2010.07.03 Without question, gold bug's stomach get a heavy blow this week. It is down U$35 on June 30. Is it the worst NYMEX end of day close? No. March 19, 2008 was U$59 followed by Feb 4, 2010's U$49 and etc. So this is not the worst. It may be comfort to know that in the last few years, there are gold price rally 2 U$70 and 3 U$40 in a day. The volatility is to stay. Lets focus on the USD. The USD falls and gold falls in sympathy. This is illogical. But why things have to be logical now? The relationship entanglement is so complicated, complexity theory may be the only way to analyze them. So far there is no turning for the gold and USD 200MA. So we should assume the strange strong gold and strong U$.

2010.06.25 Gold is in stealth rally again. It creeps back to the U$1250 range as soon as USD shows the weakness.

2010.06.18 This is a critical week for gold. It continues its rally and continues to make new high. Platinum and silver are rebounded. Is this the effect of a weak U$? The chart above tells the story. Gold goes up quite independent of U$. Conversely, U$ weaken as gold pop up. During the second half of the week, gold continues the rise and the U$ just free fall. Now U$ is gone back to the red zone, two things could happen. First is continue the upward movement in the red zone. The second, which I believe will happen, is broke down below the red zone to continue the fall and create another new trend line. The critical level of support will be at 80. However, if the second option is right, the 200MA has not shown anything YET.

2010.06.12 The USD has exhibited the classic quantum mechanic property: all go by probability. If there is a probability to happen no matter how low, it will. The true cause of these violent movement could be contributed to two major factors: wall of volume and retail investors. When there geopolitic or ecopolitic risk appears, the currency moves in and out of U$ which does not reflect the true value of the U$ but the demand of payment. Gold on the other hand does not create such a chaos because either low attention of the investors or smart buy. GLD reflects the demand and supply of retail and to some extend the institute investors. Real bullion investors will purchase the metal and holding it directly through either the mint or through supplier. The holding in GLD is for rapid trading which should not be seen as investment. The gold and silver prices are now in a steady rising trend. Gold's bottom head and shoulder has been realized to a steady up trend. Silver's bottom head and shoulder is yet to be implemented and it has a good chance. The chance improves demonstrated by the continuous bounces up above the 200MA.

2010.06.05 The big event for this week is gold recapture U$1,200 while USD challenge 89. This is unheard and unbelievable in the past. Whether gold is a safe heaven or not, the long and the short on gold are fighting ferociously. At the same time, the worry of inflation and deflation worry grows. Gold has the perception that can store value in both situation could pushes demand. Actually, it is not necessary gold, anything that could not be created out of thin air and with sufficient supply to store the wealth is just as good. The USD broke 88 without stopping for a heart beat on Friday was scary when the stock market had a mini-crash. The selling pressure of stock for USD is obvious but why. All bad news (PIIGS problem) is well know. The multi-directions detachment of the Eurozone is working. IMF will patch it up by more liquidity. The instability will lead to social disruption like the Great Depression but this time it is overarching the American and Eurozone. Can the rest of the world escape? May be a minor way as the internal demand for the BRIC is growing rapidly, not to mention African. Technically, the rally of gold is steady and rally of USD just gone parabolic which could be dangerous. All in all, it looks like gold is a better bet.

2010.05.28 Without question, USD is strong in technical. As far as fundamental is concern, it is not going to become weak until a major collapse in one of the financial institute, the U$ will be strong relative to all other major currency such as Euro and Sterling. But the most important is that gold remains very strong. Gold in U$ and C$ make all time high. This is very gold bullish.

