Gold Surges to New Record Highs: Media Is Apathetic

Gold: As the dollar came under increasing pressure yesterday, gold surged to fresh highs, breaking through two levels of resistance ($1,020/oz and $1,033/oz) and is currently trading at $1,047/oz.

As we have seen in the recent past, such huge upward moves in the gold price usually precipitate a bout of profit taking. With no resistance now facing gold, resistance will come from the psychological levels of $1,050/oz and $1,100/oz.

However, the anticipated profit taking may not materialise and this time it could be different as the price moves brought in fresh investors, as they were hedging not against short term dollar moves but hedging against the long term risks challenging the future of the dollar and other paper currencies. Many investors were waiting for gold to have a higher record daily close prior to entering the market. Many of the same analysts who have been bearish in recent years remain bearish with some continuing to call gold a “speculative bubble”.

The record highs have not been greeted by fanfare in the media with much of the media actually not reporting the new record nominal highs. Thus, gold continues to climb a wall of worry in typical bull market fashion and there is no 'gold rush' and no 'mania' that is typical of speculative bubbles.

Silver: Silver gained over 4% and is still rising. It is currently trading at $17.45/oz.

Platinum Group Metals: All the PGMs gained on the back of the yesterday's news, especially palladium which is close to recovering 50% of its losses from last year. Platinum is $1,333/oz, palladium is $314/oz and rhodium is $1,575/$1,675/oz.

Disclosure: no positions

Comments

[Boot:]

Thanks for the article. Yesterday afternoon I saw some profit taking going on in both gold and silver explorers and producers, large and small. Question is will those who took profit regret being quick on the trigger. I agree that there is much more upside with fundamentals as they are. Aside: The COMEX must be having a rather unpleasant week. Boot

Oct 07 07:55 AM

[Mad Hedge F...:]

ons Of course you knew it was going to happen like this. After churning around just below the old high, and sucking in as many profit takers and short sellers as possible, gold blasted through to a new high for the year of $1,038. Never mind that the triggering event is complete balderdash, a story in Britain’s Independent newspaper asserting that the Middle East is holding secret global talks to price crude in the yellow metal or other currencies (click here ). It didn’t hurt that Australia cut its interest rates by 0.25%, the first G-20 country to do so. There probably isn’t enough gold in the world to finance more than a few weeks of global oil production. Total gold holdings would only fill two Olympic sized swimming pools. But never let the truth get in the way of a good trade. The confirming moves couldn’t be more ubiquitous, with the Canadian, New Zealand, and Australian dollars all up big, commodities strong, and silver also going ballistic. Regular readers will all recognize these as old friends of mine, core longs that I have been strongly recommending since the beginning of the year. I have been trying to get investors into gold since it was at $800. If you aren’t in gold by now, I can only tear my own clothes and flagellate myself for my abject failure to convince you of gold’s merits. US government debt is exploding, and with foreigners holding a large part of our paper, the only way to get out of this mess is to devalue the dollar. It’s like Obama invited China’s president Hu Jintao to dinner at an expensive Upper East Side restaurant, fakes a sudden case of food poisoning, leaving him with a big fat bill. Next stop $1,200, then $1,500, then the old inflation adjusted high of $2,400. If you want me to help you get set up to trade futures in any of this stuff, please email me at madhedgefundtrader@yah... If you want to know where to buy physical gold and silver in size, or coins with the tightest spreads over spot, check with the experts at www.millenniummetals.net by clicking here.

Oct 07 08:05 AM

[yellowhoard:]

CNBC made sure to exclaim that the price of gold is a "nominal" high.

Adjusted for inflation, it is still far from it's 1980 highs.

It's funny, I never hear them talk about the inflation adjusted price of the DOW or S&P.

Oct 07 08:28 AM

[JAMES CARLINI:]

Yellowhoard
I watched that segment too and was surprised they did the "inflation-adjusted" view.

They should do the same for salaries and the costs of various goods then as well.

Oct 07 08:54 AM

[D. McHattie:]

Had they paid more attention to the inflation adjusted value of real estate people might not have been as keen to participate in the housing bubble too.

Gotta love those investment 'experts' on CNBC.


On Oct 07 08:54 AM JAMES CARLINI wrote:

> Yellowhoard
> I watched that segment too and was surprised they did the "inflation-adjusted"
> view.
>
> They should do the same for salaries and the costs of various goods
> then as well.

Oct 07 09:55 AM

[Pozzdonn:]

I stopped watching and listening to the mainstream about the time women started entering the dressing rooms of the NFL and complaining that they were being harassed. Big dumb jocks and hot-bodied women in the same intimate space? Well... duh.

I get my news online, and most of it I read. Twain was credited with saying: "The man who does not read good books has no advantage over the man who cannot read them." Turn off Farnsworth's tube and read something.

Oct 07 10:01 AM

[Maxe Paul:]

The media is apathetic because most people are not American, the American dollar is piss weak, but do i care? The Aussie dollar is up near 50% since it's lows, slightly more than gold BTW.

It's a waste of my time buying gold in US dollars, only to change it back to Aussie at a loss after gold has gone up.

America is not the centre of the universe, it once was, but it's not now, if i was living in the US i would also be loving gold i think, but maybe people should consider that not everyone cares what the gold price is, or where it's going.

Hope that makes sense to gold bugs, i highly doubt it though.

Oct 07 10:12 AM

[Burticus:]

In the last two weeks, gold price has set new records, all over 1,000 FRNs, for weekly close and monthly close, and yesterday daily close and intra-session high.

Gold is the barking watchdog or blaring burglar alarm, warning the sheeple that the paper/electron currencies are hastening their inevitable death march to the fiat graveyard, then fiat Hell.

