Gold Hits New Record As Heatmapped Dollar Drubbing Continues, BOJ Approaches Reintervention Time

Tyler Durden's picture

The perfectly inverse trade of dollar vs gold continues to reach new extremes. Earlier today, spot gold just hit a fresh all time high of $1,317, once again proving that all that inflection point chasers really have no idea what they are talking about, since gold is not trading based on some regression channel, but continues to be the only way to hedge central bank profligacy. It is stunning how many experts still don't get this. As long as daily news of currency intervention bombard Bloomberg terminals around the world, this trend won't end. And neither will the pain for the dollar, which as the attached heatmaps demonstrate has received another fresh round of pain, with the EURUSD hitting 1.3765, as Europe is once again caught in a quandary of how to best punish it own currency without setting off a fresh banking crisis (the whole rock and hard place thing). Yet someone who will certainly be forced to intervene soon or else risk loosing all control is the BOJ, whose currency is now back to pre-intervention levels. Total tally: global central banks have spent tens of billions to keep the dollar low, and have failed, while all Bernanke has had to do is threaten to print another trillion and succeeded.



Dollar heatmap

Euro heatmap

Yen heatmap

And below is FMX Connect's daily gold fix:

December Gold settled at $1309.60 per 100 troy ounces on Thursday, a net loss of $.70 for the day

December gold was up $7.40 to $1317 per 100 troy ounces as of 7:30 AM EST, this morning. The December U.S. dollar index was down .428 to 78.51. October platinum was up $13.90 to $1665.90 per 50 troy ounces. December silver was up 13.9 cents to $21.96.

Gold Options Report

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Bloomberg (Reported 10/01/2010)

“Gold climbed to a record in London and New York as investors sought an alternative to a weakening dollar. Silver traded near a 30-year high and platinum rose to the highest level in more than four months.

The dollar headed for a third weekly drop against the euro amid speculation the Federal Reserve will take additional steps to shore up the faltering U.S. recovery, and before a report forecast to show manufacturing slowed in the country. Gold usually moves inversely to the greenback, and holdings of the metal in exchange-traded products are at an all-time high.” Gold Advances to a Record as Slumping Dollar Spurs Demand From Investors

Reuters (Reported 10/01/2010)

“Gold hit record highs for a sixth successive session on Friday as the dollar fell to a six-month low against the euro, with expectations for further U.S. monetary easing driving strong demand for the precious metal.

Spot gold touched a peak of $1,317.10 and was bid at $1,315.65 an ounce at 1013 GMT (6:13 a.m. EDT), against $1,305.25 late in New York on Thursday. U.S. gold futures for December delivery rose $8.20 to $1,317.80.” Gold at record for sixth day

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Turd Ferguson's picture

Let's see if we can close today above yesterday's intra-day high. I doubt it, but, if we do we may see 1340-1350 next week.

Hephasteus's picture

Look closely at the gold chart. It's flattening out really hard. Just look over a year and a 3 year chart. The 3 year had all kinds of volatility and the 1 year has morphed into a nearly smooth line. It's really spooky and disturbing as it turns into a deficit spending plotter.

Turd Ferguson's picture

btw, for those keeping score at home, the Dec10 contract did close above yesterday's intra-day high. 1:30 Comex close was 1317.80.

unum mountaineer's picture

psst..hey, just the person I was looking for..

why is it that whilst we sleep in the US ag and au do their respective "thang", then approaching 9-10am..kerplunk? i'm up at 5-6 am every morning and notice that. why is that? insights? recs?

mrgneiss's picture

Check out Ed Steer's Daily gold (free) and Le Metropole Cafe (paid but you can do a trial subscription), they often go into the why's and wherefore's of the market as it moves from time zone to time zone.

cossack55's picture

The Bernankosaurus awakens from his slumbers at 9 AM sharp.

pachanguero's picture

Around 10:30 every day the banks/Fed/New World Order goons hit gold trying to stop the trend.  So far we are winning and they are losing.  Buy Gold and silver and take delivery of the physical.

fiftybagger's picture

yup, you nailed it.  I'm gonna start trading this one in my futures account for a quick pop

Internet Tough Guy's picture

That's when Gartman and Robotroll start shorting it.

JonNadler's picture

you mean there are still people who don't know about my friends at the Crimex? There's hope still!!

