Wade & Dan, et al,
There wasn't anything of a major nature concerning PMs in Barron's either of the last two weeks. However, gold was mentioned favorably in the Up and Down Wall Street column last week and stimulated an interesting letter to the Editor. The writer states "Let's face it, gold ain't cheap. ------
I always thought that, if inflation were high, or massive war and political unrest were at hand, gold would be a haven. We have political unrest in the Middle East, but that isn't new, and not on the scale of past wars. Also, inflation is very low, even with the spike in oil. Gold should probably be priced at $438 a pound, instead of an ounce. The recent gold-price spike is due to perception, just like Google's stock price. In Gulf War I, gold peaked at $400 for a short time. It took more than a decade to bring it back to current levels."
I find it amazing that the writer is apparently unaware of the falling value of the dollar. He also fails to recognize the significance of the last sentense. I don't know where or when it is going to peak but, if it takes a decade to fall back to current levels, I wouldn't be a hurry to think about selling.
There was also a interesting article quoting Charles Maxwell as suggesting that the shortage of oil is real and that it will rise in price.
Lease rate patterns over the past two weeks haven't suggested anything to me. The significant moves in the POG have been very short-term and the lease rate data if have access to is the daily close in London.
The GMI/POG ratio for the past week:
On 11/18, the Barron's GMI was 702.07, up from the week's before last 684.26. With the POG up significantly at 445.56(11/19), the ratio essentially unchanged at 1.58.
On 11/24, the Barron's GMI was 708.59, up from the week's before last 702.07. With the POG up at 448.60(11/26), the ratio essentially unchanged at 1.58.
The ratio continues in the middle range where it doesn't suggest a rise or drop in the POG. It is clear that there is very little speculation behind the price of stocks at this time.
The ratio a year ago was 1.81, indicating a higher level of speculation at that time.
Larry |
