More of the Same Ahead for Gold

Gold and silver both continued slipping this morning, as inflation concerns ease. Oil too has softened in light of good potential for supply increases in coming months. With less emotional turmoil over the economy at the moment, encouraged by solid retail sales in the early days of Christmas shopping, the perceived need for gold as a hedge against inflation is evaporating slightly and profit taking will continue so long as these feelings and influences dominate investors and fund managers thoughts.

This can be seen most clearly in the futures market for precious metals, with February gold down about $15. Fund profit taking also seems to be set to continue heavily throughout this Fridays trading.

In India, where gold was a very hot commodity in the last half of 2007, demand has eased and investors attentions seem to have moved towards the stock market. Trading is getting very active and stock indexes are driving upwards at a sharp rate.

Though dollar confidence remains on the incline, much world sentiment is squared off against the U.S and it's currency. Keep this and other economic information in mind when making investment decisions. Investors with an eye for the long term always try to keep a balanced portfolio, which will certainly include some form of stabilizing commodities interests.

Tom's Recommended Film of the Week

Catch A Fire

Focus Features presents some of the best little films you'll ever want to see. Sometimes they are sort of hidden amongst the big blockbusters, but it's worth seeking them out. This is certainly the case with Catch A Fire, directed by Phillip Noyce and written by Shawn Slovo.

Catch A Fire gives us a glimpse of both sides of the apartheid era in South Africa. As a film, it offers up many questions. Is there a difference between terrorist and revolutionary, or is it just a matter of perspective? How can we preserve and protect ourselves, our families and our rights and civil liberties? Is action better than inaction?

In Catch A Fire we see viewpoints and approaches to these questions from both sides of the conflict, mainly through actors Tim Robbins and Derek Luke. The dichotomy of aggression and passivity between characters and the seemingly random destructive, uplifting and demeaning results these actions produce, raise this film to a higher level. Action, tension, misunderstanding, fear, power, love and determination all flash at the viewer, making Catch A Fire exciting, entertaining and thought provoking.

Gold Slips Below $800

Profit taking this morning have pushed gold back below the $800 mark. With the Dollar gaining strength after 2007's 10% drop against the Euro, predictions for next year seem to be leaning towards a sizeable downward correction in the spot price of gold. This is a change from just a few days ago, when economists were calling for a stable average gold price of $800 through 2008.

Seems that this time around gold has held a very solid ceiling at the $850 level. This reminds me very much of the last super bull market back in 1979-1980.

Other factors such as falling home prices, rising unemployment and oil supply problems may yet have an effect, but for now, gold seems to have capped.

Black Friday a Big Success, Gold Above $825

Post Thanksgiving weekend shoppers dumped a load of cash into the economy. Sales were up more than 7% over last years Black Friday and Saturday combined sales, with the number of shoppers up and the per shopper amounts spent actually down. Purchasing was heavily skewed towards electronics and related items, benefiting Best Buy and Wal-Mart who offered good deals in these areas. We'll see how Amazon does today as Cyber Monday unfolds.

Gold and other precious metals also surged in the post Thanksgiving euphoria, with Gold topping $820 on Friday. This morning Gold is holding very solid above the $825 mark as of this posting, with demand for the world’s favorite precious metal quite strong in the Middle East.

Tom's Recommended Film of the Week

The Chocolate War

A fascinating, almost surreal film about a freshmen’s experience at a Catholic Boys School, The Chocolate War has more depth than many coming of age stories. Based on a controversial novel of the same name by Robert Cormier, the script offers a birds eye view of the exaggerated pier pressures brought to bear on one young man as he works through a tragic loss in his life.

The supporting characters of unrestrained authority are exquisitely brought to life by John Glover and Wallace Langham, while the conversion from novel to script by writer-director Keith Gordon adds a twisted sense of push and pull to the motives and interactions of all involved, even with it's altered ending.

Grab a box of chocolates, get comfortable and enjoy Ian Mitchell-Smith's portrayal of Jerry Renault's lone stand against all that is bad in the world.

Another Dip below $800 for Gold

Sell-off's this morning again brought gold down below $800. At the time of this posting spot gold was at $793. Platinum also saw some adjustment dropping to about $1423 at the time of this posting, with palladium still hovering just a bit below $370. Silver slipped back below it's surge to $15 from yesterday and rests near $14.65 at present.

Palladiums weakness is due to a very legitimate collision of less demand and a reasonable expectation of production. Platinum, on the other hand seems to be reacting to tighter shortfall figures than speculators had anticipated for the fourth quarter. Gold futures are down on a firming US dollar and softening price for crude oil. These are the types of short-term reactions I had mentioned in other postings. Most analysts expect these sorts of ups and downs to continue through the month of November and probably through the end of this calendar year.

Two different camps seem to be emerging regard the long-term viability of a bullish gold market. Some are expecting gold to shift down to the $720 level after February when demand for gold in India slacks off as the festival season comes to a close. Others are looking longer term and anticipate that gold supply will get even tighter in the next few years, as mining becomes a more costly and difficult proposition. These folks are looking at both the rise in demand over the last few years and reports from major gold production firms which indicate a faster fall in gold supply is coming.

With these possibilities in mind, major industry is looking for ways to keep the precious metals needed for manufacturing flowing. Japan, for instance, is looking to team up with Botswana and South Africa to use satellite technologies to reach better, more productive veins. When there is purposeful demand, not just speculation, there will always be those willing to find a way.