This is looking good...
Silver touched $6.22 in the active March 1998 contract on Wednesday evening, the highest price for the active silver contract since March 23, 1989.
Updated @ 5:35 p.m. EST, Thursday, December 11, 1997.
Since silver hit a new multi-year high but ended the day lower, this marks a bearish key reversal.
Barrick Gold of Canada, often a trend-setter in the gold mining industry, announced today that they will buy back ten percent of their outstanding common stock in the open market. CEO Peter Munk stated, "The shares are trading in a price range that does not reflect the value of the company's mining and financial assets and future business prospects. We have the financial strength to undertake this program."
According to New York-based CPM Group, private investment demand for gold bars and bullion coins has increased sharply over the past two months as gold prices tumbled. Net private investment demand is projected to total 9.3 million ounces in 1997, up 129.2% from 4.1 million ounces in 1996, with 1998 demand predicted to rise by an additional 33%. CPM found that the closest historical parallel was with the end of 1992, just before a major gold rally in 1993.
Bank of France Governor Jean-Claude Trichet stated this morning that he believes that the reserves of the future European central bank will include gold.
According to Ann-Rose Heibel Dietrich, member of the board of directors for the Deutschen VerkehrsBank, it would make sense to take advantage of current low prices to build strategic positions in gold. According to Ms. Deitrich, the introduction of the planned European common currency will diminish the range of investments in currencies and their differing returns, which would boost the price of gold.
Gold mining analyst John Tumazos raised his estimated gold price for the years 2001 and 2002 from $400 to $425 per troy ounce. According to Mr. Tumazos, the current deep decline provides the foundation for a stronger recovery in the early years of the next decade. "Short covering, the forced liquidation of bullion loans or voluntary liquidation of bullion loans could cause violent reversals in the gold commodities markets, which may cause a $50 per ounce reversal in a brief interval such as one month." Mr. Tumazos also stated that "Federal Reserve chairman [Alan] Greenspan's December 2 remarks provide a basis of optimism for gold or other commodity investors. For the first time he acknowledged 'deflation' as an economic problem. A reversal in Fed Chairman [Paul] Volcker's priorities to fighting unemployment rather than inflation in June 1982 was the turning point in the 1982 gold market bottom." |
