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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Gary H who wrote (18225)	5/6/2003 8:41:18 PM
From: sea_urchin	Respond to of 81434

Gary, here are two interesting commentaries about the market. decisionpoint.com >>>...there are long-term technical signs that the market may be headed higher. If the SPX were to decisively break out of the trading range and above the long-term head and shoulders neckline, it would be the final technical event needed to cancel the bearish case for the time being. A break out of the trend channel would not be conclusive by itself. It does not seem reasonable to me that we are beginning a secular bull market with valuations in the stratosphere, but a cyclical bull market is not out of the question.<<< technicalindicators.com >>>We find it difficult to overlook the fundamentals in the gold market. The only time gold has sustained a significant breakthrough in this generation was in the late 1970's. At that time the dollar was deteriorating fast as prices and interest rates were soaring. Although the dollar has been weak lately, it is nothing like the late 1970's, the time of runaway inflation, soaring interest rates, oil crisis, lines at gas stations, and a rapidly falling dollar. The most important difference between now and the 1970's is that people are not rushing to buy physical gold. So far, only the futures market is achieving a breakthrough. In the 1970's it was the opposite - the futures market soared after people were buying gold, not before as is the situation now. Much has been written about futures markets versus the markets for the physical commodity. Although commodity futures markets can (and often does) get out of line with actual supply and demand in the physical market, in the long run they tend to coincide. Unless demand for physical gold picks up, something that hasn't happened yet, it will be difficult for gold to sustain high prices. Most significant and relevant however is that in the physical gold market, supply far exceeds the demand, which (according to latest available quarterly figures) continues to decline (see below). While it is quite possible that gold will rise sometime in the future, there is absolutely no indication of it in the physical gold market. It is public knowledge that gold demand is down (see below). Just as there was mass hysteria during the bull market in stocks, people paying unreasonable high prices for stocks, we are seeing a mini version of it in the gold market where there still exist a lot of gold "bugs". Of course they can't be blamed for wanting to make good investments. However, they should question why they are buying gold future contracts while the demand for physical gold is down while supply is so plentiful it hardly warrants discussion.<<<