Bullish Long Term Gold Sentiment Continues

Gold: Gained nearly 0.5% yesterday as it continues to track the fortunes, or lack thereof, of the dollar. It is currently trading at $953.30. Very strong support is showing at $935 with resistance still looking to break the magic $1000 level.

With production out of the third largest producer in the world, South Africa, back at WWI levels, the bullish long term sentiment continues.

Silver: Was the star performer yesterday, rising 2%. It closed at $15.21. Strong support is showing at $14.75 but silver hates to conform and therefore a break through resistance of $15.63 would not be entirely unpredicted.

Platinum: More than 27,000 ounces flowed into the ETF Securities backed fund this week, compared to only 2400 ounces last week. Platinum is still slightly directionless currently trading at $1,267, support is at $1,200 and resistance at $1,300.

Rhodium: Currently trading at $1,425/ $1,525.

Jobs data is being released later today in the US, with markets looking for direction from the figures.

Disclosure: No positions

Comments

[Mad Hedge F...:]

For sure. Brace yourself for the impending gold shortage. Gold shortage? Yup. Last year, South Africa suffered its steepest decline in gold production since 1901, falling 14%, to a mere 232 tons. It now ranks only third in global production of the yellow metal, after China and the US. Severe electricity rationing, a shortage of skilled workers, and more stringent mine safety regulations have been blamed. Choked off credit has frozen the development of new capital intensive deep mines, as it has for everybody else. Rising production costs have driven the global breakeven cost of new gold production up to $500 an ounce. In the meantime, the financial crisis has driven flight to safety demand for gold bars and coins to all time highs. Last year, the US Treasury ran out of one ounce $50 American Gold Eagle coins, now worth about $980. Competitive devaluations by almost every central bank, except Japan, mean that currencies are not performing as the hedge that many had hoped. It all has the makings of a serious gold shortage for the future. Could last year’s downturn be a blip in the eight year bull market? When we break $1,000, which could happen any day now, watch out above!

Jun 11 10:31 AM

[Donald Ingram:]

Mad HFT - Totally agree.
Also there is some disagreement about China's production. Some say that the amount mined is falsely inflated so as not to alarm world markets and cause a severe rise in prices. Since China has gained most of it's gold increase on the world gold markets in the last eight years, by slowly soaking up central bank offerings.
Further, there is some concern over the amount of physical gold held by ETFs versus the number of certificates issued!
Old Mother Hubbard went to the cupboard.....

Jun 11 11:38 AM

[Donois:]

Hey Donald. I'm own IAU. Would I be better off with GLD given your comment about ETF gold holdings and certificates sold? Or is there a better way to profit from the coming rise in gold prices?
Thanks,
Don


On Jun 11 11:38 AM Donald Ingram wrote:

> Mad HFT - Totally agree.
> Also there is some disagreement about China's production. Some say
> that the amount mined is falsely inflated so as not to alarm world
> markets and cause a severe rise in prices. Since China has gained
> most of it's gold increase on the world gold markets in the last
> eight years, by slowly soaking up central bank offerings.
> Further, there is some concern over the amount of physical gold held
> by ETFs versus the number of certificates issued!
> Old Mother Hubbard went to the cupboard.....

Jun 11 12:14 PM

[robfromorlando:]

Any thoughts, opinions on SLV's direction, or silver in general?


I've been hearing/reading some rumors of nearing $25 an ounce as the economy s l o w l y rebounds.

Jun 11 06:07 PM

[chux08:]

"Any thoughts, opinions on SLV's direction, or silver in general?"


Yes....up in a general sense. While GLD & SLV have great liquidity & market recognition, I'd only consider those for short term trading....REAL short.

If I was looking for an "investment" instead of a short term trading vehicle, for silver it would be (CEF) and for gold it would have to be (GTU) hands down. Well known, well run, long lived and above all else.....SAFE.

www.centralfund.com/
www.gold-trust.com/

Jun 11 10:53 PM

[Rene Cohrt:]

With total chaos in sight what else than gold and silver

Jun 12 08:58 AM

[HATEFEEBAY:]

I am 100% silver for metals, but looking more into gold. Great article and comments! Thanks

Jun 12 09:06 AM

[Donald Ingram:]

Donois - Sorry for the delay in getting back to you.
Speaking ONLY for myself, I hold physical gold and silver. Some of the junior gold and silver mining stocks look especially promising.
I would not trust precious metals ETFs. After all, it is just a paper promise, just like a dollar bill is!


On Jun 11 12:14 PM Donois wrote:

> Hey Donald. I'm own IAU. Would I be better off with GLD given your
> comment about ETF gold holdings and certificates sold? Or is there
> a better way to profit from the coming rise in gold prices?
> Thanks,
> Don

Jun 12 12:23 PM