Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Stuck in the Gate


Gold $418 Silver $7.10 Thursday 26 May, 10pm Sydney

G'day. Gold has been very tightly held since last putting pen to paper and this has been quite fortuitous, given what's been happening on the personal front down here. It never rains, it pours! The impossibly tight $3 range, allowed me a little breathing room on the day-to-day stuff, and, rather unexpectedly, so did the savage reversal in fortunes for some of the metal equities around the traps - and still we're only just nudging 180 on the Amex Gold Bugs Index (HUI). That's still a long way away from the 270 that we were staring at early last year, with a $20 higher gold price.

The open interest numbers indicate the largest short position in gold in the last 4 years- and we're still comfortably above the $400 level. Hmmm. UBS reports that Swiss refineries are running flat-stick at present, basically 24/7. There is no shortage of demand for physical gold, with India leading the way, as usual. I also happily saw that the World Gold Council has woken up to new demand from Mainland China and looking for a 10% increase in consumption. I reckon they're skinny on that call.

Last week I wrote that we are stuck in a range for silver- $6.85-7.25 - but that we'd see good volatility within the range (with reasonable expectations of a imminent break to the upside). Well, seeing both ends of the range a few times in a week or so certainly appears to confirm my contention, and we'll probably see another few nice dips before we explore north of the cap. Many are looking for low-mid $6's but I can't see it myself judging by physical demand. Premiums are as high as I have seen of the real stuff. I note that one prominent bullion bank suggested that the silver price has been going the way of the dollar, recently. ????? I'm sorry, but the dollar has nearly nuthin' to do with silver.

I reckon the Chinese Yuan revaluation talk is just all that- talk. Snow, Greenspan and their minions can yabber on till they're blue in the face! The Chinese will do what they want, when they want to. These guys have been around for a long time and are a very, very patient people. They need physical commodities (including oil), lots of 'em, and they have a massive war-chest of dollars to buy what they need. I see oil is back above $50 and didn't spend much time below there, again. Hong Kong Long may be on the money with his "just buy it below $50" pontification.

The HUI has put in a few good days with some stocks up close to 20% since last week. That all sounds bloody good but there is a big difference between rising 20% from $2.40 and falling 60% from $6! Quick feet will allow some to grab some short term profits, and we all love that, but my deal is "the long haul" for much of my exposures and so it makes 2/5ths of bugger all difference in the grand scheme of things for me. The issue is liquidity, in most stocks. Positions take time to accumulate and if ya want to swing in and out of some of the issues, it's hard to "get set" at the right levels, and very difficult to do it fast, without sending them rocketing or nose-diving. Different horses for different courses!

Speaking of horses, little Maitrise, ran very well in her barrier trial on Tuesday. It was a pity that she missed the kick by 4 lengths, when the barriers opened! We stood in the grandstand with our trainer to watch it all unfold. The gates sprang back and she was left standing. You should've heard the trainer!" She's never done that in 10 jump-outs that she's had at the 'Farm", he said in reference to her regular trackwork at Warwick Farm. Anyway, she picked them up and tacked onto the field after only a 100 yards or so, which was impressive. They entered the top of the home turn and sprinted hard and she was again left 3 or 4 lengths last but she got wound up and went round the turn like a greyhound. She took a run up the rails, went between horses, and beat a couple home. The trainer, John Hawkes, was quite happy as these trials are all about "education" and "she showed plenty of ticker" to make 2 runs in the trial. He reckons she will have learned a lot from it and she will trial again in 2 weeks. Maybe she will jump and go this time and we get a better gauge of her progress. We're in no hurry, remember, and we didn't leave the track disappointed. I got the impression she will be a sprinter rather than a stayer, judging by her action and build. We went and saw her after talking with John awhile, and I was impressed with her size. I hadn't seen her in 5 months and was pleasantly surprised. She is a good deal bigger than her mum and they reckon she still has more to grow. She has a great arse, which is the "motor" of a racehorse, and we can't wait for the next trial.

Anyways, sorry to be so short and sweet, but Mum's heading into hospital for some minor surgery tomorrow, in preparation for some more serious stuff in a week or so. Angiograms and then either balloons or by-passes. Hmmm. If it isn't one, it's the other! Add in a few issues with my kids and it's been a funny couple of days (funny as in weird, not ha-ha"). Life, ya gotta love it.

Enjoy the day...

< Previous
  • 1
Next >
position in gold & silver

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos