As long as this suspicion is out there that a "brutal correction" awaits, it'll wait... I think we're seeing a brutal buying spree, but still only 1% or so of investors likely own gold or silver (yet).
I'll wait for the shoe shine guy and Time Magazine cover until I sell.
Heavy speculative buying fuelled by inflation fears and geopolitical tensions propelled gold and silver to their highest for 25 years on Thursday, while platinum soared to a record peak.
Analysts said the metals were overbought and saw a chance of brutal price falls, but bullish sentiment was underpinning the market.
"Commodities are desperately fashionable at the moment. Just every piece of news is viewed bullish," said Stephen Briggs, economist at SG Corporate and Investment Banking.
Selling was seen, but the mood sweeping through the commodity sector -- several base metals also hit record highs -- meant this was swept aside by fund buying, traders said.
"There is a great fear that at some point there will be a dramatic correction. And the higher they go, the more dramatic it's going to be," Briggs added.
Gold has risen more than 37 percent this year and by 63 percent since the start of 2005 as investors diversify into precious metals as a hedge against global tensions, including those over U.S.-Iran relations, high oil prices and dollar instability.
The metal took two years to move by $100 to reach $500 an ounce in November 2005 and another five months to hit $600, but sprinted to surpass $700 in less than a month.
Gold hit a record high of $850 in January 1980.
"Growing momentum from investors and speculators looks set to extend its rally despite short-term overbought signals on the charts. Resistance is now expected at $740, $765 and $800 but gold could go all the way to its all-time high of $850 before correcting," said James Moore, analyst at TheBullionDesk.com.
Investors looked at currency and oil markets for fresh leads and watched the stand-off between Iran and the West over Tehran's nuclear ambitions. Gold is seen as a hedge against inflation and political uncertainty.
Oil climbed towards last month's record high of $75.35 a barrel as dealers fretted that strong U.S. gasoline demand and outages at two refineries may quickly drain rising inventories.
May 11, 2006
Gold's up. Silver's up. Oil's up. Dollar's down. Any Questions?
Subscribe to:
Post Comments (Atom)
22 comments:
The Time cover can't be that far off. I think it will go past the cover on the fed being so far behind the curve on inflation. Plus, High energy costs make it very expensive to mine metals.
Real consumer inflation is triple digit. Do you work for the American Propaganda Machine Mc Bride?
Right, this is for national security.
USA Today: NSA building massive database of phone records
Thursday, May 11, 2006; Posted: 10:35 a.m. EDT (14:35 GMT)
Inflation is not low if you truly examine the excluded components of CPI and PPI.
The only reason that corporate profits continue to grow is because the Fed has done a good job of keeping the public snowed on the whole story.
This is a debt driven economic expansion and not a healthy organic expansion.
anyone get word of a Time cover on gold post it immediately and urgently - I'll hit the sell button that second! Until then, sure am enjoying this ride!
It's a total joke that oil and gas are up--they'll pick any reason to keep the bull market going. 15K of gas off line for a week is, to paraphrase an oil analyst, less than one third of a tanker haul or something like that. Though gas demand may have been up since last week, it was actually 0.1% less that the same week last year. Like Buffet says, fundamentals start the run, and speculation furthers it. Only a recession in the US will bring prices down--other than that, this commodity market will run until we're bursting at the seams with crude and finished products. There's already no place to put all the natural gas they have, and prices are still much much higher...
This is a carbon copy of 1970, 1980, 1990.
Thrice fooled once shy.
Sorry, I meant BS that oil and gas are up almost 4% and 7% in two days...and that 15K barrels/day off line for a week
By keeping prices high the government deflates its debit, generates more taxes, grows its GDP, issues debit to its people keeping unemployment down, and perpetuates voluntary slavery and the socialist welfare state. The people in control are Wooed by huge paychecks, fancy houses, and friends that only power can buy.
Time Magazine
Panning For A Golden Hedge
By DAN KADLEC
ALSO IN THIS ISSUE
May 8, 2006
Table of Contents »
Photos and Graphics »
Your Time
The Pick Of The Podcasts
Your Drug Was Discontinued
May 8, 2006 Gold enthusiasts haven't had a bull market to crow about in more than two decades, but we're in one now. The price of an ounce has zipped past $600 for the first time in 25 years. Gold-mining stocks have doubled since early 2003, and most pros expect more gains--for mining stocks and the metal itself. Conditions certainly are right. Booming economies globally and an emerging middle class in Asia, where gold jewelry is especially popular, will triple demand over the next few years, predicts the World Gold Council. Mining companies won't be able to keep pace because they failed to invest sufficiently in...
You are right about the shoeshine guy
I sold SIRI in December of 2004 (at $8) when a cab driver in Las Vegas told me he was buying SIRI!!. . .
whew - didn't make the cover... who did?
Time to ride the DOW straight into the ground, my vehicle of choice is BEARX, time for hyper punishment.
Start thinking in terms of the dollar!! Our Federal policy is to devalue it by at least 20%. That means that we just told China and the whole world that we are going to steal 20% of their dollar wealth, yours too!! (Schumer is the backup) I am a little pissed off about it but Gold is preserving some of my wealth. Can the Fed control a 20% slide in the dollar? We shall see. Will you be surprised when it takes 20% more dollars to the same quantity of oil and gold? Not me. Got Gold?
Tom
20% my ass Gold started at $250 and now its $700+
Isn’t that closer to 200% or 300%
What about oil moving from $25 to $75
What % is that Einstein?
anon - just bought (NEW POSITION) $5000 of BEARX
Had it on my radar and took a small bite for fun, as I research stocks to actually short or puts to take
That's the smarter people outside of the US buying. Gold and the dollar are no longer in an inverse relationship because there is a lot less gold in the world then dollars. That why a little goes a long way to protect your dollar portfolio. The price of insurance is going up, up, up. Now go and be smart and buy some gold. If you were smart you would have bought some last year and we wouldn’t be debating Gold 101.
Bake McBride
said...
"Most commodities are now trading at around 2-3 times their cost of production."
You don't know shit about mining.
When the price goes up, they don't mine the easy stuff, they start digging out the hard to get stuff whilst it's economically viable to do so. Thus increasing the operational time of the mine.
This has the effect of a loss in production, (but the higher prices compensate) and leads to a market shortage, which in turn drives prices higher.
Also if energy costs have tripled (and they have) their production costs increase accordingly.
Your are Excellent. And so is your site! Keep up the good work. Bookmarked.
»
Greets to the webmaster of this wonderful site. Keep working. Thank you.
»
Great site loved it alot, will come back and visit again.
»
Hmm I love the idea behind this website, very unique.
»
Post a Comment