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Gentle Please


Gold $407 Silver $6.83 Thursday 19th August, 10.30pm Sydney

G'day. Back on deck but not even close to 100% fit, so be gentle please. Seems as soon as I left the office this morning gold caught some bids and silver went for a little run. I have only heard that the fund buying was prevalent and that there was stern defense of the $405 level in spot gold. Crude above $47 isn't signalling anything positive for the global economy and some further life in base metals is becoming obvious, which appears contradictory on the face of it. How good is that lead stuff?

I got a few mails at home asking whether I thought that this was "break-out" time. I am still not 100% convinced until I see a couple of closes above $406. I suspect we may see another push back to $398-402 but we know that 15 minutes is a long time these days, so whatever we say now could well be moot a few minutes after 8.30am.

Silver is still vulnerable to a pullback to $6.35 but looking pretty comfy above $6.60 recently. Similar to gold, I wanna see a few closes above $6.75 before getting too excited.

The Amex Gold Bugs Index (HUI) caught some bids as well and we are pushing the 200 level again. Resistance has been at 202-05 and expect some again at similar levels. The shares have a good feel to them at present and I expect further strength as they draw attention to themselves by their positive price action. Golden Star (GSS:NYSE) and Hecla (HL:NYSE) were the best performers on the day and, in my opinion, these two should be in the top handful of performers for the sector in the coming months. NOT ADVICE.

The Yen looks strong versus the dollar although it made little difference to gold yesterday. There are some disturbing signs of stress appearing in the dollar and it is understood there are central banks sniffing around the Euro at 1.2380 level just in case the dollar cops a few uppercuts. I suspect we will see a 1.25 before long. Again.

So what for today... gold $403-408 and silver $6.75-90... depending on the numbers and currency and oil and...... who knows???

Mens Basketball - Halftime AUSTRALIA 51 - USA 47 .... I backed the Aussies at 10-1 but think we'll get rissoled in the end by about 8 points.

Back later ......

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position in gold, silver, gss, hl, euro, yen

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