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Sir Alan Speaks...


Gold $399 Silver $6.20 Thursday 9 September, 3am Sydney

G'day. And so Sir Alan speaks and the markets react. Why? He said nothing we didn't already know or that hadn't already been said by MacTeer or others. The currency markets decided that the dollar was overvalued in a matter of minutes. Metals benefited somewhat although silver requires some serious attention to rectify the damage done in the past week or so. Ho-hum.

Interesting how Sir Al keeps mentioning underfunded pension liabilities and social security as a big issue going forward. Just setting the table, in my opinion.

Gold is back as a dollar game at present and I suspect we will see more of these jittery moves as we head into the election. Gold appears to hold and I continue to see gold under $400 as a great buying opportunity for physical gold and am adding to my personal horde. The downside is maybe 10% at worst in my opinion, and the upside is infinite. I prefer those kind of odds to a tech company with a PE of 100! Gold continues its trend of stable to higher throughout Asia then knocked lower in NY. Maybe there is a trade to explore, selling gold late in Asia and then buying mid NY? Just thinking aloud, and not advice.

That silver is down about 10% in a week is a little bizarre in the scheme of things. Has the physical supply/demand deficit been magically balanced and an instantaneous surplus of supply coming on stream? I haven't heard of a new source of supply entering the market in the last week that could affect the market so severely. It's not the dollar, so I can only deduce that this is a paper silver move and that this should be resolved in due course as supply/demand fundamentals take charge. I think we may see $5.85-90 on a bad day but am happy to accumulate between $6-6.20ish. One of my bullion bankers tells me they are seeing very strong physical demand out of India for silver after this latest selloff below the $6.20 level. This is good news for bullish silver players. Silver hasn't followed gold up much at this stage today. Catch up coming, in my opinion.

The Amex Gold Bugs Index (HUI) is clawing back to the 200 level and it has been resilient in the face of the latest weakness. Worst performers lately are Coeur D'Alene Mines (CDE:NYSE) and Golden Star Resources (GSS:AMEX) (as usual) and I note that Hecla (HL:NYSE) has been one of the better performers this past week, as expected. Expect resistance at 212-5 and support at 190-192ish.

I dunno what's gonna be the next "trigger" for the next move in metals or currency. All I know is that fundamentally there is no reason for dollar strength at this stage. The economy is sluggish at best, even with record low interest rates and liquidity. Inflation is a real issue and a real occurrence, whether or not you chose to believe the numbers as published or the effect on the back pocket. Real assets / tangibles appear the most risk averse way forward from where I sit.

Enjoy the rest of the day.....

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position in gold, silver, gss, hl

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