Monday, November 24, 2008

COMEX: Has it got the gold?

Rumour has it that COMEX does not have the gold to fulfil its obligations. The December contracts need to be honoured if this rumour is to be put to bed, however some analysts are of the opinion that COMEX will fail to deliver physical gold and gold will sky rocket. Well, December is not that far away so we will soon know!

If you have the time watch this clip of Max Keiser - Comex default in December, $2000 gold in a day! We don’t go too much on conspiracy theories but Max comes out with his own unique view of world affairs in this clip. There is also a clip which captures John Embrey on BNN television referring to the possibility of a default by COMEX, just click here.

From YouTube to the US Dollar and the chart above, note that the US Dollars upward progress is beginning to slow and also note the gap that has opened up between the dollar and its 200-day moving average. This can’t go forever and we expect to see the dollar return to its 200-day moving average before too long. As and when that happens there will be spikes in gold prices such as the one we witnessed on Friday when gold popped up to just above the $800/oz level. And on this occasion the gold producers joined in with the HUI, the gold bugs index, putting on 45 points, with some of the quality stocks gaining more than 20%. The dollar is walking a tightrope right now and any disintegration in its value will ignite the price of gold.

We are holding firm for now and also looking to deploy the remainder of our opportunity cash shortly. One way or another the final few weeks of this year could still be enlightening.

Have a good one.

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