Quite the Nightcap
G'day. It appears that Gold and Silver have certainly taken a back seat to Oil when it comes to being the "hot game" in town these days. Fortunately, the absurdly quiet metals market has allowed a little extra time to get this residency application moving for the girl. Friday was spent in various Law enforcement offices as we had to get FBI fingerprint stuff done, Australian Federal Police checks on both of us and all sorts of other hoopla. Today was all medical stuff. It is a serious test of one's patience and dedication to the cause.
Gold should probably have a crack at $430 tonight with serious resistance at $432 and then again at 36-7. We are still sitting in a wide channel of $410-445 and we may be within that range for quite some time. The pressure just continues to build. What the catalyst for a breakout will be, I dunno, but it will certainly have something to do with physical gold demand. The physical market is still very robust, more so on the dips down into the low '20s. My guys around Asia haven't seen any significant slowdown in the recent buying frenzy. Dubai jewelers are having a seriously good year!
Silver will probably struggle around $7.22-25 initially, but I expect we retest $7.45 again this month, maybe this week! Anything sub $7 is just a gimme in my book. Just sharing the vibe and not advice.
Many asked me which "historic goldfields" I alluded to, when I wrote a piece last year regarding where I see some significant upside on the exploration sector. I don't/won't comment on exploration/penny stocks or small caps in this forum so didn't offer any response. But here is an article from the Weekend Australian that may shed some light. There are many, many other areas in Australia and elsewhere in the world that should be examined closely.
Today's SMH also carries an article on Gold with some interesting comments from Anglogold Ashanti (AU) CEO, Bobby Godsell. It all looks pretty rosy for Gold from all indications by him, although his point about increased expenses eroding margin due to currency movements, is not to be lightly discounted. It is nice to see a gold friendly article anywhere in the mainstream press these days, notably following all the recent IMF gold sale blabbering by Mr. Brown, the debt relieving Pom, who also just happened to dump the Bank Of England's gold into the market at possibly the worst time in the last 30 years! He certainly doesn't have any appreciation for monetary history or concept of real monetary reserves, from where I sit..
Goldman Sachs daily economic comment today runs with the headline - "The Dollar, It's just so hard to be bullish". In my opinion, the fundamentals just can't support a bullish case at all. I fully concur with GS, but am mindful of my conversation with the currency guru the other week, that I shared with you. There's a heap of data coming out this week around the globe that could give us more of an idea of just where we sit with regards the fundamental picture. Anything bucking the trend of the continued deteriorating fundamental outlook for the dollar should be viewed as an aberration, IMO.
Interestingly, Barrons had an article that pours some cold water on the argument that there's plenty of crude around. Everyone is looking at the inventory, which historically is quite sound, yet also misleading. Dividing inventory by daily consumption shows that the number of days storage is historically low due to increased consumption. Maybe people are getting a little ahead of themselves sending the price down some 10% last week and we are again back sub-$53. I am still comfy saying we'll see $70-75 oil, and not that far into the future, this year I reckon (not advice). Refining margins will continue to be under pressure and there is still little capacity for increased production runs of the high end whites, and who knows how much time has been spent on maintenance with demand at such levels. Residual Fuel oil (HSFO) is just about being given away these days! Hydro-crackers that refine blacks to whites don't grow on trees and take a while to build. Hmm.
The Amex Gold Bugs Index (HUI) is back under 200, again, but 180 is a long way away, IMO. Am I nervous about having to drop trou, due to the bet, anytime soon? Me? Not a chance. I'll start worrying when we're at 180.10 and not a minute before.
The weekend was a rather quiet affair down here following some unplanned shenanigans on Thursday night. Lisa introduced me to Anejo 1800 Tequila, after catching up with some old mates from the markets. One thing led to another and, bingo, it was 2am and we still hadn't made it home. Geez Louise, that stuff would kill a brown dog! The only tequila I had ever previously consumed was always clear, not brown like a good scotch. It tasted good but wow, what a kick.
Anyway, after a day or so recovery, we decided on a quiet little dinner on Saturday night with a few friends. My famous roasted leg of lamb washed down with a large slurp of good Aussie Shiraz. Everything was very pleasant and, at about midnight, we decided to duck up the road to one of the 30 pubs within walking distance, just for a quick nightcap. The door to the apartment block slammed shut just as I reached into my empty pocket to check that I had the keys (I swore that I had them when Lisa asked me).
The new apartment is one of these really secure deals for access to the building. The doorman knocks off about 11pm and gets in at about 7am. There hasn't been a place that I've ever lived that I couldn't break into, somehow. I hadn't lived in anything higher than 2 or 3 floors and so the 9th floor looked somewhat troublesome, but not impossible. It was decided that my Spiderman skills would be somewhat inadequate in the circumstances, especially as my brother loudly pointed out that we had polished off a significant quantity of the red stuff. It's lucky the pubs down here trade 24 hrs and we had somewhere to hang out. It was a some nightcap!
My Dad is back to normal, and he recently gave Lisa a book to read discussing "Aussie Culture," especially since she is trying to officially live here, rather than just hanging around as a "tourist". It's called Australian Accent - by John Douglas Pringle. It was written back in 1958 by a Pommie who lived here for 5 years, and many of the observations are eerily applicable today, others are just plain laughable, as well as illustrating where our National character and personality comes from. I will share some quotes from this award-winning book over the course of the next few weeks.
"If, then, culture is to be judged by the general standard of education and the arts among the population, once again it must be said that Australia has little or none. Indeed there is a terrifying crudity in the manners and pursuits of the masses, whose intellectual interests seem almost entirely limited to the study of the racing form"... pg 116.
A few short quotes from this book will give us all a laugh over the coming weeks, even though it was written as a serious commentary over 40 years ago. Better still, grab a copy, although it is hard to find as it was last printed in 1978.
Enjoy the day ...
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