April 17, 2006

Gold - wow!

I have been skiing the last few days in Whistler, BC, Canada . The last thing I care about is the markets but I really can't help but comment on the markets today.

Gold was up $18 more dollars at $618/ounce today and Silver up over $14. Oil closed over $70 a barrel. All in all, we are witnessing a CONFIDENCE crisis. We don't trust the President, the bankers, the Federal reserve.

We trust poker sites, Cramer, CNBC, Vegas and the Chinese. Sadly, this trend did not develop overnight. Sadly, this will not end well for the majority of Americans.

Over at Chartreuse today - he writes about the expectation pop. The same applies to the stock market. High expectations can rarely be met, leading to a "pop" before the actual news and disappointment following the news. With Gold, no one expects ANYTHING, except for prices to go down like they always have. Of course, they will at some point, but probably after the world starts to think that we are running out!

I have been on this commodity trend for so long that it is hard to write more about the continued strength. Today, the gold strength was accompanied by a smashing of the US dollar. That is something new. Gold has risen on its own the last three months. I have said that the US dollar is due for a further hammering but have avoided the timing of it. Too crowded. I have said and continue to believe that nobody owns gold. Today was another example of how the gold market can explode after a weekend of negative headlines. The market is thin and can spike. I would not chase but am a happy camper today with Newmont up another $3 and all gold stocks flying.

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