Trading Thoughts...
It's been a tough week and a tough tape.
Up +3-4-5%... down -3,4,5%.
Gold stocks are flittering at, and around key technical
support here. But... the underlying fundamentals are
going parabolic!
-- US dumping billions into a bottomless, derivatives
black hole, formerly known as -- the US banking system.
-- Bernanke standing ready to print more money & buy long
dated Treasuries to prop up housing market.
-- Bank of England's Mervyn King says: "it is impossible to say
how much capital will be required to shore up the British
banking system."
-- Japan to buy Nikkei stocks and monetize anything and
everything, including the kitchen sink.
-- Obama putting a $250 Billion Dollar "place holder"
into the budget for further bank bailouts.
-- The FDIC's Shelia Bair just announces 50% increase in
"troubled banks."
-- Eastern Europe collapsing into bankruptcy and social chaos.
And what are people all around the world doing?
Buying physical gold, silver, and guns...
Fear of Obama drives gun sales and gun stocks higher
Posted Feb 25 2009, 02:02 PM by Anthony Mirhaydari
blogs.moneycentral.msn.com
Gold coin shortage as demand soars
ft.com
By Javier Blas in New York
Published: February 25 2009
The rush by retail investors into bullion coins is creating
shortages as mints across the world struggle to meet the surge
in demand, dealers and mint officials say.
The scarcity is lifting coin premiums to as much as 5 per cent
above the spot gold price, a level reached briefly after the
collapse of Lehman Brothers last September, when coin
hortages also surfaced.
“There is demand for double or triple what the US mint is able to produce,” said Michael Kramer, president of MTB in New York, one of the four US gold dealers authorised to purchase bullion coins directly from the government’s mint.
The US Mint has sold 193,500 ounces of its popular American Eagle gold coin in the first seven weeks of this year, the same amount it shipped during the whole of 2007 and about the same as in the first six months of last year.
“The demand is extraordinary. All the coins we got on Monday are gone today [Tuesday] and we will not be able to take any order until the following week,” Mr Kramer said. “It is the same with other mints.”
Bullion coins used to be bought mainly by collectors and gold bugs, but the financial crisis is leading regular retail investors to embrace them, dealers say.
Although the surge in coin demand is a bullish signal for gold prices, the fact that mints cannot match demand means that the potential extra consumption does not push spot prices higher, but just drives premiums above normal levels.
The Rand Refinery in Johannesburg, which mints the world’s most popular gold coin, South Africa’s Krugerrand, said demand was above its maximum capacity, even after doubling last month to 20,000 ounces from 10,000 ounces a week.
Johan Botha, head of precious metals sales at the Rand Refinery, said there was demand for more from international investors, pointing to strong sales to Switzerland, the UK and Germany. “If we were able to produce 30,000 ounces,the market would absorb it,” he said.
Mr Kramer said MTB had Krugerrand orders equal to three months of refinery supplies to the company.
The New Zealand Mint said it was doing as much business in a day as in a month a year ago, mostly servicing global investors.
Michael O’Kane, head of gold sales at the New Zealand Mint, said: “Most mints and bullion manufacturers are struggling to meet current demand levels.”
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Buy some puts for insurance here, use your stops
constructively, and hedge with broad market shorts.
Hopefully everyone lighted up into strength on this rally.
Gold stocks are hanging tough here in a very ugly broad market
tape, and into the face of an endless stream of bad news.
Beneath this level, there has been very strong buying support
for the HUI at 248-265.
If the DOW breaks under 7,000 we could easily see a mass
exodus from the market with the insiders like GS using your
TARP money to naked short the living daylights out of the
market, as they pull the rug and credit out from under their
own hedge fund clients.
...so be prepared, and pre-positioned for the potentiality.
You can always buy on strength.
I bought a few stocks here, mainly ABX, but primarily used
out of the money "put sales" to either give me a discounted
re-entry at that HUI 248-265 support area if seen, or to give
me a little premium income if we turn and rally here.
And what I am going to do today, as soon as the market closes,
is to go buy some more physical silver with profits taken off
on this Jan-Feb gold rally.
Silver back in the $12-$13's's looks like a pretty good buy here.
And with all that is going on in the world today, especially
here in the peoples republic of aMeRiKa... you need to trade
paper, so you can accumulate more physical metal.
So today, I'm going to go get me some more Silver.
Mo Silver & Mo later,
SOTB
PS: And please take a minute and think about these two quotes...
"Eternal vigilance is the price of liberty."
And...
"The only thing necessary for the triumph of evil,
is for good men to do nothing." |
