-- Posted Tuesday, 20 October 2009 | Digg This Article
| | Source: GoldSeek.com
Dec Gold: Open= 1065.0 High= 1069.0 Low= 1052.6 Last= 1058.0 -7.0
The Producer Price Index fell 0.6% in September, after rising 1.7% in August. Analysts expected no change in last month's readings. The Fed will be looking at the PPI and CPI for clues about inflation, and so far it remains relatively muted, meaning that interest rates will likely remain unchanged for some time. While on one hand, inflation theorists are stung with data that is deflationary, but on the other hand, the opportunity for inflation down the road increases because the Fed’s loose monetary policy is extended for even longer.
The reaction today wasn’t disastrous for bulls but coupled with the poor housing starts data, it was little wonder the broad commodity index was lower today. Still, there appears little on the radar to suggest a change in tone from the government that monetary or fiscal policies will change. Whether or not they should change is another matter.
Ben Bernanke said the other day, "Our policy-makers recognize that we need to develop a fiscal exit strategy that will involve a trajectory toward sustainability….That is critically important in order to maintaining confidence in our economy and confidence in our currency. I know that is very well understood in Washington."
Is it really understood? When the Social Security Administration calculated that due to deflation in the past year there would be no cost-of-living-adjustment, the White House stepped in and announced it was backing a measure to give seniors a one time $250 check to make up for no COLA. So, while costs supposedly went down, the government is going to borrow over $13 billion to hand out? Money the government does not have.
Mr. Bernanke may recognize that the exit strategy from our fiscal and monetary crisis is through severe budget reforms, our elected representatives in Congress are utterly incorrigible, however.
If a correction in gold takes a short term hold, expect a sideways band, or perhaps a dip lower to the $1,025 range. Traders need to be patient and understand that corrections, hiccups, and pauses are all normal and warranted at times during bull markets.
Review charts on these markets here www.britefutures.com. Remember that futures and options can be used for bullish or bearish positions; feel free to contact me to discuss trading strategies. Each contract/option = 100 ounces, a $1 move in a futures contract = $100.
To open an account and receive trading recommendations on gold futures or options contracts (also stock indices, energies, currencies, etc.), or to use our online paper trading service BriteTrak, contact me at tom@altavest.com. Visit www.altavest.com to request a Free Trading Kit. Keep in mind that there is risk of loss in all trading.
Thank you,
Thomas Hartmann
Altavest Worldwide Trading, Inc.
800 994 9566 x109
949 488 0545 x109
Fax 949 488 7625
-- Posted Tuesday, 20 October 2009 | Digg This Article | Source: GoldSeek.com