2010.05.21 Prices of gold in U$ has pulled back from the peak by U$70. The C$ gold price peaked last December and now is about C$50 from the peak. While U$ gold price is down but the trend aligns with the C$ gold price. The most important event of the gold price is not much change. A pull back of U$70 is just about 5%. All thing consider, it is good to have a minor correction when USD is so strong. However, we have to consider what does it mean when the gold price continues to pull back in U$ when the USD has a sharp pull back. In just 3 trading days, USD drops from 87.11 to 85.46 (-1.89%). It may sound not much but the develop of such situation is just as rapid as the USD rally. In contrast, gold price is a persistent and much slower pace and it is in the unexpected direction, going up along with the USD. The conclusion is that gold is just in a normal trading action mode that continues to detach from USD.

2010.05.14 Gold is not strong. Gold is just making a 20% advance since February this year. In comparison the the stock market, the movement is mild. But the technical of gold did not form the right shoulder of the bottom H&S tells a strong bull trend for gold. Silver does not back off much even under major selling pressure after making a new high. USD high 86 is unbelievable. The market is being ambushed by the USD.

2010.05.07 Precious metals are not in sympathy with the stock market. It is strong and holding up well. We can conclude precious metal is pretty much detach from U$ but subject to market fluctuation. This precious metal bull will be interrupted as the general market deteriorate. Thanks to the margin clerk. GLD-N has the OBV turning down. SLV remains up. But all in the mercy of the bear.

2010.04.30 The gold price has been diverging from the USD. The gap is not slightly but meaningfully moving in separate directions. This happens when U$ has become a very strong currency against its major currency basket. Money is not just moving from one place to other. Gold and U$ are becoming option of storage of wealth. With the rising gold trend, you can conclude that it is a subtle change of mentality that gold is even more prefer than U$. This has been confirmed by the demand in the OBV. The gold future has carved out a bottom head and shoulder. The current price has better the left bottom. This could either develops a right shoulder or gone through the base. Either will be bullish.

2010.04.24 Greek or PIIGS financial crisis does not create the gold panic buy. But the rush out of Euro to U$ does not pushed down gold either. From the Gold / U$ chart above we can easily identify the pegging of gold and U$ (actually to the basket of world currency) is dissolving. The effect of lower world currency pushes up the U$ but not necessarily the gold price. The higher U$ is now not a sure indicator for lower price which hints strongly that the demand is way beyond mitigating the lower U$. It has its own vector of values. The trend is the friend so far but the volatility is high can could be persistent during any up or down swing. These swings are now not just caused by supply and demand for consumption but also supply and demand for speculation. The later supply and demand equation does not have any physical delivery. The tide could only turn when the bull and bear speculator decides the champion in one battle. Retail investor could easily becomes the collateral victim under cross fire. So far all the negative indicators are dissipating.

2010.04.16 The PIIG progression continues to Portugal. U$ is in demand. But a drop of 2% does not translate to a change of trend based on the 200MA of the gold price. But the U$ remains very strong until the 200MA says not.

2010.04.09 Gold and precious metals' detaching from U$ is getting more obvious. The strong U$ (relative to GBP and Euro) does not tarnish the gold and silver. Part of this may due to short covering. As this week's trading volume returning to the 200 VA (volume average), the rally slows down but steady. Next week will be interesting when Greek's financial drama settles down.

2010.04.02 USD is definitely the centre of all conversation this week. It is not just because it broke the 82 to interday of 82.19 but it also drop below 81 which has been established as a strong resistance. After 5 trading days of down, there may be a dead cat rebounce for the USD. How high will it go? It may be reflected by the price of gold at U$1120. This is not a lot of confident in the gold price. Silver and platinum get much better confident that they all rise nicely. It is not necessary to have a short term favour in gold.

2010.03.26 USD broke 82 this week and retreated to 81.63 by Friday. The strength scarce a lot of precious metals bull. The prices fall but the OBV indicates sell off is light. This is a good sign. But all the financial turmoil should push up the precious metal. This is also a weak sign. Conventional wisdom does not work anymore.

