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Precious Opportunity?


Gold $393 Silver $6.20 April 22, Sydney 2am

Just a quickie today sorry...

Relatively quiet day in Asia today with a narrow band for gold and silver. Silver still trading as though looking for lower but I'm struggling to reconcile the price action with the fundamentals. Nothing structurally has changed in any of the commodity markets yet we see some prices 20-30% lower than a couple of months ago.

Indian premiums are still very large, continued evidence of large scale Indian buying. It was mentioned to me today that a silver fabricator did some hedging ... hmmm, consumer side hedging at higher than $6 per ounce is comforting.

Norway announces the last sale of their gold...17.5 tonnes that were previously flagged in their last sale announcement in late Jan. Just more sentiment turning news that will not affect the amount of gold in the market. Expect more European Central Bank murmurs. The sellers aren't the issue, in my opinion. Let us see how quick the Asian Central Banks move to get out of paper into metals especially if given a gift by France or Germany. Reserve diversification.

The global shopping basket or the CRB Index, has fallen from 283 to today's 263( about 10%) in a fortnight. The AMEX Gold Bugs Index (HUI) has fallen from 241 to 193 or about 20% in the same period. I suspect there are a few metals stocks that have been crucified the past few weeks that will prove to be very timely and rewarding speculations for the smart ones (just my humble opinion - not meant as advice). We'll see how it plays out.

More later if I can get back to the keyboard...

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position in gold and silver

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