Gold is Back and Ready for $1000/oz (Sort Of)

Pic credit: Not One Cent
(and OMG LOLZ btw!!)

For the last few days, I've watched my iGoogle daily gold chart widget climb by the hour, that distinctive pink line crawling ever upward throughout the day, creeping closer to $1000 (or 700EUR as my particular chart is Euro-denominated for some reason). I only caught one instance of the yellow stuff getting bombed in the open market but that's nothing new and didn't surprise me in the least.

When I first noticed gold start to break, I dismissed it as a fluke, which goes to prove just how numb we've gotten to rampant manipulation in the gold market. Suffocation is not an investment strategy unless you're playing for the side of the team that is trying to bury bodies wherever it can find a spare plot of land and some lime.

Remember how I told you JPM and GS are loading up in futures? I wasn't joking.


NEW YORK (MarketWatch) -- Gold futures rose Thursday to six-month highs, with nearby contracts approaching $1,000 an ounce while contracts for next year's delivery topping the psychologically important level, as a weakening dollar and continued fund buying pushed up prices. Gold for December delivery, the most active contract, gained $19.20, or 2%, to $997.70 an ounce on the Comex division of the New York Mercantile Exchange, the highest settlement for the contract since Feb. 23. It rose as high as $999.50 earlier. The October contract rose to $996.30, while futures for April delivery ended at $1,000.20 an ounce. (Updates to correct the December contract closing price.)
$1000 gold? You've got to be kidding me. I was reluctant to commit to $1000 by the end of the year after this summer, but now I'm starting to doubt my initial assumptions.

The playground bullies have taken over gold's sandbox.

If your tin foil hat is strapped on particularly tight, you could also say that perhaps the bullies have run out of ammo and this is all that's left. I won't make such a statement as I am not in a position to postulate either way based on what little I've seen coming for December.

This defies the logic of "new normal" in that the Fed pumped out its most optimistic FOMC statement in months though media outlets are insisting risk aversion + concern that US banks may not be as safe as Tim Geithner seems to believe (no shit!).

Gold futures surged yesterday after risk aversion was witnessed in financial markets which tends to support bullion prices.

Despite of correction taking place in industrial metals silver prices moved up sharply following sharp upmove in Gold prices.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust said holdings stood at 1,061.83 tonnes as of Sept 1, unchanged from the previous business day.

Futures rose in spite of news that global gold jewelry demand fell sharply due to higher price of gold and a recession. India's gold imports in August provisionally slumped to between 12 to 14 tonnes from 98 tonnes in the same month last year as high prices and weak monsoon rains dented demand.

Gold and gold receivables held by euro zone central banks rose by 2 million euros to 232.111 billion euros in the week ending August 28, the European Central Bank said on Tuesday. Net foreign exchange reserves in the Euro system of central banks rose by 0.5 billion euros to 194.6 billion euros ($279.4 billion), the ECB said in its regular weekly consolidated financial statement.

Gold has justified to its characteristic, yesterday there were concerns in U. S. about the banking sector may face problems and most of the banking stocks were sharply down, resulted in bargain buying in Gold despite of weak retail and investment demand.

I smell a rat. A big, fat, regulated-by-the-NY-Fed rat.

Also notable, Hong Kong doesn't trust London as far as they can throw them:

Hong Kong is pulling all its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at the city's airport, in a move that won praise from local traders Thursday.

The facility, industry professionals said, would support Hong Kong's emergence as a Swiss-style trading hub for bullion and would lessen London's status as a key settlement-and-storage center.

"Having a central government-sponsored vault would create a situation where you could conceivably look at Hong Kong as being a hub, where metal could be traded for the region," said Sunil Kashyap, managing director at Scotia Capital in Hong Kong, adding that the facility was the first with official government backing in the region.
Also worth noting, I happened to be watching MSBNC this morning around 2a PDT which means pre-opening bell for the East Coast and actually saw a piece on why it might be a good idea to own gold. On MSNBC!

Ready for Round 2, kids? Because, uh, this may be a tad premature but I think we are well on our way. Here's to hoping you aren't stuck in 30 year Treasurys and shitty Southern California property!

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


W.C. Varones said...

We're there, dude.

"The thing about being a survivalist kook and stockpiling gold, guns, and food is that there's no downside. Even if you're wrong, you've still got gold, guns, and food." - 9/18/2008