Gold futures top $760 to trade near a 28-year high Gold futures climbed more than $6 an ounce in electronic trading Monday, sending the December contract to the highest level a front-month futures contract has seen since 1980. Analysts attributed the gains to everything from investors diversifying assets to safe-haven buying against a backdrop of tension between Turkey and Iraq. Gold for December delivery touched $760.80 at its peak in electronic trading as of 4 a.m. U.S. Eastern. That was the highest intraday price a front-month contract has seen in almost 28 years. "We are now seeing channels of buying interest," said Frederic Panizzutti, senior vice president at Swiss-based MKS, one of the world's largest precious metals traders and refiners.
Technically Precious with Merv Gold moved into new highs this week but not with any amount of enthusiasm. 15,312,000 ounces of gold sold short. Is that true? Boy, if someone had to cover that short there would be an upside explosion. But that's only dreaming, I think. I've mentioned volume often but have not gotten into the topic of open interest. A discussion of open interest could be quite lengthy so I am only going to present, in as simple of a manner as I can, the open interest situation in gold at the present time. In futures trading open interest is the number of outstanding contracts. The open interest in gold (COMEX Gold on the NYMEX) stands at 475,644 contracts as of the Thursday close. Since each contract represents 100 troy ounces of gold that means that the 6 week open interest increase represents 15,312,000 ounces of gold (or at Friday's gold price, $11.6 Billion). Still you say, so what?
Oil soars to new record above $85 Oil zoomed to an all-time high above $85 a barrel on Monday, propelled by robust demand from booming commodity markets and fresh geopolitical worries. Oil has remained above $80 for most of the past month, fuelled by supply concerns ahead of winter when demand peaks and record lows for the U.S. dollar. U.S. crude was $1.15 higher at $84.84 a barrel by 9:03 a.m. EDT, off a new record high of $85.19 -- its fifth straight session of gains. London Brent crude was $1.08 higher at $81.63, off its record high of $81.93. "A run at $90 is now seen as reasonable," Citigroup analysts said in a note. Oil's rally comes at a time when commodities are surging on strong demand from emerging markets such as China and India. Gold struck a 28-year high on Monday, while platinum hit a record high. Copper, lead and nickel were also firm.
Banks agree to prop up credit market Bank of America, J.P. Morgan Chase & Co. and Citigroup said Monday they've agreed to create a special fund to help guarantee liquidity in the commercial-paper markets. The fund could be up and running within 90 days, according to a statement issued by Bank of America. The amount of the fund wasn't specified, but published reports have put it as high as $100 billion. Talks between the banks were initiated by the Treasury Department, which issued a statement Monday welcoming the move. "The joint efforts of domestic and international financial institutions, broker-dealers and investors have resulted in a potential structure to improve liquidity in the asset-backed commercial-paper markets," Treasury said in a statement.
Why the US Central Bank Wants to Create Inflation, Destroy US Dollar It’s the end of the world as we know it…and we feel fine!India is booming. China is booming. The latest news from the Middle Kingdom tells us that its trade surplus is rising at a 56% annual rate.Heck, even Argentina is booming. Its economy has been growing about three times faster than the US model for the last five years. Last week, your editor and his old friend Doug Casey were invited to lunch at the American Club in downtown Buenos Aires. Our hosts were mostly men who have been living and doing business in Argentina for decades. They’ve seen it all – corruption, hyperinflation, defaults, chaos, riots, depression…you name it. “What’s the real story down here?” we wanted to know.
Treasury Sales May Rise 50% as Deficit Suddenly Grows Sales of Treasuries may increase for the first time since 2004 as the U.S. federal budget deficit expands, jeopardizing the biggest bond rally in five years. Government auctions of bills, notes and bonds in the fiscal year that started this month may rise more than 50 percent to $220 billion, according to UBS Securities LLC, one of the 21 primary dealers that underwrite Treasury auctions. The first decline in corporate tax revenue since 2003 increased the shortfall by 12 percent to $162.8 billion for the year ended in September, from $144.8 billion in the 12 months through April. With the Federal Reserve cutting interest rates to keep the economy from falling into recession and inflation slowing, an increase in net sales would mar an otherwise bullish outlook for U.S. government debt, which has returned 4.3 percent this year, Merrill Lynch & Co. index data show.
The O.C. Mortgage Bust After more than two decades in the mortgage business, Tony Ventimiglio got his big break in 2001 when he accepted a managerial job with a lender here in the heart of Orange County for $225,000 a year -- more than double what he had made in each of the previous four years. Ventimiglio nearly doubled his salary again two years later, this time at the now-defunct Homefield Financial, where he supervised 100 workers, including salespeople who routinely made $25,000 a month in commission. "When I started working there in 2003, I was embarrassed because I was driving a Cadillac and the young office clerks were all driving Mercedes and BMWs," said Ventimiglio, 49. "There were a lot of people who knew nothing about mortgages. They were simply in the right place at the right time."
U.S. Producer Price Index Rises, Spurred by Oil Costs Prices paid to U.S. producers rose in September as oil costs climbed, while core inflation was less than forecast. The 1.1 percent increase in total producer prices followed a 1.4 percent decline in August, the Labor Department said today in Washington. The core measure, which excludes fuel and food costs, rose 0.1 percent after a 0.2 percent gain in August. Federal Reserve officials have said they continue to monitor inflation "carefully" after they cut interest rates for the first time in four years last month. They said in their Sept. 18 statement that the latest figures had "improved modestly.'' "The stronger-than-expected PPI report should add some upside risks to next week's headline CPI number,'' said Zach Pandl, economist at Lehman Brothers Holdings Inc. The Labor Department next week reports on the consumer price index.
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