"Hutch: what makes you think that this is only a short term boost for gold? To me, this is the most positive news for it in a year. Now if only Bill M's call on European CB selling drying up could materialize, we could see an honest rally IMO. Just wondering about your statement as I've noticed you have made some good calls in the past."
As of yesterdays close, and due to the US intervention, the theoretical value of gold became $289.67/Oz. {note: it should be mentioned that the theo val for gold on WED was $293.43, and that intervention takes away from the gold theo price}. So in reality Gold rallied past it's theo value. Whenever a governement intervenes into a market they create a situation where a hedge fund can take advantage of. So over the coming weeks, the hedge funds will push against the YEN to see how strongly the USA is to hold the YEN fall. It's only because the gold was in a short covering that it managed to reach as high as it has.
But what really happened was a spot depreciation in the US currency, and note a broad base currency rise {like BP/Oz, MK/Oz, CD/Oz, which moved less}. Over the next few weeks, the real war on the yen will begin. And it should get pushed to 144 again {and past}, cause it is doubtful that the USA is willing to take on the inflation/hyperinflation that comes with holding the US currency lower.
PS: A crash is forming on the horizon. Which should be BAD for gold. Send hate mail directly to me.
PPS: US spent 2 billion on the intervention {Source CNBC} |
