Gold $398 Silver $6.25 Tuesday April 27
G'day. We had our first day of the year where the high wasn't 25 Celsius...winter coming, I guess. Gold was nicely supported all day throughout Asia today and silver was also well bid and traded as high as $6.30 pre-Comex open. Very quiet indeed.
The CFTC report shows a large decline in the "big boys" long position which takes some of the weight off the price for the time being. Gold is again pushing back to the $400 level and a close above $404 could bring some joy technically but the $415 level will likely be a challenge in the coming weeks.
The physical buying of the "real market" has illustrated where we can buy with some confidence. Indian premiums are still easily accommodative of imports and I noted that Korea announced it had doubled its imports for Q1 from a year previous, even with gold above $400. Turkey, India and Dubai are all seeing great demand and this price decline below $400 has allowed buyers to load up again. China has not been involved in gold as obviously they have in Platinum recently. Japan has been indifferent to gold via Tocom and seem more interested in the PGM's .
Pretty quiet session all up in the metals compared to last week. The AMEX gold index (HUI) is almost flat for the day and the shares are pretty subdued. Today must be a breather... everyone catching their breath after last week's debacle. May be quiet 'till Beeks delivers the next set of main news. Keep an eye on the currencies as the Yen will be the key, I think. Yen crosses should become more volatile in the currency markets in the next few weeks.
Ever wondered why no one is questioning the Fed?? Not quite on gold/silver but I think worth thinking about....
That article I posted and linked through the Buzz and Banter, penned by Congressman Ron Paul who sits on the Joint Economic committee of Congress, is strangely comforting. I dunno how many congressman there are or what they actually do, but at least there is one guy in the building who knows what real money is and what inflation really is. T'is a pity that in such a powerful body of legislators there appears to be only one "dissenter" or inquisitor, when it comes to current monetary policy in the USA and elsewhere. Where is the debate?
Why is this so? Surely not everyone agrees with the Fed? I suspect Congressman Paul is marginalized as a bit "loopy" or as some sort of "weirdo" because of his beliefs and questions. I understand he is very vocal on defending the Constitution and Individual rights. That must be tough in the current climate of Homeland Security and all that.
Anyways, regarding one's marginalization due to your view or belief, well, that's the price of being contrarian. Happens all the time and always will. It's human nature. That one's soundly reasoned, easily referenced and highly defendable argument is automatically treated with scorn and derision, rather than being clinically examined and debated, hurts for sure, but it shouldn't shake your belief. Being proved wrong - outright - to your own satisfaction, should be the only reason to change your view, as long as you are satisfied with your analysis and process. There is no shame is being wrong, just acknowledge it as soon as you are aware you are wrong and act accordingly.
You grow a thick skin, pretty quickly too.
I've been hunting for someone to please shoot my argument down, logically and to my satisfaction, and then I will be happy to stop working these stupid bloody hours and can get on with loading up the debt levels like everyone else, buying all the stuff I didn't buy in the last few years so that I could have no debt and some savings in real money. It's been nearly 5 years and no one has yet. Sure there's been some good theoretical arguments that are unconvincing at best, and some intellectual standoffs of marginal significance to the issues, and still nobody can prove to me that the current Fiat Currency system won't inevitable fail, as has happened in EVERY instance that this system has been implemented in the history of mankind. That's a good enough precedent for me.
Why do you think school kids never try and answer questions from teachers and are loathe to question anything their teachers say? They don't want to stand out from the crowd and draw any attention to what they do/don't know or open themselves to ridicule by their peers. There aren't many in the markets who are asking the hard questions or have been, especially from the Financial Institution Economists, although someone like Stephen Roach is a notable exception and should be applauded for his resilience and tenacity in the face of some very public examination and commentary on his analysis and conclusions.
I read the other day somewhere that "it is better to be prepared and wrong, than not to be prepared and right".... Don't be afraid to question stuff and if you don't get a satisfactory answer to what you have asked, ask for further explanation. Your antagonist may even learn something when answering your questions.
Just my two bob's worth ... geez..it must've been quiet.. sorry about the rambling...
I noted today that the one of the biggest goldmining companies in Australia, Lihir Gold (LHG:ASX) got slapped around after disappointing the market with increased costs and lower than expected production. They fell 7% to A$1.07. This company certainly has a few problems in different areas of operation and management, in my opinion, but they appear to be treated as lepers compared to some similar North American based companies (not advice). They are a one mine operation that produces upwards of 500k ounces per annum with a 10 year mine life. Hedging policy is an issue for me as is sovereign risk and a few other little personal nitpicks that I always have. They have had a 12 month high of $1.80ish although the stronger Aussie dollar does not help with cost control/reduction. I don't own any personally or professionally but will be having a closer look in the near future as it seems they have been treated a little shabbily compared to their contemporaries. We shall see.
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