At least in the northern hemisphere it is. Mr Obama has been duly anointed as the Democratic Presidential candidate (with Mr Biden as his running mate) and has made his "big speech". Labor Day is this coming Monday - September 1 - and the Republican tribe begins its rituals on the day after that. And last but far from least, Wall Street cranks back up into top gear with the end of the "summer doldrums".
Doldrums is what we have had over the past week, if you just look at the week on week moves in the markets. Gold closed this week a mere $US 1.70 above where it closed a week ago on August 22. On the week, the Dow lost about 80 points despite several daily moves in excess of 100 points. The problem here is that ever more fanciful stories are being concocted in an increasingly desperate attempt to convince investors in the US and elsewhere that the "worst is over" and the credit crunch is going to start to ease. Honest!
Two weeks ago, commodities had their biggest weekly fall on record. Last week, they had their biggest weekly rise in more than three decades. This week, some large intraday swoops and dives notwithstanding, they are treading water.
The only truly interesting thing to report in regard to the week just ended is the ever more glaring discrepancy between precious metals (Gold and Silver) prices as set on the futures (paper) markets and the ever increasing premium over these prices for anyone who wants to get hold of the real metal.
What WILL be interesting is how long this situation can be maintained. Buying futures contracts on Gold and Silver is no problem. Getting hold of the actual metal supposedly behind these contracts is getting difficult and, in many cases, impossible. The moral of the story is very simple. If you are looking for genuine financial insurance against a meldown of any nature, don't rely on claims to metal. There is no substitute for the real thing.
(Chart appears here in original analysis.)
As you can see, the price action on this chart has taken Gold just below the uptrend line which has supported the entire bull market from 2002 to date. We also have descending lows on the chart - the $US 1000 high set in March and the $US 975 high set just over a month ago in mid July. With the rebound this week, the price action has once again moved above the uptrend line. What is now necessary is to see where the first solid support point establishes itself on the chart.
We began the table below in 2007 and have extended it into 2008, even though Gold in all four currencies in the table remain well above their 2006 highs. Gold breaking out to new all time highs in $US terms at the end of January led to bull market highs in all four currencies. And as you can see, in March, Gold improved upon those January levels in all four currencies as spot future Gold closed above the $US 1000 level for the first time ever in the middle of March.
A bit more than a month ago, we had a new entry on the table for the first time since Gold topped the $US 1000 level in March. On July 17, Gold rose to 103233 Yen. That's was a new 2008 high for the metal in terms of the Japanese currency.
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