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Golden Voyage


Gold $404 Silver $6.60 Friday 16th July, 3am Sydney

G'day. That was a non-event, wasn't it? PPI came in way under expectations yet the "core" was bang on. Is anyone else confused? Must be all that "transitory" inflation that just "disappeared" this month. Tomorrow's CPI is just a lottery. I'm going home square tonight(professionally) and not gonna worry about gold till Monday morning, one of my colleagues can swing the bat this time. FYI, in the interest of transparency, I am ALWAYS long gold and silver, even if I erroneously omit to say so on any posts. The day I sell my personal physical gold and silver, and that day will come sometime, everyone in the world will know about it. There will be a time to sell gold and silver and go find better places for my money but it's years off, in my opinion.

The Gold market was rather muted in response. Minyan Neal and I each got it half right, so our beer bet, payable in NYC, rolls forward to tomorrow. Down a bit, up a bit ... whatever. Vacillation justs adds to the confusion and agita. We are stuck near yesterday's close at present, but feels like it may be catching some bids down below $403, as it did yesterday. Silver is very solid at this point and trading around the $6.63 level, where I hear that there is some producer selling interest, emanating from north-eastern Europe. Doesn't appear to have had much effect at this stage of proceedings and it looks like it wants to go higher and test the 6.75 area. $7 isn't far away although it only takes two nasty silver days and we are back below $6, if the past few months are a guide.

Minyan Brian pointed out to me a week or two ago that the $407 level is a big quarterly resistance level that he was monitoring, and gold has certainly struggled there or thereabouts. I love having all these people watching different things and pointing out where THEY see things. Like having a few extra pairs of eyes and ears. I learn stuff here, consolidating ideas and thoughts or through hearing different opinions, just the same as anyone else. We certainly need to clear $410-12 level to put that in the rear vision mirror.

The news of the moment is the announcement that Wheaton River Gold(WHT:AMEX) is planning to spin off its silver assets to form a pure silver company. What a great idea. Maybe some others will follow suit like Apex Silver (SIL:AMEX), BHP Billiton (BHP:NYSE) via their Cannington silver deposit in North Queensland or any of a bunch of large polymetalic producers. I haven't dug real deep or read the fine print as yet and will reserve judgement until more info is available. It certainly would provide another alternative exposure to a sector where choice, and therefore liquidity, is severely restricted.

Interestingly, Silver Standard Resources Inc (SSRI:NASD) is currently trading some 5% off their recent high yet silver keeps making new highs for this move. Maybe they had run too hard in advance? Fair enough. Let's do a quick comparison. On 1 July they were $12.50 with silver at $5.80. Today it is $13.40 and silver at $6.65. The underlying metal has moved more than the "leveraged play" to the price. Something doesn't add up here, in my opinion. Conversely, Pan American Silver (PAAS:NASD) has behaved a little better but is still not displaying the leverage one would expect. They were $13.25 on July 1 and now are about $14.50. There must be an expectation that silver prices will retreat/stabilize if the equities are in fact a leading indicator. Hmmmm, watching closely.

Notwithstanding anything coming from out of the blue, things should be pretty quiet heading into the Comex close and we should have a quiet Asia session before the CPI. If anything, there may be a little more strength in Asia than expected, especially if a weaker Yen is being seriously anticipated. The Philly Fed thingy just gave a nice buying opportunity for the quick ones. What a flighty market this is.

I fly to Wellington in a few hours for a monster "Boys Weekend". There are about 20 of us going across and I believe extra beer has been ordered in for the 3 hour flight across the creek. Included in our mob are a few ex-wallabies including Mark Ella, who many consider the greatest rugby player in history. Another, Owen Finnigan, should be playing in the match except he busted his shoulder and is out for another month. Good timing.

I have had a firm bid for my mare, but they are light a couple of kilos of gold at this stage. Ski Lodge races again in a pretty weak race for $50,000 this Saturday in Sydney. It may be a weak race, but she is no world beater, so I won't be putting my hand in my pocket and backing her. Why should I donate to some bookmaker's kids private school education fund? They don't pay out for 4th place, which she typically runs!!.

Enjoy the rest of your day and hope the CPI does whatever you want it to (in the scheme of things it won't make a lick of difference to where everything is in 3 months time, let alone 3 years)..... manage your time frames....

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position in gold, silver, euro, ssri, paas

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