Friday, May 20, 2011

Procrastination or Patience?

10:26 am (Hawaii) Perfectly happy to stay in idle today. Not.

Spot Gold stayed up after that early explosion and is at 1512. The result? Gold bullion is higher, of course. I spent at least an hour yesterday poring over coin and round prices, gold and silver, and opted to pass. To punt. To wait. Even though my sense was (and still is) that gold has to go up after the recent near-term bottom. Global demand cannot be tempered. I may still get a little physical gold today.

Spot Silver has stuck at 35 flat after that early dip. Read Brother Turd for the near and longer term probabilities. I can't rule out the possibility that today's prices in PMs were affected by equity options expiration, and that prices return to "normal" on Monday. If Spot Gold goes back to 1480 and Silver drops back to 33-34, my patience will be rewarded. But the longer Silver consolidates, the chances of a drastic pullback to 30 or below become less likely.

• Golden Inferno? Is physical worth buying here if Spot Gold is gaining global demand momentum again? Probably. It's 55% probable to me. 

• Sterling opportunity? Is physical silver worth buying here with the new range established between 34 and 35.50? The establishment of the gold futures instrument in Hong Kong is a factor, but has its restrictions. It's 50-50 in my view whether or not to get more physical silver at 35. 

• Book 'em, Danno. Takeovers like Liberty Media's offer of to Barnes and Noble of $17 ($3 over Wednesday's price) is an eye-opener. If that much cash is going to start flying around in M&As, the market can't be dead and about to fall over the cliff. Right? 

• Fool's gold. Not the physical, but the crazy cash that chased LNKD up to 120. Even at 93, LNKD's run may not be done because of the lotto mentality that jumped out of the bleachers and onto the playing field yesterday and today. 

XG finished the day above $10, now at 10.17 afterhours. I saw today's gain in most gold plays and XG, but I didn't think it would pop over 10 today. Too much patience? Probably. DGP, the gold 2x etn, is up 2.8%. Junior gold miners etf GDXJ is up 2.2%. 

EXK touched 9 today, but pulled back with Spot Silver and is at 8.83 afterhours. Volatile? Uh huh. AG is the top silver play of the day, up 3.4% to 18.98 afterhours. 

FAZ was hovering above 42 when I woke up 3-4 hours ago. It's now at 43.46 afterhours, near its high. Nobody has faith in the financials. It's probably a prime place to be if QE3 stalls out and is not implemented until late summer. 

LKND and CRM were hot yesterday. CRM stayed hot after yesterday's earnings bonanza and is at 7.9% at 146.50 afterhours, off its high of 149.72.

This is, at least today, just nickel and dime stuff. The real money was made by people who bought gold and silver a year, two years, five years ago. I tend to remember this fact as I'm debating whether to buy physical for the long haul. That's why I'm not afraid of a huge pullback in the PMs. They will recover sooner or later if and when that happens. Comex can fudge numbers (or not), and it doesn't matter. China will buy up gold and silver. Mexico will, also. India. Brazil. They can't be stopped, not by anybody. As earning and buying power improves drastically in emerging markets, gold and silver are in demand. That is one of the few insurmountable facts in this market. Factor in the falling dollar, and central banks are in the game.

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