Gold prices looked set to finally achieve the $1K mark this morning, as background market conditions shifted from bad to worse overnight. This will likely become known as the Carlyle/Drake Rally (or cave-in, depending on your preference). The imminent doom of the bond fund and probable demise of the hedge fund sent icy shivers through the financial markets that way overshadowed the (brief)cheer we witnessed following the Fed's term facility plan the other day. Let's see what jawboning and/or action plan emerges before the Fed meeting. All the US President managed to say about the current predicament of the greenback was that is was
not 'good tidings' (?!)
A quick scan of values recorded before New York opened for business revealed oil prices at $110 per barrel, the dollar basically at parity with the Swiss franc,at 1.56 against the euro, and under 100 yen - all records or near-records. The breach of the 72 mark on the dollar index also raised the gloom among traders,
despite more back-channel chatter about intervention (see Japan). The remaining bets have now shifted to what hour the gold price might overcome the four-digit number as opposed to which day. This might also be a day where we see the Dow reversing a good part of the 400+ point rally from two days ago. The Nikkei certainly fell by that much overnight.
New York spot trading opened with a $13.00 gain showing gold at a new record of $996.50 per ounce and related metals surging in concert with strong gains of their own. Silver vaulted 69 cents higher to $20.70, platinum up $38 at 2109 and palladium up $12 at $515 per ounce. Participants may not be able to keep much of a focus on US economic statistics coming their way later this morning. The news of the day is centered on financial market turmoil. Commodities markets are in a state of disarray as well, with huge sums of fund money being thrown at them, while still trying to absorb the pyramid of long positions which has already been piling skyward in previous weeks.
Rather than distract with additional highlights from the review on 2007's fundamentals (we will resume as soon as markets provide a respite)we will focus on today's action. You could be witnessing history in the making. Provided you can quickly access our overwhelmed website that is...