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Before The Bell: Got Gold?; Durable Goods Show Stress


Some expect gold to reach record prices in 2008, but durable orders are showing more signs of stress. Futures are higher this morning.

Morning Perspective: Got Gold?

Bloomberg reports analyst are expecting the price of gold to rise to a record in 2008 as investors seek protection from inflation. Forecasts call for the price of gold to average $800 an ounce, compared with $696 last year, according to a Bloomberg estimate. Gold has gained 30% in London this year, the best performance since 1979 when inflation in the U.S exceeded 13% and tensions in the Middle East sent crude oil prices surging to record levels. Read a collection of our best gold content in Did All That's Gold Glitter in 2007?

From the Bull Pen: Plays for gold bulls include the gold ETF (GLD); sell-stops in the near term may be set below the 50 DMA ($78.80). Bulls may also choose the gold miners ETF (GDX); sell-stops below $43.

From the Bear Cave: Bears may look to a laggard in the gold space, Gold Fields (GFI), for a downside play. The company recently preannounced higher costs due to work stoppages related to miner deaths. Near-term buy-stops may be set above $15

Durable Goods Show Stress

WSJ reports orders for durables are showing increasing signs of stress on the U.S. economy. In yesterday's report, the Commerce Department said new orders for durable goods, items that have an average life of at least three years, rose just 0.1% in November from the previous month after falling three consecutive months. With increasing inventories and decreasing shipments of manufactured goods, analysts are concerned with these signs of falling demand and increased dependence on the consumer to hold up the domestic economy. Read Professor Cody Tafel's Calls Of 2007 And Ideas For 2008.

From the Bull Pen: Professor Tafel mentioned plays in the PowerShares Water Resource Portfolio (PHO) and Japanese Yen (FXY) for 2008. Sell-stops may be placed below $21.25 and $85 respectively.

From the Bear Cave: In a slowing economy, bears may see an opportunity in the "bearded financial" General Electric (GE). Bears may enter into a downside play should the stock rally to $38.50; buy-stops set above.

Click on Minyanville's Stocks To Watch for more company-specific ideas.

Quick Check Around the World

Asian trading closed with the Hang Seng -1.70%, Sensex -0.05%, Taiwan +1.00% and Shanghai -0.89%.

A quick check across the pond finds the CAC -0.16%, DAX -0.11%, FTSE -0.25%, ATX -0.16%, Swiss Mkt. +0.60% and Stockholm -0.05%.

A Look At Commodities

Crude oil is higher this morning +0.35 to 96.99. Gold is higher +4.1 to 835.90. Silver is up +0.05 to 14.74, and copper is down -4.75 to 306.00.

The dollar index is down -0.25 to 76.361.

As of 8:50 AM, S&P futures are up by +8.90 points, and Nasdaq futures are higher by 9.00 points.

On the Radar


9:45 Chicago PMI: 53.0 cons
10:00 New Home Sales: 720 k cons.

Click here for the full trading radar.

Happy Friday! Good luck, Minyans!

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No positions in stocks mentioned.

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