress that I don't reckon gold can go down 10% from here but can go up many times. Sound reasoning and simple logic should illustrate why. Use them occasionally, it may surprise what happens as a result.! Just sharing the vibe.

Silver is an annoying little bugger and someone needs to take it out the back shed and give it a freaking hiding. This game is not for the faint hearted as recent events have revealed. The recent dummy-spit from $8 down to $6.4 is almost as laughable as it has been painful. The price divergence from the DMA 's should be watched when it gets real slippery. Paper silver versus physical silver is the whole game in a nutshell. Physical silver is THE most undervalued currency/commodity that I know of in the universe in my opinion (not advice). Finished.

The Amex Gold Bugs Index (HUI) is also gaining some sort of footing around the 200 level and it is surprising (to many) to compare the Jan 2004 levels to the current. Compare gold and its associated equities at both junctures. It should stand out to any observer. Precious metals equities are just straight out gimmes at current levels and that is a definite opinion. There are a handful of metal equities that I consider bombproof at their current prices. Talk about "free money". I just can't sell this bloody mare fast enough!

U.S. bonds yields look way too low at 4.25%. I wouldn't be surprised to see a 6% print sometime this year, so a punt on a deep out of the money option structure may be worth looking into for those optionally inclined. Definitely not advice.

The twilight races that I mentioned earlier are weekly yacht races around Sydney harbour organized by the Cruising Yacht Club of Australia. The CYC also runs the Sydney to Hobart race each year and this years' race saw the fleet get battered by some really fierce storms with many yachts retiring as a result. What we were just watching was much more sedate sailing in the harbour. Some of the bigger yachts are pretty impressive as they slip past and it reminded me that my dad always says that the best yacht to go sailing on was always someone else's! They cost a tonne of bucks to maintain and race, but it really is something to be on a big yacht at full-stick. It's just whatever pushes your buttons, I guess. Horses are mine- and they're heaps cheaper (and that exposure is being deliberately and significantly wound back)!

Anyway, the news over Christmas was obviously dominated by the cataclysm that was the Indian Ocean tsunami. Occasionally there was some good coverage about how the yachts in "the Hobart" were going. Interestingly, we saw the rescue of the crew of the largest yacht in the fleet as it was smashed apart in Bass Strait. Abandoning an uninsured $5 million racing yacht, somewhere in Bass Strait; in the middle of a severe storm; knowing that the salvage laws of the ocean meant "finders-keepers" and the boat could be lost; must have been a difficult decision for the skipper. He owned the bloody boat!

There was legal gambling on the yacht race. This is Australia after all. You could bet on outright line honours and also the Handicap result. The biggest, newest, most sophisticated yachts were all heavily backed to cross the line first. That those yachts broke apart in the storms wasn't factored into the punters calculations. The "outlier" risk wasn't fully appreciated, a bit like bonds are at present, in my opinion.

The yacht that won this year, had won it a few times previously and the crew had survived the "killer Hobart" of '98. A solid yacht, proven at the distance and they had form in nasty conditions. They were 12-1 and many said they just "weren't fast enough" to match it with the "new guns". They weren't first out of the Sydney Heads to make the right-hand turn south to Hobart. They weren't even first into Bass Straight. But, they got to Hobart. First. How "Golden" is that?!! Draw your own analogies.

The Osso Bucco was sensational. I have to admit it; I'm definitely a bone sucker. There are those that do and those that do not. I do. It wouldn't matter either, if the bloody Queen of England herself was sitting next to me at the table. It's one of life's simple little pleasures. That anyone could devour a meal so perfect, yet not suck out every bit of marrow and juice from those bones,(and mop it all up with some fresh bread) is beyond my comprehension. The dog is going hungry tonight!

I would want to know if breaks in :
Gold $418
Silver 6.40
HUI 182

Enjoy the rest of your day and am off to punch out some zzz's before we wake to a 40 celcius day tomorrow and Friday. Ouch - best we get an extra box of cans in for this one.


position in gold and silver

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