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November 17, 2010 / Hal (GT)

Gold broke through the support of $1,345.00

Well, I was a bit surprised to see that gold broke through the support level of $1,345.00 yesterday as I was watching in real time with the free application, ExactPrice, while I was doing some work on the computer.

But it seemed to find support at the $1,330.00. As I typed it’s at $1,334.40 and has been pretty much range bound all day. The primary news across the airwaves has been focused on the TSA debacle and some royal wedding in England. Hmmm… I wonder how both those things will be paid for? Oh, right on the backs of the men and women on the street.

I have a few links worth looking at and the first one is a must read.

Bond Market Imposion & Gold Tactics by Stewart Thomson.

This from CaseyResearch is also worth a read, specifically the section on gold: The Lion and the Crocodile

The current setback in the commodities can be attributed to two factors. The first is that there is an increasing amount of institutional money in these markets, much of it dedicated to gold and silver. The managers of these funds invariably get paid bonuses based on performance. Thus, it is entirely normal that the sort of run-up recently experienced by the metals will trigger profit taking/bonus making.

This does not change the fundamentals for precious metals, although it does suggest that, going forward, especially energetic run-ups will be followed by opportunistic institutional selling – even as the underlying trend for the metals remains intact and moves higher over time.

Secondly, and more importantly, the world’s monetary system is seriously damaged and at risk of coming apart at the seams. That means big changes – and big changes don’t happen overnight, and not without a lot of thrashing about.

Austrian economist Ludwig von Mises wisdom dusted off – a good reminder!

China said to consider gradual rise in gold reserves – shocker! As if they haven’t already been doing this.

Money Is Repositioning for Another Dollar Decline

Postal Service Announces $8.5 Billion Loss – I expect some of that QE2 will go here as the USPostal service continues to lose money.

CPI: Where Are My Zero-Inflation Eggs?

Gap, Wal-Mart Clothing Costs Rise on `Terrifying’ Cotton Prices – Inflation taking hold. Look out below.


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