LoneStarHog's picture

Gold is INTERNATIONALLY trading as a GLOBAL CURRENCY, no matter what Douchenger states.

RockyRacoon's picture

Another visionary says his piece:

“. . .we shall urge the greatest of caution upon everyone, everywhere regarding gold. It is not just over-extended to the upside; it is hyper-extended. It is not just overbought; it is hyper-overbought. We cannot strongly enough urge everyone to avoid buying gold here and we shall go so far as to suggest that those who are long begin the process of quietly heading for the exits and to reduce their positions to the most minimal ‘insurance’ positions possible. Everyone should have perhaps 5% of their liquid assets in gold, but at this point anything beyond that level is excessive.”

–Dennis Gartman, September 29 2010

Excuse me while I run out to buy more on this contrary indicator....

Turd Ferguson's picture

Gartman is a fucking idiot. Not as bad as Prechter but close.

He's been advising caution against gold for over a year now. 

midtowng's picture

Did Prechter ever stop predicting $200 gold?

Turd Ferguson's picture

Not yet.

The best part is, as long as he keeps talking, the more worthless he proves himself to be.

ZeroPower's picture

Gold looks like a chart of the SPY, CRM, AMZN, or insert any other OVERVALUED asset here.

cossack55's picture

I thought gold was the barometer of value against what everthing else is measured. So it has no value/all value.  Very confusing, but I am glad I have been buying for years.  With a pinch of salt and a dsh of pepper....very tasty indeed. 

VK's picture

Exactly. Gold is trading inversely to the dollar. The anti-dollar trade has 95pc bearish sentiment on it. When was the last time 95pc of investors won? Dollar will go up and up hard and gold,stocks and other currencies will plummet.

Internet Tough Guy's picture

Good luck selling the rising dollar/plunging stocks trade to the Fed.

Sean7k's picture

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA...get a dictionary. Look up debasement of currency. This is sole reason for gold's advance. The only way the dollar goes up is through budgetary restraint and an increase in taxes, production and services. 

See that on the horizon? In the next three years? Five? Ten? 

SMG's picture

Look I'm as pro-gold as come, and I'd like to greatly increase my physical holdings (God, I wonder where I'm going to be able to safely keep that much gold)   Anyway  taxes are going to rise, and the republicans have said if they win in their "contract on America" or whatever it's called they're going to cut spending.  That should give us one last chance to buy in at a lower price.  Right?

Boy it's going to cost me if this is really the end of the dollar.  Hopefully I'm right and it's got another year or so left.


Shameful's picture

Again I was just a kid but seems to me the first contract with America was standard political fare, all talk no action.  I have little hope in the current crop of RINOs to live up to the very same promises they made 16 years ago.  They had control of the ship and they plundered it, how can we expect any different?  We don't have two parties, we have two factions in the Looter Party.  But their unified goal is to loot, we cannot expect anything different.

Trust me this ends with the dollar dead, they crossed the point of no return early on this decade and we are just going through the motions.  They cannot cut spending and survive politically (see Europe's response) and they can't keep spending and keep the dollar around.  Killing the dollar is actually the lesser of two evils for them because they will be able to point the finger at someone else, or claim national emergency and wheel the troops out.

SMG's picture

I agree this ends with the dollar dead.   But my question is WHEN does it die?  Next month, next year, two years?

If it's going to die in the next few months, then this runup in gold is wholly justified, if not there could be another gold silver load up opportunity.

I didn't have as much cash as i do know when gold was 5-800.   I'm hoping to get another chance on Gold/silver at lower prices.

Sausagemaker's picture

Partially disagree. Go read Parliament of Whores by P.J. O'Rourke for some perspective on the shenanigans that CONgress was up to prior to the 1994 Republican Revolution. Newt and Co did fix quite a few things before the Republicans became power drunk and lost their way. 


i-dog's picture

"republicans have said if they win in their "contract on America" or whatever it's called they're going to cut spending"

Right ... right ... right. And you believe them?

Pining for the Fjords's picture

SMG-  this is just my 2-cents, but trying to market time in this environment is basically waiting to be burned.  Decide how much you want to buy, call APMEX and purchase 10 (or 20) percent of your planned total buy each month, regardless of price until you are set.

