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Archive for 11/08/2010
That was fast
11/08/2010 by Philinje.
Looks like the markets voted with a big vote of no confidence.
The Euro took a big slide, sending Euro gold almost to a higher high. That could be more support for a new uptrend in gold. Silver is not doing well, because of its commodity-like nature, but dollar gold is holding up ok because of the rally in Euro gold.
Many analysts are noting that the rising bearish wedge in equities has been broken to the downside. We could get a bounce after today but chances are a major new downtrend has started in equities.
Gold might be ok for a while, and might even rally. Tough to say just yet. In dollar terms it’s hovering around the $1200 mark. I still think there is potential danger lurking toward end of this month. But this definite move down by equities could change the picture.
More soon.
Posted in Gold | Print | No Comments »
QE2, sort of
11/08/2010 by Philinje.
A bunch of bouncing yesterday from the FOMC policy statement. The dollar was charging up prior to the announcement, possibly because traders anticipated a new start to Quantitative Easing would rip the floor out from under the dollar.
The Fed decided to keep QE limited for now. I read some smart commentary a few days ago that gave compelling reasons why the Fed would not launch a new round of full-on QE at this time. This would give the rally in equities a little more room, and bonds bounced even higher on the news.
The end result is mixed. There were tepid bounces in gold and the Euro, but the Yen pairs look slightly worse off, meaning risk aversion is still hanging around, if not a bit stronger. The dollar dropped then bounced up. Equities got bought, again on low volume, but could not close up for the day.
The next few days will be interesting. Either buyers come rushing back in to push equities higher, or a general lack of confidence will gain strength. With gold we may have seen the top that was expected Monday-Tuesday, and now down to what may be a higher low. Or it could catch a reflation bid along with equities, if buyers come back in.
The one thing that seems likely is the dollar has started a bounce and bonds are still strong. On the whole, that doesn’t sound gold-positive in the short term. But keep in mind that once bonds start to drop, gold could move up in a hurry.
Here is an interesting piece on JP Morgan in the mainstream press. Maybe the show is ending for these guys, if public opinion really starts to notice the shenanigans going on at the expense of Main Street.
http://www.huffingtonpost.com/janet-tavakoli/jpmorgans-losses-from-ind_b_676042.html
Posted in Gold | Print | No Comments »