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Morning Abner--enclosed is a typical overnight comment on USD Gold. This excerpt from Gold Eagle. It does seem at long last we are witnessing genuine and massive buying of gold to secure assets worldwide. Just a reminder that USD Gold has to rise 70% FROM HERE to be comparable with the USD Gold price when Nixon abandoned the Gold Standard. The penny is SLOWLY DROPPING!

However--the ASX unhedged gold producers have SERIOUS catching up to do--pricewise.



Traders said Dubai's move to restructure its biggest corporate debtor, Dubai World and delay on some of the company's $59-billion of liabilities had an indirect impact on gold as it moved the dollar.


Central Banks, particularly in Asia, increasingly looking to diversify their foreign exchange reserves after India's purchase of 200 tonnes earlier this month is a major factor buoying the yellow metal.


"Everybody is bullish on gold, and everybody is looking at the signal central banks are sending," said Dick Poon, manager of precious metals at Heraeus in Hong Kong.


"It's not just India or China ... everybody is looking at how much money they will invest in gold," he said.


Any decision on whether India would buy more gold from the IMF would be taken by the Reserve Bank of India, Indian finance ministry official Anup Pujari, joint secretary for multilateral institutions, told Reuters on Thursday.


Mr. Poon said there was a lot of physical demand despite high prices, with Asian buyers seen in the market. "Reserve diversification moves by non-G7 central banks underscore investor detachment from U.S. dollar assets and is clearly reflected in gold's rally," said Shuji Sugata, a manager at Mitsubishi Corp Futures research team.

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All markets reflect a difference of opinion. If there were no sellers there would be nothing to buy. Be thankful for them rather than derisory.


I did not say the TA presented my opinion, although it did. It would be unwise to count on governments not changing their plans. You should be aware that until recently central banks were net sellers. The difference between the retail market and the central bank market is time frame.


I wonder where the gold market today would be but for Dubai? No point in that - what's happened cannot be undone. However it has presented an unexpected opportunity to buy gold stocks almost as good as the TA implied correction, which may still yet occur.

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This USD45 drop has to be one of the biggest and fastest on record. Presumably we may be seeing the start of a brand new

currency crisis over Dubai--just when the US is asleep!


Intraday chart of USD enclosed.


All you can say is "SUGAR" and boy its hit the fan!


Dont know if this link will work, but its a new Kitco feature --have a look its very interesting.




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I just posted this elsewhere:








I'm cool as mate.


Knowing that i own so many gold coins when there is quite clearly a world shortage i couldnt care less that its down $40 odd bucks.


It could go lower and i will still sleep well at night.


If you hold gold we are up against very strong forces i.e central banks.


It has had a great run and it was half expected to see some serious profit takings in the paper markets.


I expect as sydneyguy for it to form a base here before we have lift off again.


Nice weekend to all.




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Hi antidote,

Not sure as to the point you are making,however this gem (from you) ...."Knowing that i own so many gold coins when there is quite clearly a world shortage " has no basis in fact.Grab a Perth Telephone Book,call the Perth Mint and you can buy as much Gold as you wish,and that includes coins.Where does this persistent Urban Myth come from?

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As much as anyone else I guess flower. But that's not the point. TA does not explain anything other than market's emotional state.


The indicators were basically saying that gold was overbought and in need some consolidation (my words and also my analysis). The reality of that is a retrace at some point to test and confirm a support. Once that is done and confirmed there is strong buying support at a certain level thus reducing perceived downside risk. You know nothing goes up indefinitely and particularly with such high velocity. That is a hallmark of excessive emotion and thus implied volatility - the further it goes up like that the harder it will eventually fall as a rule.


Traders at all levels monitor these things and thus to an extent render them self-fulfilling.

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