Gold $392 Silver $5.78 Wednesday June 9, 3am Sydney
G'day. The past 48 hours has seen a small lift in silver prices and a pretty flat old gold price, give or take a buck or two. The last two paragraphs may enlighten you as to my absence yesterday. Apologies. Metal equities appear to lead the metal lately, and we have seen a jump from 189 to 198 since the open on Friday, although we have given a couple of points back this morning on a slightly weaker gold price. The dollar is still struggling, despite the jawboning of everyone and anyone. Sir Alan is painting a very rosy picture of everything financial, yet we see little to no reaction from the market.
Gold is a little pressured after Greenspan's blurb and trading around the $392 level. Still see good support around the $388 level and the $400 level is proving a tough nut to crack. The currencies are very volatile and as such will continue to impact the market. Watch the Yen, more so than the Euro, I think. With India still importing gold comfortably, we should expect continued strong physical demand globally. I note that Middle East centers such as Dubai have had increases of sales and imports of gold (jewelry, bars and coins) in multiples of what had been occurring the past few years. This is very interesting when compared to many articles telling us all of a general decline in physical gold purchases across the globe. My physical dealers have never been busier and metal is literally walking out of their premises. Hmmm.... Something has driven these buyers to gold and one must wonder what the next "Wake-up" call to other investors will be. Glaringly obvious inflation is my best guess, although it seems that no one is very concerned when one listens to the "Official Fed line" or the mainstream media.
Silver is also off some and trading in high 70's. Maybe a test of $5.65 again to the downside is in the offing, although I'm pretty comfy being long around here (not advice). The risk-reward is skewed in that direction in my opinion (always with appropriate stoppies in place). A metal that is both industrial and monetary should behave somewhat differently to metals of either category, especially with the current flood of "liquidity". I think the downside is very limited but am taking a very short term trading view at present for whatever it's worth.
I see that Sir Alan has said that he will "do whatever is necessary" to fix whatever he thinks is a problem. That is nice to know but apart from spewing out more dollars, I contend that he is out of bullets. M3 growth the past couple months is out of control. Inflation is now a big and obvious issue that all are seeing in day to day living. Oil prices... he can't do a cracker about. Interest rate rises will kill the consumer, the property bubble and the mortgage payer. Deficits tie up fiscal policy hands (unless the rest of the world agrees to accept more I.O. U.'s.).... In a tight spot? Too bloody right!
The hockey was sensational. A pity there had to be a loser as both teams deserved the trophy. I was not surprised to see the Belmont Stakes run and won by a horse that wasn't supposed to. I still think Smarty Jones was a great media beat-up, no doubt a pretty good horse, but no Secretariat. That's racing, especially over a mile and a half.
The Queensland Oaks was run here on Saturday. A big Group One race over the same distance as the Belmont, but only for 3 year old Fillies(girls). As a breeder of thoroughbreds, it is a very important race because the winner automatically becomes a very valuable mare for breeding purposes. I didn't have a horse in it so wasn't overly interested. I did note, though, as they jumped from the gates that there was a familiar name in the field. I checked the form guide and was stunned that one of the runners was a ¾ sister to my best-bred mare. She has retired from racing and is now in foal. She is from the direct family of Tom Rolfe (Belmont winner 1969) and was a first foal. I only buy girls as there is some optionality about them, compared to the boys. Slow boys are gelded and then dog food. Slow girls that are well bred produce more horses. The optionality I mentioned is that even owning a slow female, she may have very fast brothers and sisters which, should they win a big race, massively increases the value of the slow mare. It's all about the blood. For the uninitiated, a ¾ sister is out of the same mother but the two stallions are father (Sir Tristram, now deceased) and his son (Zabeel). These two stallions are 2 of the 3 most successful to stand in the Southern Hemisphere.... Ever. We now had a horse to cheer for .. (we don't say root down here, it means something VERY different).
She won, in race record time, and faster than the colts ran the Belmont trip!!!! She has now been invited across to the Hollywood Oaks in the U.S., in a couple of months. Her name is Vouvray. Anyway, the only thing close to owning an Oaks winner, is owning her sister. A few bottles of bubbles were cracked for sure. What a surprise from out of left field!!! Plain good luck, nothing else.
Sorry about the horse stuff for those who don't give a toss, but I got a heap of enquiries about that Aussie horse in England, so I guess there are a bunch of Minyans out there who have some serious interest in the ponies.....
Enjoy the rest of the day.....
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