-- Posted Tuesday, 10 April 2007 | Digg This Article
Some bullet points on today's market activity:
Gold is trading more like a currency right now than a proxy to oil. This should signal that many are expecting the dollar to come under some significant pressure in the near term with new rhetoric out of the US government yesterday about another set of piracy and trade issues with China. Again, this is a slippery slope and should the US ramp up the trade sanctions and protectionist trade policies, China will hit back. Being one of the largest holders of our treasuries and dollar denominated assets, it doesn't take long to figure out how they could hurt the US economy the most.
It seems that we're finally entering the period we've been expecting when central banks around the globe will be holding rates steady or raising rates at the same time the US has to start entertaining some cuts to interest rates. This is the ideal currency situation for gold to trend higher.
Copper, nickel, zinc, aluminum…you name the metal and it's surging today. This is helping push the precious metals sector prices higher.
Miners are continuing to hit the market with news of delays at mining projects and lower than expected production figures. Last week, Goldcorp pushed back the start date and lowered 2007 production numbers for it's Los Filos mine in Mexico. The latest news is from analysts covering Gold Fields, 4th largest gold producer, stating that mine output in South Africa and Australia will be significantly lower than expected for this quarter.
According to the World Gold Council, jewelry demand in the Middle East is ramping up and expected to be 20% higher in terms of value this year compared to last year.
There are no US government reports today. Wednesday is the release of the Fed Minutes from the last FOMC meeting. Expect pundits and policy wonks to start chattering about the possibility of stagflation entering the economy as we continue to get mixed signals about growth vs. inflation.
Blanchard and Company, Inc. is the largest and most respected retailer of American rare coins and precious metals in the United States, serving more than 450,000 people with expert consultation and assistance in the acquisition of American numismatic rarities and gold, silver and platinum bullion. The Blanchard Economic Research Unit is a key source of precious metals market analysis and continues to be an important resource for financial and consumer media throughout the United States. Blanchard and its predecessor companies have called the New Orleans area home for more than 30 years. For more information about the company, visit BlanchardGold.com or call the company toll free at 1-800-880-4653.
-- Posted Tuesday, 10 April 2007 | Digg This Article
