-- Posted Thursday, 24 May 2007 | Digg This Article
The durable goods figures and jobless claims data already released this morning were a mixed bag of ups and downs and aren't giving markets any sort of direction. New home sales figures just released are showing a significant surprise to the upside which could put dollar correlated assets (read: precious metals) under some pressure the rest of the day until our next housing data point tomorrow. While the dollar doesn't appear to be bouncing back on the news, metals markets are trending lower following the data. As always, keep an eye on the London close. Trading in the precious metals sector has gotten particularly volatile of late on market openings and closings around the globe.
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The dollar's near decade lows. Oil has a tight grip on the mid 60s range. Most miners spent their time at recent conferences talking about flat to lower production totals and needing higher prices to justify capital expenses. These are the fundamental market issues. This is what has gotten the gold market from a low of $256 to $660 today. This is what we believe in and this is what we follow. Nothing's going to change our outlook on this segment of the market as long as we continue to get more and more data about lower mine production, more dehedging, increased demand and so on.
Over the short term, there has been a great deal of non-mine supply out of the central banks. Over the course of the full calendar year, that supply will turn out to be short of quota, but short term, it's bridging the gap and keeping prices in check. According to the World Gold Council and GFMS (who does all of their research), investment demand is down sharply this past quarter, but total demand is up. We're going to see a break in the central bank gold bridging this gap in the market and should we see investment demand tick back up in any notable way, the market will move higher and move higher quickly. Another guy out there that "gets it" below.
``All I can say is there's been increased non-mine supply over the short term which has put pressure on the gold market, and the dollar relationship has not changed,'' said James Leahy, a stockbroker at Mirabaud Securities Ltd. in London who has invested in gold bars since 1998. ``The dollar's weakness is always interspersed with periods of recovery.'' - Bloomberg Article May 24th
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 www.BlanchardGold.com
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