Wednesday, August 3, 2011
12:49 pm (Hawaii) A quiet day for me, mostly working on the road, off the computer. I did see silver pop in premarket. AGQ moved up from 223 to 227, sold off, then bounced back before the opening bell. Last I saw, it was at 230 before the closing bell. Quite a run for silver, not totally unexpected. I just didn't have the guts to step back into AGQ even though every indication told me that it was going higher. The late-March run after consolidation is very similar to this stretch, as I mentioned in an earlier post.
So, is AGQ poised for another run to 382? I can't say no. The fundamentals behind silver and gold are stronger than ever. The awareness of precious metals as a store of value and/or real money has spread to a greater audience. More and more central banks are, well, banking on gold as the US Dollar falls on its face. I am tempted more than ever to chase physical and paper gold and silver at higher levels.
Spot silver is 41.60 at last check and spot gold is off its 1674 all-time high, now at 1661. It needs a breather and time to consolidate, but as Brother Turd Ferguson noted, there's nothing to stop gold from soaring to 1700 and 1800 without a pit stop.
I thought about buying more gold two Sundays ago. Then again this past Sunday. But like a lot of people, I waited for a pullback and it never really came. There was a minor drop on Monday, but once the debt-ceiling deal was nearly official, that was it. The market hit skid row and PMs blasted higher. So, thumbs up to the dollar-cost averaging buyers of physical. When in doubt, average in, no worries about perfect timing. I could've added physical gold at 1600 and 1640 or so. I won't be shocked if it pulls back to 1625 at some point, but I really don't expect it.
Who knew that South Korea (and Thailand) would be the real catalyst? I say that only half in jest. Whatever margin requirement hike(s) may be coming from the CME mafia for gold, they will be utterly temporary, tiny speed bumps for hungry, pent up global forces that are sick and tired of weakass US debt (dollars). The lion has been unleashed.