Be really interested to know what started the sell off last week. I know Japan did a lot of selling of gold but for what reason?
Dastardly shake out. Deliberate market manipulation I'd say without knowing the facts. I've had a good run from 608 but still feel I missed out big time on the $15 rise as if I lost. There's greed for you. One for the psychologists.
On my previous thread
#90 I mentioned the UN IAEA report on the 21st Feb would significant day but didn't realise what a day.
Additional pieces of geopolitical news which wasn't much in Western media was that Iran had
a terrorist bus bomb explosion and two helicopters brought down - reasons unknown. Also some Sunni tribes apparently led some attacks down South of the country. There are also the buildup of
Kurdish JPAK opposition forces up North East of the country. Not to mention the border with Afganistan and build up of troops there.
Dick Cheyney is doing the circuit trying to muster support around Asia.
US Pilots carrying out low level flying / training exercises.
Talk about missile shields for UK.
Talk about missiles for Eastern Europe with the Russians asking why they are not based around Turkey and Iraq if Iran is the enemy and not Russia.
Israel has asked permission from the US to attack Iran.
They would like air space permission to fly across Iraq. They have also requested use of Iraqi Airfields.
Turkey's chief of staff visited the US saying they are unhappy about terrorists in Northern Iraq and they also would like permission from the US to go in to Northern Iraq.
The Americans would like a referendum in Kirkuk. They are disarming the Arabs arming the Kurds to the hilt. Begs the question why have a referendum in Kirkuk and not anywhere else in the country. Another impending factional fighting to add to the fuel as killings between Sunni's and Shias not sufficient. Probably because Kirkuk has one BIG oil field which has Uncle Sam's name on it.
They will then tell us a big sob story as to how it's not the Iraqis but external countries stirring up divisions in Iraq and we will believe them because the US Administration stands for liberty justice and freedom and is indeed a civilised democracy.
I still hold the view geopolitical tensions one of the biggest reasons for speculative buying of gold for some time.
Coming to the economics, Japan is really supporting the US $ at the moment but for how long. Oil is up, so Feds and BoE inflation going down forecast due to falling energy prices out the window. Another bad set of stats from the US, a rise in interest rates by the ECB coupled with the UK and the $ and Yen really will sink lower further adding to inflationary pressures. China is trying to reign in excessive growth too. Hence the fall in $ will add to rise of gold.
Even if geopolitical tensions die down, the economic growth, inflation and interest rate factors make gold are safe bet for the time being.
I have mentioned many times about the $ and the Fed not really acting on inflation. The Fed as well as the BoE have manipulated the way the indexes are measured. What's the point of having a basket of goods for benchmarking/indexing if you keep changing your basket of goods. What is the point of taking energy out of this basket if it is a significant expense and in particular it is precisely energy prices that is going up? It is unbelievable.
There was much talk about Greenspand and tax cuts. I suspect it's now a case of Republicans elections and not wanting the interest rates hiked to spur on the economy. Who can blame the politicians... As Former US Secretary of State Madeleine Albright says the war in Iraq will go down in history as the worst disaster in US foreign policy coupled with a retarded economy. With elections due that is what I really call a double whammy.
In the short term I can't see gold falling below 660-655 where it picked up from the other day and as before given all this mess I feel gold can still go higher unless the above scenarios change for the better. I'll be looking to trading gold again but using hourly charts to pick out shorts and longs and hoping to stick with a long position raising my stop limits when the opportune moments rears it's head.
I think next week in particular Tuesday with US home sale stats is likely to be significant to the gold price.
