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Before The Bell: Golden Ticket and a Recession


Gold headed higher as economists say we may be in a bad recession.


Morning Perspective: Gold Rush!

Bloomberg reports Fortis and VM Group said gold may rise to as high as $1,100 an ounce in the next month and platinum to $2,500 an ounce because of the unreliable electricity systems for the mines in South Africa. The analysts said electricity demand is growing fast and the miners will likely see more shutdowns because, "in crude terms, the system is coming apart at the seams." In January, South Africa's state power utility Eskom Holding shut down the miners for five days because of a near collapse.
For more on gold, read Professor Lance Lewis' Minyan Mailbag: Gold Rush!

From the Bull Pen: Professor Lewis said the gold miners are trading as if gold is still at $600. Bulls can play the upside in the gold miners ETF (GDX); sell-stops below recent lows ($54.50).

From the Bear Cave: Bears see a better opportunity in playing the downside in the base metals. Southern Copper (PCU) may be an option; buy-stops above $115.

Economists Say Recession

In the latest WSJ survey conducted March 7-11, 36 out of 51 respondents, or more than 70%, said the U.S. economy is in a recession. Adding to worries was last Friday's jobs report where the Labor Department said the U.S. lost 63,000 jobs in February. Further, just yesterday, the Commerce Department said retail sales fell 0.6% where most had expected a gain of 0.2%. Half the economists surveyed said the recession this year could be worse than the downturns in 2001 and 1990. For more, read Mr. Practical's The Great Moderation Of Debt.

From the Bull Pen: Bulls see an upside play on the Japanese Yen and can use the Yen ETF (FXY); sell-stops in the near-term below $95.

From the Bear Cave: Bears see a downside opportunity in General Electric (GE) especially with the stock sitting at its 50-DMA. Buy-stops can be set above $36.

For more ideas, see Minyanville's Spotlight Stocks.

Quick Check Around the World

Asian trading closed with the Hang Seng -0.29%, Nikkei -1.54%, Sensex +2.63%, Taiwan -0.60% and Shanghai -0.22%.

European bourses are mostly green as we find the CAC +1.11%, DAX +0.90%, FTSE +0.66%

As of 8:30 AM EST, S&P futures are up +8.20 points to 1323 and Nasdaq futures are higher +16 points to 1773.

A Look At Commodities

Commodities are higher. Crude oil is lower -0.43 to 109.89. Gold is higher +2.60 to 996.40. Silver is up +0.428 to 20.339 and copper is higher +4.75 to 388.75.

The dollar index is up +0.032 to 72.104.

On the Radar

CPI (m/m): 0.0 vs. 0.3% cons
Core CPI (m/m): 0.0 vs. 0.2% cons
CPI (y/y): 4.0 vs. 4.3% cons
Core CPI (y/y): 2.3% vs. 2.4% cons

10:00 Business Inventories: 0.4% cons

TGI Friday! Good luck and have a great day!


No positions in stocks mentioned.

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