Tuesday, December 28, 2010

Predominant Buying

Predominant buying came out of the woodwork today at various times throughout.  There was between 4-6 major buys today, and that is obvious by the bottoms of the chart; bottom, and boom!  Another buy.  Do yourself a favor and look at the graph from today.  Where the big moves start.  Big buys came out of almost no where.

At the beginning of each day the LBMA members gather and decide how many tonnes of gold they will sell, and at what price.  The selling and buying is coordinated from both sides.  This is how the LBMA has worked for almost a century.  The other players like the COMEX operate a little differently, which is why these large purchases come in New York time.  Interestingly the monie has moved into the rest of the world in masse.  How much longer can the LBMA fix their prices?  Also, will they want to keep the price suppressed for very long?

All the other markets were confused by these currencie moves.  Oil was up on supply concernes.  The dollar was up on risk concerns.  Stocks were pulled across sa wide range of prices.  Treasuries are failing.  Nothing looks better for gold.

Mining equities will play this better than anything, like I said last night.  Oil corps will also make large quantities of cash.  If Bernanke continues to print, and it is the Federal Reserve that prints, all equities may be inflated.  The farce continues.

Call out at 5:30 has gold and silver trending with the dollar lock step.  The strong gold strong dollar trade continues.  If risk is on there could be a dollar/gold meltup.  This would happen because gold is monie and if risk is off investors will want monie as to stay liquid.  Gold does provide perfect liquidity, as it is fungable, a unit of account, and a reserve asset.  Today people bought gold be

Otherwise maybe Bernanke continues to monetize the debt by printing dollars, and continues to inflate the dollar, and gold rises in price accordingly.  Of course the squeze could come from both sides of the equation.  WHat I mean is DXY could stay at eighty, wish washing between 81 and 79.  All currencies could wash out but still trade evenly.  Gold would domianate this scenario.

Basically, nothing stands in the way of gold to continue to dominate the economic landscape for the next decade.  Not only does it have the fundamentals to provide as a great asset, but technically the price could increase due to supply/demand equations.  As there is less and less gold mined every year, and if demand continues to rise, their will be sharp price action to the upside.

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