Monday, December 13, 2010

Charting Monday: Dollar and PMs

I really enjoy charting precious metals.  It is fun to watch the appreciation, and what it leads to.  It is also interesting to note the manipulation, and even more interesting when so few realize when it happens.  Lately it is my guess that the Fed has been leasing a massive amount of gold.  This is why the dollar has been let to hold on to its status as reserve currencie by the rest of the world, however temporary; because they are buying gold contracts.  Too bad the world's countries are stupid enough to play make believe.  If you do not have the physical you do not own it.

The dollar has had a late day rally.  Well, it is less of a turnaround, and more of a stopping of a run.  The run on the dollar stopped, I will say that.  The dollar was running because no one except Blackhawk Ben wants to pay for the US fiscal irresponsibility.  The effect on gold and silver was to the PMs advantage.  They both had several break outs today.  Platinum also had a great gain, while remaining highly volatile.

Days like this create a wide trading range which is easy to nickle and dime.  If someone can buy huge contracts then PMs make for great action.  With the gains far outweighing the losses, the manipulation is not what it used to be, but it is still there.

We could see this exact pattern all week, as I think that $1500 gold is not far off.  Gold has caught at $1394, and support at that price is justifiable based on last week's action.  I think tomorrow will be another huge day, with Wednesday seeing a consolidation.  The news on Ireland will see huge gains for gold:  the IMF either takes control of another country's soveirgnty, or Ireland leaves the EUro.  Both instances will be good for gold.

I think silver has another +2% day tomorrow and gold will likely rise $10 per ounce at the least.  There will be big gains later in the week too.

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