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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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From: loantech9/4/2007 4:44:03 PM
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From Debbie Lewis today:
Graeme Currie and associated mining analysts at Canaccord
have asked the question—What To Do After The
Labour Day Long Weekend? (Particularly in light of the
sharp sell off over the past six weeks).
They are keying on “market commentary more focused
on the potential for the Federal Reserve in the US to lower
interest rates further, we ask the question: how this could
impact gold?...Our perspective—should rates be lowered
further in the US-would be expectations for further declines
in the US dollar.”
Which gets us to the US Dollar Index and the chart that
Currie and Associates use, which measures that currencies
performance against a basket of foreign currencies.
They note “how precariously close the index is to the 80.0
point level and over the long term this level could be considered
a key technical level.”
He continues, “From this point forward, we will take a
“what if” approach should the DXY drop below the 80.0
level. The impact of such a decline could serve as a catalyst
for gold to indicate a new bull phase.”
We note that gold stocks over most of this year have
lost their luster while everyone in the good times was
chasing the commodity of the day whether it was molybdenum,
tungsten or you-name-it and so while gold prices
haven’t really been hurt at all, gold stocks lost 20% to 40%
of their value. It’s also been hit with more expensive costs
of operation than expected on many operating mines and
higher than expected costs on many developing mines.
But back to Currie’s look on the charts and he suggests
that “gold is under accumulation and any further pressure
on the US dollar could create a breakout scenario for gold.
In our opinion, the key levels to monitor appear to be the
US$685 mark followed by the May 2006 high of US$725/
oz.”
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