|ORO Y PLATA INTERNACIONAL S.A.
Gold Comes Back Strong +$24oz to
Analysts predict $800 is the new base for gold
24/11/07. Gold's November tumble was short lived. Gold futures rose
$23.90 an ounce on November 23 to settle at $821.60 in New York. After
hitting $847.50 on ounce on November 8, it fell to less than $780 an ounce
as investors cashed-in profits.
Continued economic concerns in the United States, and the weakening
dollar, gave gold the added edge as a safe haven for investors during the
"The U.S. dollar started to look like on an overcooked turkey over the
holiday recess, as fresh selling brought it to under the 75 mark on the
index," wrote Jon Nadler, a senior analyst at Kitco Bullion Dealers. "The
greenback's woes prompted renewed buying of gold."
While no new economic news hit the wires due to the Thanksgiving
holiday in the United States, the dollar slid to a new low against the euro
(EUR1 = $1.50) in the morning hours November 23, but the euro closed the
week up only one penny to $1.4833.
Currency analysts Eric and David Coffin wrote, while holding to their
prediction the United States would not fall into a recession, the case for
pessimism is growing.
They concluded that the dollar has fallen to a historic low. "As we’ve
emphasized for years, this is not a short term phenomena. It’s very much
part of a very long term trend. Though the greenback may take some
'oversold bounces,' there have been no recent fundamental changes in U.
S. fiscal behavior, public or private, that strengthen the dollar," the Coffins
The mortgage crisis isn't over yet either, "Washington and Wall St. are
proposing Super SIVs (aka Project Flushaway)...All the fixes we’ve seen
have one thing in common: They are designed to avoid price discovery in
the structured debt markets."
China too is playing-up a threat to dump dollars if Congress approves
trade sanctions. The one safety net for "this mess" is gold they wrote.
Even though it appeared gold was overbought numerous times in the past
30 days, pullbacks have been smaller than in past. "We wouldn’t be
surprised or alarmed if gold consolidated again before creating an $800
base, but that base is for practical purposes already made."
Gold and oil are reacting to the dollar's demise, wrote the Coffins, "The
liquidity injections by the Fed and solutions aimed at the debt markets tell
us there will be a lot more bad news from the banking and investment
banking sector over the next couple of quarters.
"And the good news? Precious metals should continue their uptrend, and
other metals will continue to be supported by a weakening dollar.
Washington will sacrifice the dollar to stave off a recession, and so they