Gold $404 Silver $6.70 Wednesday 18th August, 9.30pm Sydney
G'day. Apologies regarding yesterday's absence as I was out of the office, and from what I can see, didn't miss all that much. The CPI was a ho-hum event for those that have any faith that the data released in any way reflects reality. I do not. Even using these deceptively low 3% CPI rates as a given, negative interest rates apply. People are being severely penalized for saving and rewarded for borrowing. Inflation is good for borrowers and if people believe that there is no inflation, then they should ask people on defined benefit pensions or self funded retirees what's going on in the real world of money.
Gold bounced around the $403 level for most of the session although late in the session a few bids took us up to $405 where some sellers in size were noted. The $406 level is gonna be a tough nut to crack, initially, and we should keep an eye on the currencies and base metals for clues.
I read a report on Indian gold imports increases the past quarter. HUGE. Very, very bullish and provides evidence that the physical market is hoovering all dips.
The metal equities seem to have a little life in them still, although it should be noted that the volumes in many issues are very light. Most all that I closely track only traded about 60-80% of the last 20day average volumes(which are already very light). The silver equities still appear to be taking little direction from the underlying metal moves on a given day.
So looking at today, I 'spose we will be pretty quiet in metals with an expected tight trading range of $402-406 and silver $6.63-75. Oil could throw a spanner in the works as could any of a number of other external issues, especially jawboning by pollies and central bankers. Employment numbers tomorrow may keep us very quiet and tight.
I have some expectations that metal shares are building for a break to the upside should gold maintain the $400plus handle. The Amex Gold Bugs Index (HUI) at 202 is still a hurdle to overcome in the near term.
How good is it to see the U.S. Basketball team finally lose a game. I guess the media gave them heaps?
Back a little later in the day...
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