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Gold/Mining/Energy : At a bottom now for gold? -- Ignore unavailable to you. Want to Upgrade?

To: Bobby Yellin who wrote (1571)	8/27/1998 2:24:00 PM
From: Vieserre	Read Replies (3) \| Respond to of 1911

Some time back I posted a comment on divergencies. Today the government reported that initial jobless claims fell to 297,000 in the week ended Aug. 22, down from the 303,000 the previous week. It was the lowest number of claims since the April 11 week when it measured 288,000. This is the type of news that causes bond yields to rise and the Fed to raise rates. Notwithstanding, the yield curve is inverting, gold is breaking into new lows, and the stock market is crashing forecasting recession, if not deflation. It is something to reflect on that but for lack of confidence in the government, driving the ruble down, Russia would probably have been able to manage with the IMF loan; and many countries whose currency is being devalued, whose stock market is falling, and who now may at risk of default has had absolutely nothing to do with the debacle except a relationship of their currency, and products which it may sell, to the dollar. Further, in any commodity, one may expect its price to be based on supply and demand. But since most are priced in dollars, supply and demand may have nothing to do with price as its price will increase in local currency even though supply and demand remain the same. An open global economy simply cannot tolerate such forces set in motion by one governmental authority and currency. Nor can the US remain unscathed like a fireman in a fire-suit while an inferno rages about him. FWIW, it would not be unexpected for the XAU to have at least a short term bottom here anticipating a snap back to the break-down point in consideration the massive volume and "apparent" attractive prices that many have fallen to owing the fear associated with the fall in gold compounded by a fall in the Dow. In the longer term, it does not look good unless the Fed starts providing liquidity for global dollars that are so much sought after. Ah thats the rub, but how will that affect domestic inflation? Ciao Bene