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A SLOW DAY FOR NEWS?

Much has been written in this space over the past year and a half how movements in the precious metals markets, foreign exchange, energy and interest rate markets, so often contradict FUNDAMENTAL economic principals.

As a gold bug, one of my biggest pet peeves is the manner in which the mainstream financial press “dismisses” or refuses to apply rudimentary investigative analysis to blatant identifiable irregularities in key, strategic financial markets.

The market commentary that typifies mainstream financial reporting is perhaps best summed up by this item brought to us by the folks at Reuters in conjunction with the Washington Post;

Gold down in volatile trade, dealers blame World Cup
By Lewa Pardomuan
Reuters
Monday, July 10, 2006; 3:37 AM

SINGAPORE (Reuters) - Gold jumped around on Monday, flirting with $630 an ounce but lacking strength to build on last week's gains despite a weaker U.S. dollar.

"Nobody is doing anything. Dealers in Singapore and Hong Kong are suffering from a football hangover after watching the World Cup. This is real," said a dealer in Singapore….

With a show of hands please, how many of you out there ACTUALLY believe that the World Cup of Soccer had anything to do with this 10 dollar haircut [which began the minute London came into work] to the price of gold?

I’m happy to report that I didn’t see too many hands, but for the few of you who DID RAISE YOUR HANDS – I hope you all realize that tonight is Major League Baseball’s Home Run Derby staged every year as part of All Star festivities. You should all be reminded that the Home Run Derby is always gold friendly.

Isn’t it amazing the lengths that some people will go – to explain something that DEFIES economic fundamentals?

Pirates Pulls Them In

Speaking of “make believe,”

"Pirates of the Caribbean: Dead Man's Chest" pulverized several records over the weekend, becoming the most successful movie opening in Hollywood history.

Just remember folks, Pirates [just like Central Bankers] have forever been trying to bury gold!

Today’s Market

Overseas equity markets began the week on a positive note with Japan’s Nikkei Index gaining 245 points to close at 15,552. Meanwhile, North American markets began the week mixed with the DOW up 12.88 to 11,103.55, the NASDAQ off 13.13 to 2,116.91 and the S & P up 1.86 to 1,267.37. NYMEX crude oil futures were “red carded” and subsequently fell .48 to close at 73.61 per barrel.

While it was reported that the World Cup of Soccer had a pronounced effect on precious metals, its effect on Interest rates was apparently nil. The benchmark 2-year  bond ended the day unchanged at 5.17%, the 5-year at 5.09% and the 10-year at 5.13%.

On foreign exchange markets, the U.S. Dollar Index gained .52 to 85.16.

The precious metals complex was indeed “head butted” with COMEX gold futures shedding 9.20 to 624.90 per ounce while COMEX silver futures lost .36 – closing at 11.12 per ounce. The XAU fell .29 to 145.00 while the HUI gave up 1.83 to end the day at 337.58.

Wishing you all a pleasant evening and hoping everyone’s portfolio gets a profitable kick out of the balance of the week!

Ciao for now!

Rob Kirby

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