Thursday, September 16, 2010
Gold This Morning: On the Outside Looking in --Jon
Overnight turnover was again robustly active particularly after 0430 EDT if that has any significance. GSR has eased to ~61.50 and has been firm enough for the past weeks to confirm that this is more than a test. Open interest on COMEX gold on Tuesday rose ~2.8%. This is new money above and beyond any short covering component which is neutral in open interest terms. Perusing the morning headlines typically calling this a 'buying panic' or demand for 'wealth protection'one should find comfort that we haven't even hit the 'wall of worry' stage yet and even that old gasbag Gartman chipped in this morning that gold 'will continue to rise' after his uncountable u-turn predictions over the past year. We've discussed enough times here that gold is essentially a stable currency whether you measure it how many ounces it takes to buy a barrel of oil, a new suit, a new house, a car, etc. I suspect that much of the hysterical attempts by career bureaucrats, who never had to meet a bottom-line (ahem), at currency manipulation, abundantly apparent in the past weeks by Japan, Switzerland, and others whom you know are out there, are trying to begger their neighbors and this is just beginning to sink in to the psyches of many conditioned to view gold as archaic and pagan. I get concerned about a market top driven by greed but not as now when a lot of people are becoming fearful about the value of their local currency manipulated by the aforementioned bureaucrats. Stay the course and challenge your metals analysts to crunch the miner's numbers...higher prices are essentially higher margins.