Euro 2008 final result
And Then There’s ThisFriday, June 27th, 2008
Both gold and silver were pretty quiet in Far East trading on Thursday morning. The London open gave no indication that prices were going to work their way slowly higher going into the Comex open. But about an hour before New York opened for business, gold and silver started going parabolic…and then went vertical on the Comex (AMEX: IAU) open.
As you are now more than aware, the bullion banks (not-for-profit sellers) hit the markets hard about 20 minutes after the Comex open…leaving all of us (including this writer) fantasizing on what might be if/when the dealers decide to stop selling and start covering their mega-short position. This is the fourth or fifth vertical price chart we’ve seen in both metals in the last 10 days of trading…all of them squashed shortly after the NY open.
The gold price was contained all through regular trading on the Comex, but surged higher once again in after hours trading. Silver didn’t fare as well, and its opening spike high was it for the day.
I must admit that I was surprised to see Thursday’s action hard on the heels of options expiry and before first day notice for July delivery…but the economic and financial news is now beyond horrific. However, if the HUI activity yesterday was any indication, then something is definitely up as the Dow got hammered…and precious metals stock buyers were out in force as the equity markets plunged…which is very encouraging.
Open interest numbers for Wednesday are as follows…gold o.i. fell another very respectable 4,900 contracts…but silver o.i. went the other way…up 1,717 contracts. There’s lot of switching and ’stuff’ going on around options expiry/first day notice, so I wouldn’t read a lot into this.
My first story today is more talk about intervention in the commodity markets. However this time, the London Metal Exchange (LME) is warning that intervention would be hugely counterproductive. The article is entitled “Curbing Speculation is Foolish, warns LME”. At least someone in this world has got their head screwed on straight. The link is here.
The second article is another Armageddon story…this one from Barclays Capital. It’s another Ambrose Evans-Pritchard piece from The Telegraph in London. The story is entitled “Barclays warns of a financial storm as Federal Reserve’s credibility crumbles”. The link is here.
Inflation is really picking up…Whether it’s steel or oil we see it everyplace. It’s exploding….The Fed has to be very careful not to signal that inflation is a secondary concern and something that can be dealt with later…” - Warren Buffett, 25 June 2008
I see in a Bloomberg story that analysts are backtracking on banking stocks after saying that “the worst is over”. And the chief of OPEC said that oil’s rise is mainly because of the dollar’s devaluation. Libya threatened to cut oil production in response to a new U.S. law. Seat belt fastened…and crash helmet at the ready…would be a good way to start the day. Hank Paulson should be a busy man. I must admit that what I see out there scares the hell out of me. Good luck to us all.
See you on Saturday morning.
Casey Research correspondent-at-large Ed Steer is a keen observer of the financial scene and a board member of GATA.org.
Source: And Then There’s This…Friday, June 27th, 2008
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