Casey's Daily Resource Plus - 12/02/2008

Precious Metals

Gold seems to have found a new level around which to gather itself, as it meandered either side of $920 during the New York session on Monday, before settling at $922.55/oz., up $4.35. Overnight, gold has been flat.

Unstoppable platinum had another monster day, propelled to a record close above $1900 barely two weeks after first breaching $1700, as it ended at $1934/oz., up $52. Overnight, platinum has pushed higher.

Silver spiked sharply from mid-morning through until noon, after which it backed off about 15 cents, but still closed at $17.40, up 29 cents. Overnight, silver is trending higher.

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Taking a Dump

Ambrose Evans-Pritchard is reporting that Switzerland's central bank is to dump a further 250 tons of gold. The stink you smell is manipulation.

There are two ways in which you can look at this situation:

1. Gold has continued to rise over the last seven years, amid Central Banksters dumping their Gold reserves. Without this overt manipulation, who knows where the price of Gold would have been today? Central Bank Inflation will continue to play a major role over the next couple of years. Trying to hide it by pushing down the price of Gold , will have the opposite effect on the price of Gold in the long run. You can fool some of the people some of the time, but you can't fool all of the people all of the time.
2. Huge sell-offs like these might drive the price of Gold down, but inadvertantly, that creates an opportunity to buy more Gold at a lower price. Also, remember that the cost for mines to produce an ounce of Gold has gone up immensly. If the price of Gold is too low, there will be little incentive for mines to consider investing in future mining projects. On top of that, South-Africa's production levels are decreasing at an alarming rate. As of January 2008, China has overtaken SA as the world's number one gold producer.

Therefore, unlike the Central Banks, I don't have any intention of taking a Golden dump.

FMM comment: Please note that I'm not dishing out any investment advice. I'm just sharing my oppinion.