G'day. The weather bureau were out by a day. Sydney Airport clocked a high temperature today of 41.4C. That's bloody hot! The Southerly Buster, a fierce cold front from the south, hit at about 5pm and the temperature dropped by 20C in less than an hour. The lightning show at present is pretty impressive. The forecasters got it right that we were up for a serious hot one but made a big song and dance about yesterday as being "the bad one". They got it right but their timing was out. Just.
In the markets, how many times do we get the move correct but the timing is out by a little? I prefer to have a daily/weekly/monthly timeframe and I suppose that is important when assessing what I put out there. If I say stuff like, "in the short term", I guess that means the next 24-72 hrs. Again it must be noted that I'm always gonna be leaning to the bullish case for gold but always looking for why I should alter my opinion and take some profits. Hey, I'm very long and I don't want to sit through big dips on the way up either. Not advice - just sharing the thought process.
Anyway, looks like we have a $448-455 range in gold at present. India is happy enough to import at $450 plus. My local bar dealers are "busy, busy, busy" in their own words. The physical market is coping just fine with gold up here. I am noting the COT reports and am comforted to note the resilience of the small time speculators even with many "gold experts" looking for a correction back to the low $400's. I'm no expert and I'm not looking for much of a correction at all. Maybe to $444 short term but nothing to be scared of. I would be amazed to see a sub $432 again before Christmas but you never know these days. There is room enough for paper gold to run another 30-40 dollars ahead of the physical market. That could put us close to $500 in my books but probably early '05 (not advice).
The alarm bells that will be ringing with gold $500+ should further put gold and silver in the investment spotlight which will propel it higher still. Taking out the old $850 high is a formality, IMO. It's just whether it's in 2005 or later still. I'm in no rush and people should remember that $850 gold in 1980 is about equivalent to $3000 today. There's a lot of upside in gold with bugger all downside. That's the right sort of risk/reward one should be looking for in any investment, but remember, I'm biased! That it is the only financial instrument that is not someone else's debt, should sell itself in the current environment. Just thinking out loud again.
The Amex Gold Bugs Index (HUI) perplexes me. I dunno what to say. Underwhelming reaction to the recent new highs. I think I better start flogging off some horses and buying more gold stocks. No kidding. I'd rather own a handful of different stocks at current prices with gold at $450, than any of my horses that are apparently worth a bunch of such shares.
Silver looks fine to me and buying dips, especially the silly ones that get way overdone, is my plan for the day I reckon. Hoping for a buying opportunity back near $7.35 but $8 looks likely beforehand.
Today's range could see:
Watching the Rupee and the Indian stock market ... there's lots happening over on the sub-continent.
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