2010.03.19 Silence is gold, is silver.

2010.03.13 Precious metals perform differently. Gold is relatively underperform, it is down 3%. Platinum up 2%, silver down 2%, palladium down 2%. All these happen when USD slides from 80.46 to 79.81 or 0.8%. As commented in the Gold USD charge, the relationship between the U$ and gold (precious metals by implication) is dissolving. To U$ factor will be getting soft and not as rigid as before. The price of precious metal is now sitting on a top. Potentially a correction may come but gold has already down 10%. There were a few attempt to break the temporary resistance at U$1,120 and continued to failure. This is a top. However, examining closer, we could make out a H&S bottom. If the attempt to break U$1,120's failure becomes a base formation than we are safe for the meantime. Platinum is simpler. It continues to recover almost in straight line to U$1,629.20 and almost better the recent high of U$1,630 on 19 Jan 2010. Silver continues it recovery after risen above the 200MA. Judging from the volume, gold and silver continue to suffer sold off while platinum continue to be accumulated. If gold and silver representing the wealth storage which is not being considered as safe heaven and platinum represent industrial demands then we are going to see a recovery of economy with more stabilized money market environment. How will the inflation factor play in this factor? Base metals are continue to rise so the inflation is by no means at rest. Gold should rise. But gold may be ahead of itself by advance well above the 10% of 200MA and now is still 6% above 200MA with 1% below the 50MA and 100MA. Should gold do not pull up above the 50MA and 100MA we may see a breakdown below the 200MA to retest U$992. In conclusion, the market does not give any clear signal because gold and USD are both down.

2010.03.06 USD's strength is half artificial and half influenced by the weakness of Western economic. With weak £ and €, the strength of the A$ and J¥ have not been reflected due to the smaller weight of these currencies. Without the counter balance, the prices of commodities has just exploded. It is not just gold, silver, palladium and platinum rally, so do base metal which has gone up about 1.5 - 5% just this week. The most compelling indicator is nickel which is up 5.8%. Nickel is the essential component of stainless steel which supports growth economy which is also confirmed by copper's 4.25% despite of 5 year high inventory at LME.This will lead to the important question of how long will the inflation shows up.  Once this vicious spiral started, it will be hard to stop. However, the chart shows that there is shorting of GLD which will be the damping factor of gold rally.

2010.03.03 Gold has broken the short term resistance of U$1,120 to U$1,130 level this morning. WTI has been flirting the above U$80 level and beaten down many time and rises again. Today, the press continues with the USD pulling back slightly. Any slight weaken of USD will mean very little to the WTI price because now is all speculation on the demand of oil. With the news Greek cutting spending and increasing tax, hope has created. But this could be sell on news type of event. Updated at end of day: WTI closes above U$80 and tops U$81 before falls back. This is rare because the WTI rises before the EIA number which is not usual. However, we should take consideration with the sudden strength of EURO that weakening U$. U$ should be weaken but the strength of Euro is just speculation before Greek meets Germany and France. We could expect a sell on Euro which could boost U$. Along the similar vein, gold advances above $1,140 at the evening which could set the stage to recover the U$1,200 high ground.

2010.03.02 Gold has broken above the short term technical resistance of U$1120. This is a good sign despite the strength of USD which continues to flirt with 81. There are two dimensions of this situation. The weakness of the Euro dragged down by PIGS pushes the USD (Australian $ is a very minor component of USD) and the inflationary of economy despite of the weak recovery. We are going to face the stagflation without question. Consumer spending will be very discrete and limited.

2010.02.26 We can call the divergence of gold and U$ is here to stay. Silver was very weak but turn better. The selling pressure of GLD and SLV have been weakening.

2010.02.19 IMF will sell 190 tonnes of gold. Fed increases the discount rate by 50%. USD Index boosts to 81+. All these are negative news to gold and precious metal because the U$ will be strong. This is either short covering or real strength. At the end, precious metals suppose to be down. The precious metal is at a detach mode. Even with very strong selling pressure. There is some real demand but the buying is very discriminate.

