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Golden Minerals is a junior silver producer with a strong growth profile, listed on both the NYSE Amex and TSX.
Message: some Gartman comments on gold today that are bullish
The movement against the Swiss franc is most unusual, but it is rather fundamentally warranted in light of statements made yesterday by Mr. Philipp Hildebrand, the Swiss National Bank’s Vice Chairman, and the gentleman usually called upon to make official statements regarding Bank policies. Speaking in the beautiful town of St. Gallen, Mr. Hildebrand made it very, very clear that the SNB is joining the Fed and the Bank of England in making quite certain that more than ample supplies of liquidity will be made available to the market, and that the Bank is prepared to do what it must do… including buying government and even corporate debt securities for its own account if that must be done. One could almost hear the global gasp of surprise by the hard money proponents anywhere and everywhere around the world when Mr. Hildebrand spoke. Mincing few words, Mr. Hildebrand said that The national bank states publicly and clearly: deflation is as undesirable as inflation… [and] the national bank will continue to act decisively to fight the impact of the economic contraction… [Further], a central bank can always increase the absolute amount of its own currency in circulation [and] the national bank could sell Swiss francs against other currencies without limits. In an extreme case, it could commit itself to buying foreign currencies at a fixed rate. The CHf has gone into a swoon since Hildebrand’s comments, and we suspect that it shall swoon a good deal farther once more people around the world are aware of what he has said and what he has meant. We suppose there have been more definitive statements made by ranking Swiss National Bank officials in the past, and we supposed that there have been more bearish statements regarding the Swiss franc by SNB officials in the past, but we do not know of them! In our experience, this is unprecedented, and it cannot be construed as anything other than manifestly bearish of the franc. Gold prices have fallen back from their very material strength of the day previous, but we shall consider this to be a correction, or consolidation, of the previous day’s inordinate and surprising strength. The technicians amongst us would call this an “inside day” wherein the price range of the past twenty four hours is overshadowed by the much broader range of the day previous. Usually such “inside days” are resolved in favor of the trade environment that preceded the “inside” session; in this instance, higher then eventually. At this point, we must reiterate the comments made by Mr. Hildebrand, the Vice Chairman of the Swiss National Bank noted on p.1 above. If the SNB is now embarking… or is prepared to embark… upon a tacit devaluation of the Swiss franc, those who had owned the CHf as a “hedge” against currency weakness in the US and elsewhere and who had owned the franc as a refuge, will turn to gold instead. It is the logical substitution. What Mr. Hildebrand has said is the singularly more bullish comment on gold we can recall. So, at the risk or sounding terribly un-original, for we’ve said the same thing time and time again for the past several weeks and months, we are long of a small sum of gold and we shall remain do, unless something material were to happen. Mr. Hildebrand’s comments come very close to being this “ something material.”
Indeed, since his statement, gold has moved from approximately CHf 940/ounce to CHf 995, and is about to break through the psychologically important CHf 1000/oz. level. Were we not already long of gold we would use his comments to get longer. However, we shall stick hard by our trading discipline and shall not add to the position until such time as spot gold is able to trade upward through $890. Given that spot is presently trading at or near $853, we needn’t be too concerned about being “forced” into adding to the trade anytime soon; but once the “world” become aware of the importance of what Mr. Hildebrand has said, gold’s propensity to make its way upward through $890 seems but a matter of time. We will bide ours time until then, however, with discretion always being the far better part of trading valor.
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