It’s another ugly today on the markets with the Dow, TSX and Venture Exchange all sharply lower…as of 9:15 am Pacific, Gold is off $38 an ounce at $1,623…Silver is 67 cents lower at $29.82…Copper is off a penny at $3.07…Crude Oil is off its lows but has slipped 69 cents to $76.92 while the U.S. Dollar Index is down one-third of a point at 79.27…Goldman Sachs has reiterated its 12-month Gold target of $1,860 an ounce, though we may like the world we live in even less should Gold ultimately take off again to the upside as expected…Gold of course has collapsed from its late summer highs and has fallen back in line with Goldman’s three-month price target…”As we expect Gold prices will continue to be driven in large measure by the evolution of U.S. real interest rates, and with our U.S. economic outlook pointing for continued low levels of U.S. real rates in 2012, we continue to recommend long trading positions in Gold and reiterate our 12-month price target of $1,860 per ounce,” Goldman stated in a research report today…“Our U.S. economics team further lowered their U.S. GDP-growth outlook and expects below-trend economic growth in 2011 and 2012…as a result, we expect that 10-year TIPS (Treasury Inflation Protected Securities) yields will remain near current low levels”…should the 10-year U.S. TIPS yields remain close to zero basis points, Goldman says its pricing model suggests that Gold prices between $1,800 and $1,900 an ounce would be well supported…“We expect that the level of concern over European sovereign debt will continue to drive Gold prices, with the potential for a European financial crisis skewing the balance of risks to the upside”…as John’s chart showed last week, a re-test of Gold’s long-term trendline support on its 2.5-year weekly chart seems likely…that would take Gold down to $1,580 an ounce…
What’s astonishing and alarming, especially considering that Gold is still trading at historically very high prices, is how quickly the CDNX has gone from being in a bull market to a bear market…with a technical breakdown in September, and a 300-day moving average (SMA) that has now reversed to the downside, there can be no denying the fact that the Venture is now in the grips of a full-fledged bear market…it has plummeted another 60 points this morning to 1330, putting it below the early July 2010 important bottom…yes, the CDNX is technically very oversold and potentially could stage a minor rally at any point…but this now has to be considered a bear market and where the CDNX will finally bottom out is anyone’s guess…this does have the feel of a global meltdown in the works that could be even worse than 2008…the recovery from the ’08 financial crisis was relatively quick…governments stepped in and propped up a system that should have been allowed to self-correct…”Quantitative Easing” was deliberately designed to boost asset prices – Bernanke even spoke about the benefits of a rising stock market – to create a “wealth effect” that would help jump-start the economy and avoid a deflationary cycle…
The market appears to have come to the conclusion that the Fed is out of bullets…the market also seems to have lost confidence in the ability of the euro zone to contain its debt crisis…then of course there’s the U.S. Congress and a lame-duck President who could go down in history as one of the most economically illiterate Presidents to ever occupy the White House…in all fairness, Democrats and Republicans are both responsible for the mess the United States is in and their current actions are only making matters potentially worse…at the moment, the Senate is even cooking up protectionist legislation that could very easily precipitate a trade war with China…speaking of China, and the emerging markets in general, there is a growing perception (in the markets, perception is reality) that those economies may slow down more than expected which poses another threat to investors and the economies of the developed world…folks, cash is King right now and we’re simply going to have to wait until the dust settles…
Bernanke testified before a Congressional Committee this morning and stated the Federal Reserve is prepared to take further steps to help a fragile economic recovery held back by a weak job market and financial stresses in Europe…”The Committee will continue to closely monitor economic developments and is prepared to take further action as appropriate to promote a stronger economic recovery in the context of price stability,” Bernanke said…given anemic employment growth that has depressed consumer confidence, Bernanke urged lawmakers not to cut spending too quickly in the short-term, even as they grappled with trimming the budget deficit over the long-term…”An important objective is to avoid fiscal actions that could impede the ongoing economic recovery,” he stated…
We’ll see how the markets finish today and tomorrow we’ll likely size up some oversold individual stocks where there could be some opportunities in the near future…
Greg H. Why don t you find your answer in your bible. I hope the next time you will think twice before insulting me. the bible of investing is listening to peoples who have been investing for many years and have gain the knowledge and experiences to better guide others in not repeating the same errors. Now go back reading your mathew 7 where the dogs ang pig are stepping on you.
Comment by Andre — October 4, 2011 @ 8:29 am
GBB and VGD look cheap to me, but its that age old thing about catching a falling knife that’s bugging me.
