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Some extract from Kaplan's newsletter probbaly suggesting gold is going to be bearish!
"This is update #541 for Friday evening, January 4, 2008.
The U.S. dollar index fell sharply after the U.S. unemployment report was initially announced, but it later recovered more than 3/4 of its losses to officially settle modestly lower. Then, after the official settlement time, it continued to move higher in the late afternoon and early evening, so that the U.S. dollar index closed trading with a small net gain on the day. (Many futures contracts settle one or more hours before the stock market closes for the day.)
Historically, the U.S. dollar usually rises substantially during any global economic slowdown as it becomes a perceived safe haven from declining equities and commodities. This process has been slow to develop in recent months, since there remains a foolish but very popular myth that the rest of the world will somehow continue to enjoy double-digit growth even with the U.S. economy heading into likely recession within a few months. As this fairy tale is inevitably smashed, the U.S. dollar index will respond by rallying for most or all of 2008.
The traders’ commitments for all commodity-based currencies, including the Canadian, Australian, and New Zealand dollars, deteriorated during the past week.
In general, the pathetic recent performance of these currencies, which usually surge energetically whenever commodities are rallying, probably indicates that the January 2-3, 2008 upward spike in commodities was a two-day fluke rather than the beginning of a sustainable trend.
Today, all of the above currencies gave up several trading days’ worth of gains in a single session. If the U.S. dollar index had been based solely upon these currencies, it would have enjoyed a powerful net gain in today’s trading.
The U.S. unemployment report showed various non-cheerful data such as only 18 thousand new jobs being created in December 2007, the unemployment rate rising from 4.7% to 5.0%, wages rising 0.4% in the past month and 3.7% year-over-year, etc.
Commodities and their shares were mostly lower. HUI, the Amex Index of Unhedged Gold Mining Shares, fell to an early morning low of 439.35 before closing down 5.56 at 443.75. GDX slid to a mid-morning bottom of 49.28 before closing down 84 cents at 49.90.
Gold’s traders’ commitments saw commercials adding 16,881 contracts to their already oversized net short position, thereby yielding a total net short position of 238,412. This is notably bearish. It should be kept in mind that the traders’ commitments are not a short-term timing tool; they don’t tell you when the price is going to move, but they let you know that once it begins to go in the direction that the commercials favor””in this case, lower””how many speculators’ stop-loss orders will be triggered on the way to its final extreme. Therefore, you can tell pretty accurately how far gold will plunge, once its move gets underway in earnest. In this case, the final low for gold bullion is likely to be modestly below $700 per troy ounce, perhaps in the spring.
Silver’s traders’ commitments also noticeably worsened, with commercials adding 4,079 to their net shorts to yield a total net short position of 56,498 contracts.
The traders’ commitments for crude oil showed commercials increasing their net short position by 34,382 contracts to a total net short position of 85,087 contracts. This is a somewhat bearish development. The traders’ commitments for crude oil do not have nearly as powerful a predictive ability as they do for gold, silver, or U.S. Treasuries.
The XAU/spot ratio is equal to 186.23/860.25 or .2165. Wait patiently for this ratio to go below .19 before purchasing your favorite gold mining shares and funds including GDX."
Always do your own research (DYOR)
"This is update #541 for Friday evening, January 4, 2008.
The U.S. dollar index fell sharply after the U.S. unemployment report was initially announced, but it later recovered more than 3/4 of its losses to officially settle modestly lower. Then, after the official settlement time, it continued to move higher in the late afternoon and early evening, so that the U.S. dollar index closed trading with a small net gain on the day. (Many futures contracts settle one or more hours before the stock market closes for the day.)
Historically, the U.S. dollar usually rises substantially during any global economic slowdown as it becomes a perceived safe haven from declining equities and commodities. This process has been slow to develop in recent months, since there remains a foolish but very popular myth that the rest of the world will somehow continue to enjoy double-digit growth even with the U.S. economy heading into likely recession within a few months. As this fairy tale is inevitably smashed, the U.S. dollar index will respond by rallying for most or all of 2008.
The traders’ commitments for all commodity-based currencies, including the Canadian, Australian, and New Zealand dollars, deteriorated during the past week.
In general, the pathetic recent performance of these currencies, which usually surge energetically whenever commodities are rallying, probably indicates that the January 2-3, 2008 upward spike in commodities was a two-day fluke rather than the beginning of a sustainable trend.
Today, all of the above currencies gave up several trading days’ worth of gains in a single session. If the U.S. dollar index had been based solely upon these currencies, it would have enjoyed a powerful net gain in today’s trading.
The U.S. unemployment report showed various non-cheerful data such as only 18 thousand new jobs being created in December 2007, the unemployment rate rising from 4.7% to 5.0%, wages rising 0.4% in the past month and 3.7% year-over-year, etc.
Commodities and their shares were mostly lower. HUI, the Amex Index of Unhedged Gold Mining Shares, fell to an early morning low of 439.35 before closing down 5.56 at 443.75. GDX slid to a mid-morning bottom of 49.28 before closing down 84 cents at 49.90.
Gold’s traders’ commitments saw commercials adding 16,881 contracts to their already oversized net short position, thereby yielding a total net short position of 238,412. This is notably bearish. It should be kept in mind that the traders’ commitments are not a short-term timing tool; they don’t tell you when the price is going to move, but they let you know that once it begins to go in the direction that the commercials favor””in this case, lower””how many speculators’ stop-loss orders will be triggered on the way to its final extreme. Therefore, you can tell pretty accurately how far gold will plunge, once its move gets underway in earnest. In this case, the final low for gold bullion is likely to be modestly below $700 per troy ounce, perhaps in the spring.
Silver’s traders’ commitments also noticeably worsened, with commercials adding 4,079 to their net shorts to yield a total net short position of 56,498 contracts.
The traders’ commitments for crude oil showed commercials increasing their net short position by 34,382 contracts to a total net short position of 85,087 contracts. This is a somewhat bearish development. The traders’ commitments for crude oil do not have nearly as powerful a predictive ability as they do for gold, silver, or U.S. Treasuries.
The XAU/spot ratio is equal to 186.23/860.25 or .2165. Wait patiently for this ratio to go below .19 before purchasing your favorite gold mining shares and funds including GDX."
Always do your own research (DYOR)