If somebody is buying silver, they might also be buying gold.
If there is one thing that is certain in the days ahead, we will see a high degree of volatility in the silver market. Today, prices opened nearly 40 cents higher, at the highest level in 9 years, at the $7.40 level for the March contract. Profit taking by some producers and
selling sent prices back below $7.00 before midday. Then we saw new
buying emerge and prices raced back above the $7.00 level. The other
metals took their queue from the movement in the silver market. Gold was not impressive, it did reverse down on the day, opening
on the highs, closing negative on the day, not a good indication.
Some more consolidation in gold could set up some good buying
opportunities. When you get into this situation in silver, no one
really knows how high the price can go. But if you take away 130MM
ounces from the market, which is what Warren Buffet has done, 20% of
the world production for the last year, it definitely has an impact on the market. Silver should continue moving higher, although it should
be extremely volatile. Gold down .50 at $300.70, silver up .26 at
$7.28, platinum gained $2.80 at $399.30.
Gold and platinum are still looking at the fundamental reasons why they should be moving up (inflation).
Quite a bit of nervousness in the bond market in front of tomorrows employment report. Many people are expecting that the economy
did slow down in the beginning of this year due to problems in S.E.
Asia. But now we are seeing some numbers come out where the economy
is not showing signs of slowing. If we do not get that slowing, it would definitely be bearish for the bond market. Today many traders
just wanted to take profits and lock them in before we get the employment data tomorrow morning at 8:30 EST. That will set the tone for the market. We have support at 120-02/03, a double bottom there,
resistance at 123. Whichever way the market breaks is going to go a long way, tomorrow mornings numbers will give us that direction.
Bonds down 24/32 at 120 27/32.
Also much nervousness in the dollar, it is not looking
that well compared to the bond or stock market. Has broken some good support support areas around 100, closing below the 99
level. Stocks slightly lower, nothing dramatic . The dollar is on the defensive, with the dollar index down 68 pts at 98.44.
The stock market is sort of on hold right now, waiting and watching
what we get for the first piece of economic data for the first quarter of this year, the employment report for Jan. which will be released tomorrow morning. That will give us an idea if there is any impact whatsoever from S.E. Asia. Are companies slowing down their
production? How many people are they hiring or firing? That will
tell us what to expect from the stock market, interest rates, and
the dollar. All of this has kept the market on hold today.
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