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Penny and the Jets


Gold $412 Silver $6.70 Tuesday 5th October, 3am Sydney

G'day. J-E-T-S Jets, Jets, Jets.!

And so the G7 (plus China) came to pass and the world was none the wiser, if in fact it cared at all. The U.S. dollar "sell rumor-buy fact" trade certainly paid off for those who suspected that there would be nothing of significance announced. A month out from U.S. elections surely suggested that there wouldn't be much rocking of the "dollar boat" and that there would be some sort of unwind of some short dollar positions, including gold and silver.

The Rupee rose against the dollar and the Indian stock market rose to new highs today. This, coupled with today's fall in dollar priced gold, should see some response from the world's largest physical buyers. The physical market buyers of India stopped buying at $385 on the last run to $430. Currently they are happy buying at $415 and this provides me some comfort that we are not in any way as far ahead of the physical market than we were early this year and the risk of such deep reversal is somewhat reduced, IMO.

Gold has been relatively quiet in Asia and the wheels didn't really fall off the gold wagon 'till Europe started moving the currencies around and we saw some longside liquidation from a few funds which got the ball rolling and momentum built before we found some support in the low teens. I still suspect we will see a test of the 200DMA to the downside, which could provide another good entry level for those favorably disposed to the yellow metal (not advice). A good trend line anchored off $395 early in September, gives us support at around current levels of $412-13 and a break could signal a retreat back to that sort of level, especially with any corresponding dollar strength (no matter how much it isn't warranted)!

Take it anyway ya can get it:

The Amex Gold Bugs Index (HUI) has had a fair time lately and I see that Durbans (DROOY:NASD) got their skates on late last week and added 25% to their share price. A pity they gave back nearly 10/% today! Nice work if you can get it right. Newmont Mining (NEM:NYSE) couldn't hold onto the $45 handle it had clawed its way back to last week. This is THE bellweather so keep an eye on them for sure. The shares will be pretty wild going forward I fear. The moves in the underlying metals will be dwarfed by the moves in the equities, IMO, both ways. Expect that we will see some painful days in the next 6 weeks while the world waits to see who's in charge of the checkbook of the world's biggest debtor.

Speaking of Debt and deficits and reserves and stuff-:

Silver copped a drubbing today as the white metal gave back a significant chunk of last week's rally. These 25 cent up/down days are tough to take, although we should continue to monitor the spot spread to the 200DMA, as there appears some good indicators thrown up regards the short term direction. Hecla Mining (HL:NYSE) has been a very solid performer of recent weeks and should continue to be a leader in the silver issues. Silver equities weren't down as much as silver the metal, in some cases today. Either we get a rally in silver pretty quickly, or the equities must come off to reflect said metal price changes.

I saw the Jets win their 3rd consecutive game of the season today. Has that ever happened before? Where is the Super Bowl being played this season?

Some may remember that I was trying to sell my best broodmare a few weeks ago. It fell through after she foaled her little colt in early Sept. She is pregnant again already to Desert Prince. Anyway, her ¾ sister, Vouvray, runs as one of the favourites for the $4 Million Caulfield Cup in a couple of weeks. If she doesn't win the race, no harm - no foul. If she does, it's a lottery win for me. Giddy-up.

My little bloke was presented with his first real wood cricket bat last week (mini) and we took it for a hit today as it was a public holiday here. Can hit the ball super for a 2 year old but he got a little distressed when he saw what happens when your bat hits your Dad in the face, while you swing it wildly around the picnic rug! You know how much blood pi$$es out of a split eyebrow and how quick it swells up, well he got a pretty good life lesson! The only way I could console him was to show him how lucky he was not to have damaged his new bat and that the blood would wipe off!!

Enjoy the rest of your day ....

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position in gold, silver, drooy, nem, jets

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