Comment by Hugh — October 4, 2011 @ 8:32 am
2 weeks ago, CIBC upgraded RIC to outperform. Today, National Bank downgraded RIC to sector perform. Highly paid analysts do not seem to agree.
Comment by Alexandre — October 4, 2011 @ 8:38 am
TSX-V has broken below 1350, if it closes below that benchmark, there is no support anymore. It could go to 750 and the crash we been hearing about and seeing signs of could be reality. Now I understand it is hard to phanthom and there are bulls and bears. Reality is the largest bank in Mexico has stopped accepting U.S. dollars, Amsterdam will not trade U.S. dollars for Euros. Stores in Manhatten have signs up that they take Euros. I am liquid. To those who are not, please trade with caution and by all means don’t lose. I consider all of you my friends no matter who you are and where you come from or what beliefs you have. Be careful fellow BMR’s and both john’s too. There will always be a good stock to buy in an upward market, be we just don’t have it yet.
Comment by dave — October 4, 2011 @ 8:43 am
Difficulties in exchanging $US to Euros in Amsterdam was in March 2008. Furthermore it was the small currency exchange dealers who were refusing to do it because at that time the $US was falling too rapidly for them to re-sell the $US without maybe taking a loss.
Comment by Alexandre — October 4, 2011 @ 8:55 am
In regards to my earlier post, yes this is good for gold, but not necessarily gold stocks unless they are a producer. I think gold has a shot at 3k to possibly 5k an ounce by Dec. 22, 2012. I feel that gold good shoot up $1,700 an ounce on Dec. 22, 2012. That is our benchmark day when China meets and is RUMORED to pull all money out of the U.S. It will be interesting to see how things play out over the next year or so.
Comment by dave — October 4, 2011 @ 8:56 am
Alexander, my friend’s left for amsterdam on Saturday, They called me yesterday to tell me this. They are in Germany now vacationing there instead.
Comment by dave — October 4, 2011 @ 9:37 am
The quality of the posts here is really deteriorating! Bad day for the CDNX – but from 1350 straight down to 750..really? And now people telling people that they should’t discuss Obama’s failed economic policy – why the hell not, we are all grown ups no? Oh I see…
Comment by Hugh — October 4, 2011 @ 9:54 am
A lot of people a going to get banged up in the next leg down. I hope that we don’t see 750 but it’s a possibility… I can see a lot of my watch list take a 50% hit in no time — THERE ARE NO BIDS ON THE VENTURE!
I am hoping we see a pivot in the 900-1050 range…. it’s a big range! But then again the TSXV is off 149pts or 9.9% today.
Comment by Justice — October 4, 2011 @ 10:38 am
GBB had a roller coaster day…. low 21 cents and closed at 25.5 cents with no changes. I managed to get some through the dump at 21 cents. My sixth sense of this stock will be between 22-24 cents level … at least for some time. If you have a chance to scoop at 22 cents.. .go for it. BER, as usual, with some dumping towards the end.. people do not want to hold the stock overnight. It dropped almost every single day and strong support at 8 cents but I do not think it will go below 10 cents. Huge lot for selling is loaded at 17 cents. TYP finally had some jumping with cents advance to 59 cents. VGD, a disappointing day and closed at 23.5 cents. SFF closed at 18.5 cents with low low volume.
Comment by Theodore — October 4, 2011 @ 1:17 pm
Hugh, I am not saying the tsx.v IS goint straight down to 750, nor did I think BMR meant it that way either. There will be small green rebounds no doubt. But if you do research and DD, you will find enough evidence that the POSSIBILITY exists for it to happen in the next month or too.
Something for you, google: normalcy bias – you fit the bill
Comment by dave — October 4, 2011 @ 7:15 pm
Question: VGD has just hired EuroSwiss Capital to assist Visible Gold Mines with business development, media awareness and investor-relations activities in Switzerland and other European countries. Does such ventures have a quantifiable benefit, or is it just a cosmetic effort? Thank You.
Comment by Alexandre — October 4, 2011 @ 9:48 pm
@Dave – you said below 1350 there was NO support and then immediately went on to say it could hit 750. While I wouldn’t argue that it could hit 750 there are further levels of support between 1350 and 750.
Normalcy bias? – Now you are just flinging condescending insults! Whatever makes you feel better Dave.
Comment by Hugh — October 5, 2011 @ 2:58 am
Was EuroSwiss Capital hired just for VGD or are they also doing work for X-Terra and Fieldex?
THKS.
mar
Comment by mar — October 5, 2011 @ 4:54 am