Weekly Update
October 9, 2006
Gold traded down this week $40 while silver traded down $ .57 There are
reports that the European Banks may have sold 100 tons more than reported of
bullion from reserves in a rush to meet a quota deadline on September 26 but
had done so by selling through forward contracts that disguised the effect.
This may have added to the huge drop in September from $US640 per troy ounce
in early September to $US559
While stock markets continue to climbed oil dipped below $60 a barrel at
one point.
But with a strong dollar due to drop in the unemployment numbers the
precious metals market will remain weak. Jon Nadler of Kitco said" There
remains a distinct smell of fear in the air over the bullion pits at the
moment." Our alert remains buy.
October 2, 2006
September was a strong month in the stock market and weak for the
precious metals market. With the Federal Reserves decision to leave interest
rate unchanged this month, investors are now starting to believe, although
the economy is slowing, it is not necessarily headed for a recession.
"Everybody was bullish on gold in May and June," at about the same time that
the price started to moderate, says John Bollinger, head of Bollinger
Capital and inventor of Bollinger Bands, a technical-analysis tool. "Under
those circumstances, markets have difficulty in rallying because there
simply isn't new money [on the sidelines ready] to jump into the market."
The Market will be looking for rising oil prices, a declining dollar and a
infuriating geopolitics before investors commit to the market to the same
level they did in the second quarter of this year. Our alert continues to be
sell.