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The old 'Gold Main thread' seems to have dissapered off the ASX side, so I will post any thoughts and charts here now.
IMO there is the possiility of a reversal in the near term, with a sell off to 690-700 area before Gold can resume north bound flight.
Watching for a reversal pattern on the daily.
arco
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yeh looking overbought on the CMO and is positioned at the 261 extension tho not giving a turn signal yet.
and if it retraces to the 161 then thats 685.42
Last edited by peat; 12-09-2007 at 07:05 PM.
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Gold Gains, Extending Rally to 27-Year High, Amid Strike Threat
By Claudia Carpenter
Oct. 1 (Bloomberg) -- Gold gained in London, extending a rally to a 27-year high, on speculation a strike in Peru will disrupt supplies at a time of increased demand. Silver fell.
At least 38 mining unions decided to begin a national strike on Nov. 5, Mining Federation spokesman Cirilo Yarihuaman said Sept. 28. Newmont Mining Corp.'s Yanacocha mine in Peru was the biggest gold mine last year, according to London-based researcher GFMS Ltd. Gold has climbed 17 percent this year as investors sought an alternative to a declining dollar.
``The possibility of a strike in Peru is bullish news because Peru is a significant miner,'' said David Thurtell, an analyst at BNP Paribas SA in London. ``Mine production has been struggling for some years.''
Gold for immediate delivery gained 92 cents to $744.52 an ounce at 12:33 p.m. in London after earlier rising to $746.79, the highest since Jan. 21, 1980. Silver dropped 3.5 cents to $13.73 an ounce.
Gold has climbed for six consecutive weeks as the dollar dropped to a record against the euro. The dollar traded at $1.4211 at 12:49 p.m. in London after earlier falling to a record low of $1.4282.
To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net
Last Updated: October 1, 2007 07:54 EDT
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From ABN Amro
Economic comment
Golden legacy
Tim Drayson
Robert and a few clients had a private dinner with Alan Greenspan shortly after he retired as Fed Chairman last year. To avoid a scene I was kept well away, but I was allowed to put
forward one question (through Robert) and I asked for his thoughts on gold. He responded
with words to the effect that it only takes a few fanatics to believe in financial Armageddon to drive the price higher. No surprise then that he didn't admit he has helped create the environment for a multi-year bull market. This week has seen gold hit a 28-year high. I first publicly expressed my optimism on gold in the Overnight Report, 'Goldfinger' 25 May 2005, when gold traded at $419 per ounce. I remain bullish even at current levels.
You don't have to believe in an impending financial crisis and the end of fiat money to expect the gold price to rise further (though it helps - Ed). Up to mid-2005, the gold price had tracked fluctuations in the dollar. Then there was a period of decoupling, but the main driver of gold price strength in future is likely to remain dollar weakness. The unwinding of the US current-account deficit has only just begun and a further significant drop in the dollar is required to smooth the adjustment. In addition, US policymakers seem comfortable to use the dollar as a tool to reflate the economy. Gold has reacted positively to the surprise 50bp Fed cut. Some commentators viewed this as the Fed losing their inflation-fighting credibility.
I think there is a danger of this in the future, but it hasn't happened yet. Long-term bond
yields have now reversed their move higher after the Sept 18 FOMC. There is still virtually
no inflation risk premium priced into bonds. When inflation worries return, this could give an
additional lift to gold.
Over the last decade gold has moved higher in tandem with other industrial metals and has
received support from increased investment flows into commodity funds. This makes it
potentially vulnerable to a correction. But there are signs that a decoupling for base metals
might be under-way. In contrast to industrial metals, which our commodities analyst Nick
Moore expects to experience increasing supply growth, gold supply contracted last year and
appears to be falling again in 2007. South Africa has been worst affected: gold mine supply
has slumped 36% since 2000 to its lowest level in 85 years according to the South African
Chamber of Mines. For years, central banks have depressed gold prices (I don't believe this
is a conspiracy), but this could now be changing. Central bank sales appear to running
below those of the central bank gold agreement and there is the possibility that the Asians,
particularly China, might seek to diversify some of their vast foreign exchange reserves into
gold.
Gold should do well under our central forecast for decent global growth and an orderly
decline of the dollar. But there is potential for spectacular gains if the Fed decides to react
more aggressively to falling house prices. This would be compounded if other central banks
resist the dollar's decline. This could lead to a general loss of confidence in central banks
and a desire to reduce holdings of paper currencies. Given the limited supply, gold could
develop into the next speculative mania. (Analyst disclosure: I own physical gold and gold
and silver stocks
For clarity, nothing I say is advice....
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