Should gasoline bulls be able to push price through the chart levels shown, it will portend a move back to the late summer highs of last year. As said in a previous post from last week - PAIN at the gasoline pump is now unavoidable.
Monday, February 13, 2012
Crude Oil back above $100 - Again
Crude oil simply refuses to break down and is once again trading back above the $100 mark. What is perhaps even more concerning is that gasoline prices are now trading above the $3.00 point at the wholesale futures markets, and this is during the time of year in which gasoline demand is generally quite tame compared to the onset of the busy driving season later this spring and summer.
Should gasoline bulls be able to push price through the chart levels shown, it will portend a move back to the late summer highs of last year. As said in a previous post from last week - PAIN at the gasoline pump is now unavoidable.
Should gasoline bulls be able to push price through the chart levels shown, it will portend a move back to the late summer highs of last year. As said in a previous post from last week - PAIN at the gasoline pump is now unavoidable.
Gold holding at initial support thus far
Gold has dropped into the first zone of support noted on the price chart near the $1720 level and has thus far held as dip buyers surfaced. That buying was fostered by a weaker Dollar which was lower in today's session but has not broken down decisively yet below the critical 79 level.
Surging crude oil and gasoline prices did help gold today as some traders are concerned that the rise in energy costs will eventually feed through and impact the price of other goods and services in the broader economy. Transportation costs can only be absorbed for so long.
Surging crude oil and gasoline prices did help gold today as some traders are concerned that the rise in energy costs will eventually feed through and impact the price of other goods and services in the broader economy. Transportation costs can only be absorbed for so long.
Mining company stock owners - note well
Most of you who read this site are well aware of my political leanings - I happen to believe that the current administration is perhaps the most inept, reckless and endangering to liberty in the history of this nation and needs to be replaced at the ballot box this coming November.
Those of you who own mining company stocks should take note that as part of the budget submitted by the Obama administration, all hardrock mining companies would be required to pay annual rents and royalty fees of no less than 5% of gross proceeds.
Currently a law that is 140 years old, exempts them from paying royalties to the US government.
Environmentalists have been after this law for years and have found their champion in the current occupant of the White House.
The rental portion of this budget would impose a fee on for both public and private lands with the funds supposedly being used to clean up abandoned mines. Coal companies are currently under a similiar plan.
Don't worry however - I am completely assured that every bit of the monies raised from this targetted plundering will be put to good use for the American citizenry with absolutely none of it going to cronies of Obama such as Solyndra.
Were it not for the fact that most political analysts expect the Obama budget to be DOA in the Congress, the mining shares would have been sharply lower today. Those of you who own these things are well advised to pay close attention to this. Senator Harry Reid, who has long ago sold his soul to the left's agenda and who hails from a swing state, will probably be getting an earful from mining company executives with any connection to the state of Nevada. I will be surprised to see him actually coming out in support of this proposal if he wishes to run for re-election next time around. Then again, he might be ready to retire by 2016.
Those of you who own mining company stocks should take note that as part of the budget submitted by the Obama administration, all hardrock mining companies would be required to pay annual rents and royalty fees of no less than 5% of gross proceeds.
Currently a law that is 140 years old, exempts them from paying royalties to the US government.
Environmentalists have been after this law for years and have found their champion in the current occupant of the White House.
The rental portion of this budget would impose a fee on for both public and private lands with the funds supposedly being used to clean up abandoned mines. Coal companies are currently under a similiar plan.
Don't worry however - I am completely assured that every bit of the monies raised from this targetted plundering will be put to good use for the American citizenry with absolutely none of it going to cronies of Obama such as Solyndra.
Were it not for the fact that most political analysts expect the Obama budget to be DOA in the Congress, the mining shares would have been sharply lower today. Those of you who own these things are well advised to pay close attention to this. Senator Harry Reid, who has long ago sold his soul to the left's agenda and who hails from a swing state, will probably be getting an earful from mining company executives with any connection to the state of Nevada. I will be surprised to see him actually coming out in support of this proposal if he wishes to run for re-election next time around. Then again, he might be ready to retire by 2016.
Saturday, February 11, 2012
Trader Dan on King World News Weekly Metals Wrap
Please click on the following link to listen in to my regular weekly radio interview with Eric King on the KWN Weekly Metals Wrap.
http://tinyurl.com/87ukomd
http://tinyurl.com/87ukomd
Thursday, February 9, 2012
Gold Continuing to Fail at $1750
Gold has now spiked through the $1750 level several times since the end of last month but has not been able to CLOSE THROUGH this level. Until it does, the market will not be able to start a new leg higher in the uptrend.