I get what you are feeling- 1300+ for an ounce?  Really? But reasonable scenarios exist for both a large rise, and a large drop, in the coming months.  Bernanke gets sick of gold being touted as essentially the new world reserve currency? He just announces no new QE and the price takes a major hit.  On the other hand, he may decide that with the new, less statist congress coming in he needs to move fast or he may lose the chance, so he puts the petal to the floor and the price shoots to the moon.  I could go on with alternate, plausible scenarios on either side, but you get the idea. Long term, you will think of physical gold as cheap at 1300.  Get a plan, ease in, and stop giving yourself an ulcer trying to time your buy.  Marathon, not a sprint.

SMG's picture

That's good advice, thanks.  I hate that my future and the future of so many depend on seceretive decisions made by a few unelected aristocrats.  Why did we as Americans ever give them such power?

Pining for the Fjords's picture

I hear you.  Many others feel the same, and the awareness is growing.  I think of buying gold as a personal act of rebellion against these people and their methods- the usurpation of my rights as a soveriegn citizen, the confiscation of my work without my consent.  Join the resistance, my friend.

Cathartes Aura's picture

just wanted to chime in and agree, your advice to set PM "goals" and just begin speaks to a strategy more than a "play" - and that's what PMs are proving here and now. . .

the "personal act of rebellion" is strong for me as well, and was just the nudge I needed to begin, after months of reading here. . . watching the plays in the market now has more resonance since I put my money where my mouth is.

thanks again Pining.

tmosley's picture

Every time they abandon a currency, mate.

The only bubble here is in the dollar.

godfader's picture

What ever happened to the idiots predicting EURUSD 1.00 this fall? I don't hear much from them anymore.

cossack55's picture

They are too busy dousing the fires in Spain, Belgium, Ireland, Greece, etc.  An automobile fire takes a lot of foam to suppress, like an amerikan economy takes a lot of BS to suppress.

VK's picture

Still gonna happen. Too much bearish sentiment against the dollar. Deflation is still in play and will be for the next few years.

Internet Tough Guy's picture

Oil over 81, soft commodities up 40 or 50% in three months. Stop the deflation, I want to get off.

cossack55's picture

All true, but the pile of lumber and brick I abide in is certainly not going up.  Bummer.

MsCreant's picture

Mine did. Just ask my city and county government and my home insurance folks [insert low animal sounding growl about here]. 

RockyRacoon's picture

Cities and communities will look more and more toward tax increases for revenue.  Our little community just put a tax increase on the ballot.  Was defeated, of course.  But they will find a way of levying fees on all sorts of things like business licenses, building permits, parking fees, on and on....  Open rebellion will be the only way to stop it but that will happen only when it's really too late.  Once instituted, those "fees" are impossible to roll back.

MsCreant's picture

Telling me my house increased $19,000 in value is insane/funny. Taxes rose a few hundred dollars because of it. As did my insurance. If I am unemployed, even though I own the house outright, I might lose it because the increased taxes could be the straw that broke my back. Meanwhile I do not want the Eye of Soren around, God knows what they will say they can find, so I let it go...

faustian bargain's picture

I hope some day enough people wake up to the fact that these days, when a person owns a house or property, they don't actually "own" it. They're really just renting it from the government. When will we have real ownership?

Jerome Lester Horwitz's picture

I think we are going to see a significant increase in seat belt and DUI checkpoints and speeding tickets for 5 MPH or less. In the suburb where I live the cops hide in the shrubbery at stop lights and jump out and write tickets to unsuspecting drivers who are unfortunate enough to not have their seat belts on.

Vernon Wormer's picture

Been happening in NorCal for over a year now.

tmosley's picture

They're both falling.  Who cares which ship is sinking faster?  I want to get to shore.

PhattyBuoy's picture

Exactly. Every piece of "paper" is falling relative to Au ... this is baked in the cake for many years.

wiskeyrunner's picture

Just look at the magic index futures go, lift offer up up up and away.

Sean7k's picture

It is starting to make sense to convert dollars to gold or silver and then sell as needed for liquidity- weekly. Is there such a thing as gold mania in only 1% of the population? Or just smart money?

God, I am so tired of fucking central bankers and their world domination schemes...

wiskeyrunner's picture

In 5 minutes we will get some economic data that will send the stock index futures up to yesterdays highs, guaranteed!

septicshock's picture

How much gold is enough? A few ounces? A kilo? A ton? A thousand tons?