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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: rubbersoul who wrote (17131)	10/24/2004 7:26:22 PM
From: Sawdusty	Read Replies (1) \| Respond to of 312313

Even more now jh.....don't know about you, but I'm getting nervous the closer it gets to $434, will it, won't it, will it......LOL. I've even got my legs crossed, and not for the usual reason. <g>

To: rubbersoul who wrote (17131)	10/25/2004 12:25:14 AM
From: zoo york	Read Replies (2) \| Respond to of 312313

Hi John! Do you remember the presentation by Paul Van Eden at the gold show last month? Basically his premise was that the action in gold was driven by the differential of a basket of currencies, including the dollar, and that based on this relationship there was no evidence of any manipulation to hold back the POG. At the time I commented that I thought he had it backwards, ie. the reason that the POG correlated so closely with the variance in dominant currencies was directly a result of the manipulation to keep it within the desired range. Well given the action of the last 10 days or so, it would appear Van Eden's theory is breaking down. The USD has dropped from a level challenging 89 cents, to the current range threatening to fall below 85 cents tonight. That is a massive collapse in value by any standard. If there was a close relationship just based on currency differentials as Van Eden suggests, then why has the POG remained in a fairly tight range through all of this? I know that his analysis was based on longer term trends than just the consideration of a few days of extreme fluctuation, but still one would expect that the POG would show strong gains to mirror the dollar woes. I think the case for manipulation has never been stronger if the POG reverses tomorrow after the gains in overseas trading. The dollar slide should at the very least serve as a wakeup call for analysts who are supposed to watch the trends, and may also represent a shot across the bow of those who buy into the party line from Easy Eddie. One other point of Van Eden's presentation that does not square is that almost every other commodity has recorded gains in excess of gold this year. Gold is not just a monetary metal. It also represents an alternate asset allocation during times of crisis. One would expect that the spectre of rising inflation, higher oil prices, geopolitical tension, etc. would drive the POG higher than could be accounted for strictly relative to currency differentials. Gold should be outperforming other commodities in other words. Price capping and manipulation seem to offer an explanation of why this is not so. If the POG does not show strong gains tomorrow and hold them, then I will be bearish on the short term outlook for the PM sector. The dollar will surely counterattack this week at some point in a counter-trend rally, and if gold cannot rise on a weak day for the dollar, surely it will be kicked in the teeth on a day when the dollar recovers. cheers! COACH247