It all comes down to this – a classic test of bottom, in conjunction with all the other tests underweigh right now in major currencies.
HUI Gold Bugs Index – stocks are continuing to follow, if not even underperform, gold itself.
TSX Gold Index – a slightly more positive picture here, possibly supported by the speculation surrounding some high profile merger cases. Still we can see price has broken down from the triangle and here too time is running out for Gold bugs on this go around.
Ultimately the Dreaded Yellow Metal is in the hands of central bankers (Greenspan on trade deficit and currency) , the odd policy maker (Gold seen pressured by IMF sales study), and traders the world over.
Finance chiefs from the Group of Seven rich nations which met in London this weekend said IMF managing director Rodrigo Rato would look at proposals to revalue or sell gold reserves to offer debt relief and ease Third World poverty.
“Whatever happens the market is going to be disconcerted and on the back foot until the April IMF meetings,” UBS Investment Bank Analyst John Reade said. Gold prices hovered around $415–416 an ounce.
The International Monetary Fund, which will report back in April on debt relief, is the world’s third biggest holder of gold bullion with more than 100 million ounces.
Under a 1971 agreement, most IMF gold is valued at 50 an ounce, about a 10th of current market prices.
05.02.07 10:03 #