Thursday, September 29, 2011


Copper prices have sold off in recent weeks.

A slowdown in the developed world  is resulting in slowing chinese demand.

The recent rebound in the oversold USD has been accompanied with a sell off across asset classes, and Copper has been no exception.

Question is, are we headed into a global recession and is Copper just flashing a warning sign?

Monday, September 26, 2011


As expected, Gold prices finally corrected from recent highs.
Many Gold bugs are panicking and as prices plunge, & investors are wondering if Gold's mega rally has finally run out of steam.

Firstly, I continue to believe that Gold's long term fundamental story is still intact.
The current state of govenment finances  combined with the ongoing post bubble debt deleveraging will mean that Gold will continue to retain its safe haven status.
Secondly, Gold has not suffered any serious technical damage on its long term chart.
Thirdly, a pullback in prices was long overdue after gold's monster rally from a sub $1500 price level.

Below is a link with some interesting charts.
Bull and Bear case for Gold, Silver and Stocks -- Looking at the chart below, gold prices have pulled back after testing the upper price band (Red line) of the chart.
Could we see a pullback to the green trendline like the 2008 correction?
As someone rightly said--Never say never!

Lastly, I would advise Goldbugs not to panic, but to just hold on patiently for now.
The troubles of the US Housing & Financial sector of 2008 have now morphed into stressed government finances and Sovereign debt crises of 2011.

In 2008 many corporates (especially in the financial sector) were downgraded by the rating agencies.
In 2011 several governments have had their Sovereign Credit ratings downgraded.
Once again the Credit rating agencies are raising red flags rather late in the day!!!!
As David Rosenberg recently pointed out, the aftermath of a post bubble debt deleveraging saga is no 'garden variety' recession.

Gold is still the last refuge in this storm, but investors will have to learn to ride out some mega volatility and corrections along the way.

Thursday, September 8, 2011


Gold continues it's fantastic run.
Just a word of caution to the permabull gold bugs.
The 50 day ma is at $1675.80 & the 200 day ma is at $1495.30.
After rallying by almost 47% over the last year, we could see a sizeable pullback without doing any technical damage on the charts.
In the meantime, continuing concerns of the sovereign debt of Club Med , Central bank interventions in the currency markets (like the SNB yesterday)and debt and deficit worries in the U.S.A. will continue to support gold prices. Expect more volatility ahead of President Obama's Speech on ''job creation'' and Ben Bernanke's speech this week!