2010.02.12 Precious metals suffer the high USD differently. Gold has the less sustained blow but platinum, palladium and silver receive pounding non-stop. Even with the PIGS country level bankruptcy risk, the margin clerk causes the selling of the gained to repay any U$ based loan. A mental test on the believe in commodities.

2010.02.06 Surprise, surprise, the USD went back to above 80. All hell broke loose and the market around the world becomes panic. You can say it is because of the PIGS (Portugal, Ireland, Greek and Spain) credit problem which will drag down the work. The situation demands the dumping as the knee jerk reaction that precious metals have lost the meaning of safe heaven. You can go to safe heaven only you have no debt. The role of precious metal has to be shifted to another new one which has yet to be defined. We could not blindly believe precious metals and commodities could rise because of higher risk in other sectors. The linking of ETF to the commodities also creates more trouble because there is no need to deliver. The real McCoy has turned into fiat status. This transition demands more attention to re-establish the role of commodities because commodities could still be sunk while demand is high because of other non-supply/demand factors. This is not unique and new. The impact is not intensified by the ETF.

2010.02.05 The American banking systems (or the investment systems) remain the dominate players of the speculation market. Due to the low interest rate of the the Fed, the carry traders borrow the U$ to invest in other stock casinos around the world. As soon as negative news sent out and in combination of an artificially squeezed U$, these carry traders have to sell their investment to balance the book to reduce risk. The selling sparks a vicious circle of selling that begins with quick selling at lower price to the hyper active margin clerk to call in the margin. The end of day dumping signifies the terror in the eyes of these carry traders. The news on unemployment is all discounted by the market for a very long time. The fluctuation these days are just pure action and reaction between the banker and player. The public's sentiment has been continuously influenced through different news and market trends for various objectives. The biggest two are the energy consumption (which has not been down and increase production) and the China growth is slowing down (proved to be wrong every time due to missing the fact). With the availability of ETF, we can see the unbelievable of detach of the trading price to the real value. When you need money, you can sell the ETF. Because the ETF can be redeemed for the physical metal, the linkage has an adverse effect to the metal's price. Rather than a tie driven by the physical metal, it is not necessary to be safer to invest in metal. The smoke and mirror are every where.

2010.01.30 The U$ unwind effect causes the precious metals to come down. At certain point the leverage butterfly effect could collapse the commodity market.

2010.01.22 Precious metal finally broke under the pressure of American banking reform and China's action to combat speculation. Both triggered the recall of U$ loan and repatriation of the U$. The result is a higher U$ and dumping of commodities. Next week may not be the best time to gauge the strength of the gold support at U$1,100 due to panic. One more week will show the true colour. Silver is hurt more because of the recent rally; the strength becomes the weakness.

2010.01.15 A confusing week but the precious metals do not spooked by the rally of USD.

2010.01.09 What is the medium that can store the value of wealth? It is not necessary to be tangible physically. The most characteristic is the medium cannot be created out of thin air. The cost of production has nothing to do with the efficiency of the medium. It could be very cheap. For example, the origami art is made out of paper but it could be very expensive so does a painting. The medium could be arbitrarily. To argue gold or paper money can or cannot store wealth is only meaningful if we examine the possibility of creating the medium and the storing process: create the medium and storing the wealth. Creating paper money is not equal to storing the wealth. Storing the wealth is the process that you save your wealth by exchanging your wealth into the paper money. Alleging paper money is trust worth is irrelevant. The key point is why you store your value in paper money. While entertainysts have many confounding explanation the fact is that people have very limited choice. Wealth management community creates an illusion that everyone could do what the wealthy people can do. When you do the storing of wealth, there is a cost associate  with it which is called commission. The commission is relatively independent of the size of the transaction. For ordinary people, their wealth is transferred to those who manage their wealth. Whether precious metal is the right medium, one has to learn the basic which is not for everyone.

Archived Gold Notes before 2010