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Morning Metal Report


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Gold $429 Silver $7.46 Tuesday 22nd February, 9pm Sydney

G'day. This capped gold price at $428ish is under some serious pressure and it may well be this week (tonight???) that we see a decisive break upwards. I dunno if the seller will continue with what appears to be a revenue limiting strategy, or maybe they will just stand aside and let gold head back through $432 at first shake of the stick, and maybe then up towards my next level of resistance closer to $436-38. The physical market is soaking up a lot of metal down here.

On the other hand, capping the gold price for a few months wasn't all that difficult in the paper markets it appears, so maybe more of the same will be par for the course. I still contend that whomever the seller is will either stand aside or get steamrolled. Either way, there is an inevitability to where gold is headed, it's just how long it's gunna take.

Maybe Elmer wasn't all that convincing with his response to Texan Congressman Ron Paul's cheeky question about his 1966 dissertation regarding Gold and Economic Freedom. Ron Paul didn't take the "Maestro's" words at face value and his analysis/retort makes some interesting reading.

India is still slurping up physical metal and I still reckon that China will take every ounce the IMF might lob into the market. My take on it is that not an ounce will ever see the light of day. The Observer's observations regarding China and India make some good reading.

I see that silver has continued its march towards double digits after the last collapse of about a buck fifty in a few days. Some quick operators could've snaffled some early Asia at around $7.38 but there wasn't much of a window of opportunity. Trend strength is still good and all indicators look positive. That sets off alarm bells in my mind. Care recommended here, just in case we have a nasty little 20-30 cent hiccup and end up back down towards that $7.20-22 level. $7.68-72 is where I see next serious resistance, once $7.52 is in the rear view mirror for a day or so (not advice).

The Amex Gold Bugs Index (HUI) is marking time around the 210 level. Same range applies but it should get a little boost today (not advice). I note Goldcorp (GG) released its numbers. Perfect. How much do I like the whole deal that they don't sell their "product" if they don't like the price? Heaps! Maybe others could learn a few lessons from these "whacko's". Their exploration results at Red Lake are nuthin' short of spectacular. Drill holes don't grade 10 OUNCES per tonne down here. We chuck a party if someone grades 10 grams!!!! I own 'em and am very happy to.

We are in the middle of moving apartments. What a huge pain in the freckle. Stress that I don't actually need at present but, hey, the new digs are pretty cool and the location, whilst devoid of the harbour view, is right up our alley. I will have zero comms from home for a few days early next week. Don't even ask me how poor Australia's Telstra and Foxtel are regarding their services 'cos I just might tell you. Anyway, after 3 different technicians attend our new digs, in specified order, at their availability... well we should be all sorted by about Wednesday night! Gotta love the technology monopoly down here.

Enjoy the day


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position in gold, silver, gg

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