Switzerland reiterated yesterday that it still plans to sell its excess
gold reserves. Whether or not the populace goes for it is doubtful, so nobody is paying much
attention to this. Remember how intent on selling gold the IMF has been, well now they have a
different plan. The governing Interim Committee will discuss a proposal Sep 26 to mark 10
million ounces of gold to the market, as opposed to its current book value of $47 per ounce,
thereby "raising" $1.1 billion as collateral to fund debt relief. Hhmmmmmm...that seems
awfully "creative" to me, but at least they seem to now have a vested interest in gold prices
moving higher. The CRB has been rallying lately (grains, energies, etc.) and gold hasn't really
moved higher, but is it now starting to show a pulse? Volume, open interest, and prices seem
to be inching higher, and lease rates have increased, is this somewhat bullish? Stochastic
indicators are headed higher. If you are a bull then you realize by now that picking a bottom
successfully may take several swings at the plate in this down-trending market. Prices having
been slowing trending higher the last two weeks, but the longer-term trend is down, and if you
want to buy, I say do so only on strength, on a close somewhere above the 262 area. Of
course call options are another way to play a market such as this, but realize that a
direction-less market such as we have seen in the last couple of months will be a disaster for
long options.
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