Generally speaking, markets tend to pause at resistance levels until they can gather enough of a spark to take them strongly through those or they retreat and consolidate leading to some basing action. During the latter, some of the shorter term oriented bulls will liquidate longs out of frustration or out of a desire to cash in some profits and bank them. That selling then paves the way for some opportunistic short selling to emerge.
We had a combination of both today leading to a pull back in price. Support on the downside remains near $1725 - $1720 with stronger support down closer to $1710 - $1705.
Silver needs to get above $34 and stay there to allow it a chance to test major resistance near $35.00 - $35.25.
Generally speaking, markets tend to pause at resistance levels until they can gather enough of a spark to take them strongly through those or they retreat and consolidate leading to some basing action. During the latter, some of the shorter term oriented bulls will liquidate longs out of frustration or out of a desire to cash in some profits and bank them. That selling then paves the way for some opportunistic short selling to emerge.
We had a combination of both today leading to a pull back in price. Support on the downside remains near $1725 - $1720 with stronger support down closer to $1710 - $1705.
Silver needs to get above $34 and stay there to allow it a chance to test major resistance near $35.00 - $35.25.
CME Group LOWERING margin requirements for Gold and Silver Contracts
Current Initial New Initial Current Maintenance New Maintenance
GOLD $11,475 $8,500 $10,125 $7,500
SILVER $24,975 $18,500 $21,600 $16,000
GOLD $11,475 $8,500 $10,125 $7,500
SILVER $24,975 $18,500 $21,600 $16,000
FOMC impact on the Yen
Note the following chart of the Japanese Yen and you can see the points at which the Bank of Japan intervened into the Foreign Exchange markets to knock it down and lower its value for the sake of their export market. One would be hard pressed to find a reason for the Yen to rally when the Japanese economy is so weak and its official interest rate environment is about as low as that of the US.
Still, the Yen has rallied on "Safe Haven" trades. Whenever traders were feeling risk averse, they would buy the Yen on the crosses along with the Dollar and sell everything else. To put a stop to that the Bank of Japan has twice intervened with rather dramatic results. Unfortunately for them, traders have simply used the intervention to come right back in and bid the Yen back higher basically negating the gargantuan effort required to derail it.
Now comes along the FOMC with its ZERO INTEREST RATE POLICY and it has basically the same impact on the Yen as did the BOJ intervention - it moves LOWER. The reason for this is that the liquidity party is a green light for the risk trades (why else would copper be at a nonsensical $4.00 pound?). In that environment, no one wants to buy the Yen so down it goes.
One has to suspect that the FED and the BOJ are closely communicating these days as the impact of monetary policy is working nicely for both of them as neither one particularly wants to see a strong rally in their respective currency.
Still, the Yen has rallied on "Safe Haven" trades. Whenever traders were feeling risk averse, they would buy the Yen on the crosses along with the Dollar and sell everything else. To put a stop to that the Bank of Japan has twice intervened with rather dramatic results. Unfortunately for them, traders have simply used the intervention to come right back in and bid the Yen back higher basically negating the gargantuan effort required to derail it.
Now comes along the FOMC with its ZERO INTEREST RATE POLICY and it has basically the same impact on the Yen as did the BOJ intervention - it moves LOWER. The reason for this is that the liquidity party is a green light for the risk trades (why else would copper be at a nonsensical $4.00 pound?). In that environment, no one wants to buy the Yen so down it goes.
One has to suspect that the FED and the BOJ are closely communicating these days as the impact of monetary policy is working nicely for both of them as neither one particularly wants to see a strong rally in their respective currency.
Coming Soon - More PAIN at the Gasoline Pump
Unleaded Gasoline prices rallied off their lows with the inception of tensions in the Straits of Hormuz but that has now taken a back seat to the LIQUIDITY PARTY being thrown by the Federal Reserve.
Can we say, "DEJA VU!".
Get used to further pain at the gasoline pump once again thanks to our illustrious money masters who continue to throw both senior citizens and the average citizen under the bus in the name of jamming the stock market higher to supposedly bolster consumer confidence. Yeah, I feel extremely confident - confident that food and energy prices are going to resume their upward march once again thanks to these bozos.
Wait until you see beef and pork prices later this spring and summer. You ain't seen nuthin' yet!
Can we say, "DEJA VU!".
Get used to further pain at the gasoline pump once again thanks to our illustrious money masters who continue to throw both senior citizens and the average citizen under the bus in the name of jamming the stock market higher to supposedly bolster consumer confidence. Yeah, I feel extremely confident - confident that food and energy prices are going to resume their upward march once again thanks to these bozos.
Wait until you see beef and pork prices later this spring and summer. You ain't seen nuthin' yet!
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