[May 5: Closing Precious Metals]
[Jan 30: Starting New Position in Kinross Gold]
In terms of the market - we still need fear - but we're getting there - the move to gold is a good indication. As I stated yesterday that S&P 1300 level is our temporary bottom for now - those big round numbers always act as psychological support. If that breaks, off we go to January and March 2008 lows (1270s). As mentioned, those sucker rallies as we had yesterday afternoon are not be trusted.
As I said yesterday, the Federal Reserve basically left us to our own devices - after that initial silly euphoria wore off, we woke up today to realize all the same problems were there. I truly think with crude sinking (down $5 yesterday pre Fed) they could of drove a short term stake through the heart of some commodities with a 25 basis point raise and strong language about inflation. We got neither. The banks must be bailed out - that's all that matters it appears. Inflation can rage - since it does not show up in government reports.
No position
5 comments:
TM: 2 reasons why gold should remain on radar screen: 1) still in bull market; the move from $1032 to below $900 has been a pull back only to the 40 wk MA; 2) real interest rates remain negative and should remain negative a long time.
On an anecdotal point here, I don't think the current bounce will lead to new highs in gold and I view this as more of a rotation of the hot money for now---just my feeling.
Thanks Guy. This is why I am hesitating on buying - maybe 1/3rd of the move is already in.
What is your target on gold if you do not believe its going to $1032?
$975? $950?
You mean we actually have *do* something about inflation? I thought just talking about how we're going to fight it was enough?
The first part of fighting a problem is stopping the denial Michael. We are still in the denial stage :) We haven't even gone to steps 2-3-4.
Its supposed to be a politically independent body - short of oil $250 perhaps no raises until post election.
Even at $250 will they say CPI 3%?
:)
Personally I hope CPI goes negative soon - it will have to be that loony for masses to begin to question it. Darn sheep.
So I guess if oil continues its march we can watch the world (ex China who is willing to pay any price for anything) grind to a halt - and scratch our head why we have positive GDP :)
I don't really put a target on these things; but I guess $992 seems like a reasonable target; my interest in gold here was a bounce off the 40 week moving average while real interest rates are negative is a high reward/ low risk trade.
The trade could turn out bigger than this if the Dollar Index continues lower and in particular trades below $70.7. Then we would likely see an acceleration of gold higher and the dollar lower.
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