Gold prices pulled back a tad overnight, recording lows near $968 per ounce, but the overall tenor of the market remained firm, as little in the way of equity market progress was made, and the dollar slipped a bit against the euro. The latter took a small step higher, following indications that German Chancellor Angela Merkel will live up to her first name's definition and start possible sovereign bailouts among its unfortunate neighbors. Some see the common currency rebounding to 1.35 because of such potential actions. Then again, some see it as the last-ditch effort to save the experiment that it might still be.
New York spot gold dealings marked small losses at the open, showing a bid of $980 and exhibiting some difficulties in overcoming $985 per ounce. Silver fell 17c to $14.17 per ounce, while platinum dropped $28 to $1071 per ounce. Palladium slipped $4 to $214 per ounce. Gold fell in tandem with the greenback this morning (what?), and was still seen as subject to profit-taking sales despite the rising certainty of the $1,000 summit being scaled -and soon- among gold pundits. Oil climbed $1 to $35.51 but no one knows why. Okay, it is assumed that it did so, on the dollar's decline vis a vis the euro. Automaker SAAB became a sob story following its being orphaned by GM and the failure of the Swedish government to inject capital into the firm. Will one of my favorite cars be no longer? What is the world coming to?
U.S. continuing jobless claims reached 4.98 million, PC sales were starting to look like car sales of late, China offered to help Western telecom operators who find it hard to borrow money elsewhere, and Japanese authorities are expanding the rate of flow at the liquidity pumps following the 12.7% rate of economic contraction revealed this week. Just another day at the office, for the world of today.
And now, the game gets really interesting. With the Dow barely four points above what some see as its Maginot Line, the U.S. dollar flirting with the double-eight on the index, and gold still within a $20 whispering distance of $1,000, the conundrum of what represents value, what is next to pop (higher, or as in a bubble, both apply here), and where to park one's funds becomes a task as appealing as opening one's e-mail inbox after a month-long vacation.
One place that is sure to attract far fewer, if any, slices of the global investment money pie is the formerly known money fortress known as Switzerland. The way we see it, it is pretty easy to explain the recent urgency with which some of the well-to-do in some countries have been looking at physical gold: it has now taken over the mantle of privacy, safety, and anonymity that Swiss banks were previously known to offer. But, as pondered below, such a move may have its own perils. As for Switzerland, well, there will always be watches, skiing, and chocolate.
The end of an era, this. So, it turns out that some of the ugliest things were going on in the world's prettiest country. Thanks to one, Raoul Weil - who will eventually become known as the man to have brought down the time-honored Swiss banking system. You want gold confiscation? You just got it. If you are among those 250 to 17,000 individuals (and that's just from the U.S.) who tried to be smart to evade taxes in your jurisdiction and found it smarter still to bury your ill gotten profits into gold you may have bought from UBS, the gig may be up. Nothing will be safe from the prying hands of Uncle Sam. Nothing. Just as nothing will be safe from an SEC that wants to look as on top of its game when it goes after Stanford Financial Group. A rare coin vending unit is part of the SFG universe of firms.
Nothing more to add this morning. Have to munch some Swiss chocolate to try to feel better about the world.
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