Friday, February 02, 2007

Pride comes before the Fall

I've been offline a bit in the last couple of days.

I've been relocating and don't have internet (gasp!) in my new location yet. I'm currently typing this in a dhl package store on their "highspeed" connection.

I noticed that gold was climbing northward pretty powerfully, and then this morning took a sudden nosedive DOWN! :)

Pretty "expected" as things stand. I look for the powers that be (if you're a conspiracy nut like me) or the "swing traders" (if you're not) to try to knock it down a bit. *If* you believe that the "swing traders" include central banks, the IMF or anyone else that is using your tax dollars to prop up the slide in the dollar (and consequently tapping down the upsurge in gold), then rest assured they've got enough ammo to make a dent.

I noticed that the downdraft coincided pretty well with gold hitting 660/oz. For the time being, that is the new "line in the sand". The extent of the downdraft will depend on how much they want to defend said position and how much it rattles the new "bulls" in the gold camp. At the time of the writing gold is selling for about 648/oz.

I still expect at least one more good sized cram down (5% from the highs this a.m.) on the price before Chinese new year. Perhaps this is it and we won't get the pullback. Perhaps I will be (gasp!) wrong.

I promised a treatise on how to leverage this move in PM's as a way to hedge a potential calamatous financial event in 2007. I've been incredibly negligent in finishing that post, but will do my best to complete something on my borrowed Internet time before the Chinese New Year is upon us.



Anonymous said...

I thought it was the Lunar New Year.Celebrated by people all over the world,not just Chinese.Go to VN every year where the whole country celebrates it.Think only Americans call it the Chinese NY.

Anonymous said...

Always thought paella was from BarThlona or BAlencia in Catalonia.