Newsroom
Peter Schiff with Bullish comments on Precious Metals this morning on CNBC
October 23, 2008
http://www.cnbc.com/id/15840232?video=901271420&play;=1
Gold is now back to the levels we experienced on Sept 10th ($750) and Silver is under the circumstances showing signs of strength and holding in the $9.70 to $10 Price Range. The Silver to Gold Ratio is down from its October 10th High of 88 to 1, to 75 to 1 and we expect this trend to continue.
Central Banks and Hedge Funds have been continuing liquidations of Gold, choosing to sell into upward rallies and therefore keeping the Breaks on short term upswings in Price. This is evidenced by a 120,000 oz Gold Sale by J.P. Morgan Chase this morning for one of its, undisclosed Hedge Fund Accounts. The same is true for the remaining Hedge Funds relative to Silver.
Meanwhile Equity Markets world wide continue to show weakness as fears of a Global Recession and concern over the potential success of Government Bail Out packages continue. Oil is now trading below $70.00 as a result of the concerns of Economic Slow Down and continued Hedge Fund liquidation.
With the exception of the Japanese Yen, which is currently at 98, the US Dollar is continuing its strength against the BP @ $1.62 the Euro @ $1.28 and the Canadian @ $1.20 as investors and institutions continue to seek US Cash and US Treasures over Equities. We do not expect this trend to last much longer.
The Credit Markets are showing some signs of easing as the Libor rates have come down, but they still have a long way to go.
Here we go again with more US Government nonsense. Bernanke has already “let the cat out of the bag” in his testimony before Government yesterday, suggesting that an additional package will be put before Congress for an additional 150 to 300 Billion, as they now recognize their EESA of 700 Billion will not get the job done.
Our 3 and 4 year old children could have told them that 3 months ago.
We have not heard much from Mr. Paulson this week. Perhaps he is monitoring the printing presses and helping with the decisions of what denominations should be printed. (Ones, Fives, Tens, or Twentys) Perhaps we should tell him it’s less expensive if they print a New “Billion Dollar Bill”.
The driving force behind the Downward Price Movement on ALL commodities is 1) Massive De-leveraging, 2) withdrawal of Credit Facilities and 3) Redemption Requests relative to Hedge Funds and their Mass Exodus from their long Futures Contract Positions.
It is interesting to note relative to Gold and Silver, that the demand for Physical Product is approaching epic proportions. What this really means is that as these products are put into the possession of private investors, it is unlikely that that physical product will be available to come back into the market for years to come. This will put even more upward price pressure on these products as the Economic Fundamentals of Supply and Demand and Inflation will finally win over the current synthetic prices being created by the Hedge Funds.
We also believe that Hedge Funds, as we know them to-day, and which are closing their doors by the Hundreds, will not re-open. Those few that manage to survive will be subjected to severe regulatory requirements and lower Credit Facilities which will inhibit the type of activity we have seen in the past and prevent them for attempting to control any market.
It seems fair to say “that unlike a pigeon, Hedge Fund managers no longer have the ability to leave a deposit on a Ferrari.”
Lastly, for our Canadian friends, with your dollar at $1.20 against the US Dollar – current Prices for Gold and Silver are still very attractive. More simply put, your Canadian dollar at $1.20 buys more Gold or Silver today then it did ten months ago when your dollar was at par to the US Dollar.
We therefore continue our Long Term Bullish Sentiment for Gold and especially Silver and that current price levels appear very attractive for Long Term Appreciation.
Continue to be conservative, pro-active and do not overextend.
Trading Department
Precious Metals International
Peter Schiff with Bullish comments on Precious Metals this morning on CNBC
Posted by Worldwide Precious Metals on Thursday, October 23, 2008
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