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Gold production is moving from a small 2005 surplus to negative supply for 2006. The world’s largest gold mines in Indonesia and Peru are expecting to produce less bullion per planned forecasts. Our gold and silver charts are all pointing to a positive breakout for the metals and stocks. Silver has been particularly strong with a major silver stock breaking through new upper resistance last week as silver prices rose over $13.
We are fed a constant stream of news regarding the global central banks buying and selling gold. Several nations issued statements they intend to add more to existing gold reserves. We reported last week those central banks authorized by agreement to sell more gold are either selling tiny bits or stalling. The Central Bank of Germany holds the world’s second largest bullion bank supply according to published records. Observers and politicians were wondering out loud last week about selling some German gold to pay down debt. This was met with a loud no from those in charge.
For awhile it seemed gold had decoupled from the U. S. Dollar and we reported this more than once. However, in the last 60 days gold has again found its position trading inversely with the dollar. United States interest rates paused last month as we had forecast. With the election in November, the party in charge will move forward with a full court press doing everything possible to ship-shape news perfecting appearances all is well. This could include more mystical jobs numbers, interest rate cuts before the election, spinning-up positive Middle Eastern War news, and spending tax-payers money more freely proclaiming positive administration news for re-election. The Detroit News reported today several incumbent and new politicians are distancing themselves from the President and some of his policies. We are expecting politically induced market distractions this fall that bode well for precious metals.
In reality, we have stagflation with the worst of both worlds; higher inflation in food and energy and deflation in pricing power. Sales for corporations and the retail sector appear weaker. August pumped retail a little which we attribute to back-to-school-spending for kids’ needs. A recession will be officially apparent in late 2006 or early 2007 as genuine numbers can no longer be hidden. The American housing industry is now in a free-fall.
The dollar will become weaker and interest rates lowered to contain deflation. Credit is advanced in every way possible to keep the game afloat. Pushing on a loose easy credit string never works when consumers are tapped out and refuse to buy. Since the enormous bond market (70 times larger than stock markets) will immediately react to this easy money, there is big trouble ahead in bonds.
From May to current date, dollar formed a diamond chart pattern which is very negative. N ote the lower closings on the last two weekly bars in this September on U. S. Dollar Weekly Futures Chart. When 83.10 is broken we sink to 80.00.
That is our last chance main support before serious trouble in this market. |
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IP卡
狗仔卡
發表於 2006-9-11 13:05:11
提升卡
置頂卡
沉默卡
喧囂卡
變色卡
顯身卡
發表於 2006-9-11 13:14:12
樓主
