Yet another attempt at $930 materialized in the gold markets this morning, and it appears that, perhaps, there just might be success to report, this time around. Further hurdles are still present on the road to the magic four-digits, mainly around the $950 area. As reported yesterday, the market also needs to see investment demand overcoming offtake slumps in fabrication and surging scrap supplies, in order to first sustain current levels and then be able to make a go of it to the 1K pinnacle.
While there is enough worry going around the world to catalyse such a shift, there is also plenty of price-consciousness and need for cash, to temper the process. These are tough times for some, and happy times for others, in the gold business. As for the future, the battle of the Flationists rages on, with the De camp currently grabbing the headlines, and the In troops forming a Roman Turtle of golden shields to protect them from some kind of rumbling they fell in the ground under their feet.
And then, there is confidence. The almost complete lack of same, and the desire for instant gratification makes for very cranky investors. Like the ones we saw pulling the 'sell' trigger yesterday, when Mr. G -the messenger- took the wraps off The Plan. Nobody seems to have the time to build Rome when signs point to Paris burning...
Gold prices rose to an all-time high overnight. In India, that is, where parents of pretty brides-to-be must now shell out 1,450 Rs for a gram of yellow metal. Consider that some of the brides often wear what amounts to a kilo of gold and you can start computing...
...what it must cost to properly launch one's daughter into married life. Say, $30K for starters. Better consider calling Jamal Malik for a handsome marriage prospect.
New York spot gold prices opened with a $12 gain, quoted at $927.30 on a background of nervousness and as the dollar gave back a modest amount of previously achieved gains. Participants eyed a rise in oil prices, ahead of the release of US inventory data, and on perceptions that OPEC's recent cuts are perhaps beginning to have some effect. However, the IEA projects about half a million fewer barrels of black gold to be consumed daily, this year. The US trade deficit fell to a six-year low. We say, what trade? China's exports fell 17.5% last month, at the fastest rate since 1998.
Silver rose 13 cents to $13.30 per ounce, while platinum managed to maintain gains and climbed to $1048, up by $14 on the day. Palladium did nothing, and opened flat, at $211 an ounce. Metals traders are going to ponder the effects of that news and watch what the dollar has to say. The shrinkage reflects an economy that is imploding faster than the rest of the world -even if that other part is not doing too well, either.
Well, we've also heard from the Guv'nor this morning. 'Ello, Guv'nor! A year late, and billions of pounds later. In the midst of the worst recession among the G-7, Mr. King said that lower rates and cash infusions are on the UK horizon. Where have we heard that one lately? Also heard were the unutterable words 'desirable levels of inflation.' Turns out 2% inflation is the must-not-break level. Broke it did.
Across the pond, desperate investors gave Mr. Geithner no slack upon his debut, and the reviews were written all over the Times Square's scrolling signs, when they flashed yesterday's closing Dow number. Mad Money Cramer felt sorry enough for the man to issue a plea for patience. Mr. G. might yet surprise many, given some time. We now present to you, something completely different: The markets' initial takes on Messrs. Geithner and King's ride to the rescue:
GUARD #1: What, ridden on a horse?
GUARD #1: You're using coconuts!