Capped at Round Numbers
Gold prices are AGAIN being capped at a round number, this time $1,590/oz despite a veritable cornucopia of gold bullish news, from steadily beating Middle East “war drums,” to FIVE separate pieces of weak U.S. economic data, to the implosion of the MOST IMPORTANT STOCK IN THE MARKET – “Margin Stanley” – following abysmal earnings that included the disclosure that it still needs to post $3 billion for collateral related to the recent Moody’s downgrade. Silver, too, is being heavily capped, at the same KEY ROUND NUMBER of $27.50/oz that has served as the Cartel’s line in the sand for roughly three weeks.
The global economic implosion is gaining more steam each day, and now that the election cycle is in full swing, the political rhetoric surrounding the Middle East is getting dangerously loud. Such rhetoric propelled global gasoline prices to all-time highs in March, and thus, threaten to do so again in the second half of 2012 – amidst the world’s worst cumulative recession since the 1930s.
Andrew C. ("Ranting Andy") Hoffman, CFA
Miles Franklin Ltd.