I am wary of Bernanke’s sudden change of heart on headline inflation. It confirms my suspicion shared by many readers that the Fed is deliberately bringing about inflation and currency debasement to cushion the effects of debt-deleveraging. This amounts to a soft default on America’s debts.
via The Fed is a Rogue Elephant wonkish rant – Ambrose Evans-Pritchard Telegraph Blogs.
Since its breakout on July 15th, silver established medium-term resistance at $42 before retracing to test the new support level at $38/ounce. With gold in an exponential up-trend, support is likely to hold and recovery above $40 would re-test $42. In the longer term, breakout above $42 would signal an advance to $45/ounce*.
* Target calculation: 39 + ( 39 – 33 ) = 45
Economist Nouriel Roubini says the risk of a global recession is greater than 50 percent, and he’s putting his money in cash.
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The Swiss National Bank could ease monetary policy further without having to resort to currency interventions to counter a soaring franc, Vice Chairman Thomas Jordan was quoted as saying on Thursday, as investors speculated over the bank’s next move.
The franc dropped 5 percent against the dollar and the euro after Jordan declined to rule out any measure that was compatible with independent monetary policy, including temporarily pegging the franc to the euro.
via UPDATE 4-Swiss eye more steps to quell franc rise | Reuters.
…… the SNB may slow appreciation but is unable to prevent it. Other central banks (e.g. BOJ) have tried and failed.
CME Group, owner of the world’s largest futures market, raised margins on gold by 22 percent. The minimum amount of cash that speculators must keep on deposit for an initial account increased to $7,425 on a 100- ounce contract from $6,075.
via Gold Falls Most in 7 Weeks on Stocks, Margins – Bloomberg.
…..time for caution on gold/gold miners until the market adjusts to the higher margins.
The Swiss Franc encountered resistance at $1.40 but weak retracement indicates an accelerating (exponential) up-trend. Breakout above $1.40 would test $1.50*.
* Target calculation: 1.40 + ( 1.40 – 1.30 ) = 1.50
The Euro continues in a bearish descending triangle against the dollar. Breakout below $1.40 would signal a decline to test support at $1.30*.
* Target calculation: 1.40 – ( 1.50 – 1.40 ) = 1.30
The Australian Dollar continues in a downward trend against its Kiwi counterpart. Recovery above $1.26 would test the upper channel at $1.28, but breakout below $1.23 is just as likely and would continue to test the lower channel border.
* Target calculation: 1.28 – ( 1.32 – 1.28 ) = 1.24
The Australian Dollar broke support at $1.04 against the greenback, signaling a correction to the long-term trendline. Support at parity has so far held and recovery above $1.045 would indicate another test of $1.10.
* Target calculation: 1.04 – ( 1.10 – 1.04 ) = 0.98
The greenback is testing weak support at ¥76.50. The BOJ is unlikely to succeed in preventing further appreciation of the yen, to a medium-term target of ¥73.00.
* Target calculation: 76.50 – ( 80.00 – 76.50 ) = 73.00
