Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

A Bet is a Bet


Keep those pants on, Laurie!


Gold $422 Silver $6.55 Friday 21st January, 11pm Sydney.

G'day. It seems that we are gonna bump around between $419-426 for a while, given what's happening in the currency markets these days. Silver couldn't go on with its little attempt to get back above $6.75-80 yesterday, but I'm pretty comfortable whilst the $6.40 level holds and still think anywhere around $6.45-55 is super buying especially anyone looking for physical (not advice). The risk of being long is a buck down, IMO, but risk being short means you may have to come up with 5000 ozs of physical silver per futures contract. There's a heap of players in silver who haven't a clue what a bar of silver looks like let alone understand its historical monetary role or its practical and applicable versatility as the greatest metal on the face of the earth, IMO.

There appears to be some concerted efforts to send gold through that $418 level in the hope of triggering some stoppies and causing a little cascade to take gold down to the $412ish level of the 200DMA. The physical market is doing a super job in providing solid support around $420, but again I have in the back of the mind thoughts of further liquidation by nervous longs, dollar inspired of course, creating a "paper avalanche" that overpowers the physical market for a few sessions. Momentum players jumping on any break at around $418 could cause a little havoc but I expect the physical market will provide sterner resistance than most expect. I may get a little anxious should we see sub $418 for longer than one or two Comex sessions.

It seems that Europe is starting the currency games again today. The Aussie and Kiwi are strongly higher in early trade although I'm not convinced as to the conviction of the move. Time will tell. Gold is doing sweet FA with the currencies a bit jumpy, and is staying in a buck-fifty range. I expect a quiet session today but keep your eyes on the dollar. I see that the Euro is just bumbling around the $1.30 level and could well be on its way to 1.27. My guess is that we will bumble around here, give or take a big figure or two either way.

I see that the gold/silver ratio is back testing the 65 level again (ounces of silver to buy an ounce of gold). It traded at 52 only 8 months ago and has only been above 65 a handful of days in the last 12 months. I used to like trading this at anything better than 75 in the last 3 years or so but am now lowering the level somewhat and would dearly love a crack at 68 or 70, as I think silver is just about as low as it's gonna get anytime soon. Maybe we will get a blowout down to $6.10 in silver, but I wouldn't hold my breath waiting. The silver physical market is pretty tight at present and the ratio trade is a very, very smart play, IMO.

I hear the refiners in Europe are being tested as to their capacity to produce bars in both metals. Is demand that strong that they can't keep up? You wouldn't know if you were just reading the WSJ or whatever financial rag you are partial to, that's for sure. No one is talking about it. Didn't Sweden just lob out a heap of physical? Where did that stuff go? Obviously not to the buyers of physical who are pushing the refiners so hard. Surely a quiet little 15 tonnes or so hitting the physical market would have helped out these poor refiners who are seemingly struggling to keep up with India and the Middle East, especially with the Indian wedding season imminent. There must be some pretty happy Dads of brides who have recently been given a great discount on the cost of the dowry.

The Amex Gold Bugs Index (HUI) has been a very solid leading indicator for the gold price the last few years. I see that we have held the 200 level for a few weeks and maybe turning back up. The 200 level looks solid and I'm getting more comfy that I will get to keep my pants on when wandering around Walker Street here in North Sydney. A bet is a bet and the strike price is 180. Plenty of room! Certainly worth keeping a peeper on this little puppy and I expect we will be back nudging the 220 again in pretty quick time. Will it lead to a revival in the metal itself? I reckon so, but let's see what gives over the next week or so.

Vanessatheundressa races in New Zealand in a good race tomorrow as her final hit-out before the big one, The Wellington Cup on 29 January (provided she doesn't disgrace herself tomorrow). A mile and a half is the distance, which she is bred to run right out. She has NZ's best jockey on her as well. She is a front runner who needs to draw a good gate so she can use her early speed and then control the race. Every race that she has led after 400 meters, she has won or run second (by an eyelash). She obviously doesn't like horses running past her! She drew gate 1,which is as good as it gets for a frontrunner! I may even have to have my first wager on this animal, after a dozen or so starts. I usually don't back my own horses, but I have a funny feeling that the cards may have all fallen the right way, for once. The distance is my only real worry, although someone attacking her at the front from the start, could fire her up too early and kill both horses' chances. Anyways, I hope it's better than my gut feeling about silver heading to $7.20 just before Christmas!

I spoke with my bloodstock agent today and he reckons I will get a bid on my hot mare on Monday. The "tyre-kicking" was worthwhile from all reports and the fine people at Woodlands had her all tarted up and looking good. He was pretty cagey about who and how much, so I don't really know where I am. He didn't say whether they want just the pregnant mare (to Desert Prince) or also the weanling colt at foot(by Commands) as a package. Prices vary depending on what they want. All I know is that a sale will see every cent of the proceeds thrown into precious metal equities and bullion. Was there ever any doubt where the proceeds were heading?

Enjoy the weekend and happy to see a Steelers-Falcons Superbowl.... (what bet I get neither correct!!)


< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos