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February 5, 2010 / Hal (GT)

Gold Testing New Floor and Some Reading Material

Gold I believe is testing out a new floor. Previously, most have pegged the floor in general at the $1,000 spot. But some of the stuff I’m reading and watching is leading me to believe that the $1050 area is being tested as new floor.

Right now the free desktop widget ExactPrice is showing gold’s spot at $1053.50. Earlier it hit a low of $1045.30, but the action this morning is showing buyers attempting to keep it in the $1050 range. The end of the day will tell.

That said here are some links that I think are must reads.

Europe’s debt crisis is a buying opportunity for gold lovers?

Precious Metals at ‘Bargain Basement’ Prices – James Turk

Hourly Action In Gold From Trader Dan – Jim Sinclair’s Mineset (important read)

If you read none of the others, this is the one you must absolutely read:

Breakdown in the Gold Market by Jim Willie CB

A great disconnect exists in the gold market between the exchange futures contract price (the paper price) and the gold bullion paid price for transactions (the physical price). The differential in price is growing wider, enough to place tremendous pressure on the gold market itself. Look not to the gold premium paid for purchases, but to high volume purchases in the tens of million$. In mid-December, almost every demand for gold contract delivery was matched by a cash delivery, complete with 25% bonus premium offered. The officials even produced a new ledger item called ‘Cash For Delivery’ that was necessary to balance their badgered books. It prompted little attention. Some call it a basic bribe. Others call it a technical default.



Leave a Comment
  1. Sean North / Feb 5 2010 7:01 pm

    Thank you for your article on the Breakdown in the Gold Market. Wouldn’t this argue to stay away from GLD but load up on GDX?



    • goldtracker / Feb 5 2010 9:03 pm

      That’s the way I read that piece, Sean. Though I wouldn’t put all my eggs in anything. Make sure you investigate. You should check out Casey Research for some good info on mining stocks too. You might want to investigate Peter Grandich as well. They’ve both had a great track record from what I can tell.

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