Our central bankster crime syndicate masters and their political & Wall Street minions are completing their looting and destruction of America and the middle class in preparation for a communist totalitarian new world order.

"Resistors" preferring our founding fathers' vision of a free-enterprise economic system under the rule of law in a republic should check out the NWO police state storm troopers at G20 in Pittsburg, making Der Fuhrer's brown shirts look like patsies. Goose stepping menacingly toward The People, clocking their truncheons against their body armor 35 seconds into the video.

www.youtube.com/watch?...

Says one kid, "Intimidation techniques...nice!"

Disclosure: Long physical silver & gold, CEF, steel, lead, food and 3/4" Manila hemp rope.

Oct 07 11:13 AM

[Francis Sch...:]

This is static about Gold breaking into news highs expressed in poor US dollar terms...Months ago this scenario was seen for gold in Canadian and for Gold in Swiss franc. Levels for the Swiss franc were different, but charts look similar.
We're en route for a new top expressed in Dollar and once Gold expressed in Euro, South African Rand, Aussie, Swiss franc, etc..break out again of the consolidation built over the past months, they will just add momentum to the upswing.

Oct 07 11:43 AM

[Arthur Hau:]

Quite to the contrary of the claim in this article, Bloomberg just had several interviews with some self-acclaimed analysts from some ibanks yesterday and today!

Yeah, right $1500 a troy oz. Get real, even toilet paper is more useful than gold. So should the price of toilet paper rise to 2.5 times its production cost? Toilet paper is a good hedge against inflation and an even better hedge against climate change! :-)

Come on, these ibankers have just create a sufficiently large "dream margin" for blind speculators to dream their good dreams.

Remember what most ibanks had predicted when DJI was 14000? They wouldn't say it would rise to 14500. Instead they said 18000!

Remember what most ibanks had predicted when crude oil price reached $150? Not $160, but $200!

When ibankers start to yell using their big mouths, it is time to pull out!

Oct 07 12:06 PM

[yellowhoard:]

As a "gold bug", I get your argument.

If I were an Aussie, I'd be right there with you content to hold a sound currency. Although I'd probably still own some gold for insurance.

As a matter of fact, I've held FXA since March and I'm thinking about selling, but I have to factor in the tax consequences.


On Oct 07 10:12 AM Maxe Paul wrote:

> The media is apathetic because most people are not American, the
> American dollar is piss weak, but do i care? The Aussie dollar is
> up near 50% since it's lows, slightly more than gold BTW.
>
> It's a waste of my time buying gold in US dollars, only to change
> it back to Aussie at a loss after gold has gone up.
>
> America is not the centre of the universe, it once was, but it's
> not now, if i was living in the US i would also be loving gold i
> think, but maybe people should consider that not everyone cares what
> the gold price is, or where it's going.
>
> Hope that makes sense to gold bugs, i highly doubt it though.

Oct 07 12:11 PM

[ETFdesk.com:]

Interesting divergence of views here:

Gold off the charts and heading to $1,500 says BarCap ( www.etfdesk.com/headli... )

Jim Rogers wary of buying gold at new high ( www.etfdesk.com/headli... )

Oct 07 12:19 PM

[Mayascribe:]

Barclays says gold going to $1500? How much did they buy yesterday?

Oct 07 12:50 PM

[Arthur Hau:]

Suppose gold rises at a rate of $10 a day. By the time it reaches $1500, it will take at least 45 days.

But look at the trade volume today. At this kind of thin volume, it is already a miracle to have a $5 rise at this record high price. At this rate, it will take 90 days to reach the big-mouth-claim of $1500 by Barclay!

Wait, it is very likely that there is an interest rate raise by the European Central Bank at the beginning of next year. That is, there is only about 2.5 months (75 days) left.

Time is running out for the bulls to paint their rosy picture and to tell their happily-ever-after story!


On Oct 07 12:50 PM Mayascribe wrote:

> Barclays says gold going to $1500? How much did they buy yesterday?

Oct 07 03:04 PM

[tripleblack:]

The shallow depth of the market pool has been bothering me for a while.

The strong demand for Treasuries is also disturbing, if one is contemplating equities OR commodities.

BUT that shallow volume really can create big moves, even from no real solid news, change or motivation.

Oct 07 04:40 PM

[Laurence Hunt:]

When gold broke out, I actually went looking for headlines to see what was in the news. I had to go to the dedicated gold sites to find anything. We are nowhere near broad adoption. The present postings make clear that skepticism abounds. However, simple technical analysis tells us that we have an 8-year uptrending channel, and nothing on the horizon to reverse its direction.....

The same dearth of news was in evidence when gold broke through $800. My own observations are here:

laurencehunt.blogspot....

Oct 08 03:29 AM

[nobby73:]

Thin volume? Are you talking about physical, futures or ETFs.


As for the ECB raising rates, dream on. Not with low inflation, sticky unemployment, worsening loan losses and a weakening Dollar.


On Oct 07 03:04 PM Arthur Hau wrote:

> Suppose gold rises at a rate of $10 a day. By the time it reaches
> $1500, it will take at least 45 days.
>
> But look at the trade volume today. At this kind of thin volume,
> it is already a miracle to have a $5 rise at this record high price.
> At this rate, it will take 90 days to reach the big-mouth-claim of
> $1500 by Barclay!
>
> Wait, it is very likely that there is an interest rate raise by the
> European Central Bank at the beginning of next year. That is, there
> is only about 2.5 months (75 days) left.
>
> Time is running out for the bulls to paint their rosy picture and
> to tell their happily-ever-after story!

Oct 08 03:40 AM

[Southboroug...:]

Apathetic media coverage on Gold's move....come on. You're kidding right? Paper, Web, Radio....it's all I'm hearing.

I think I'll become a Sugar bug and post on the conspiracy and apathy of the media.

Oct 08 06:03 AM