Tuesday, June 24, 2008

Quote the Maven, "Nevermore"

I don't know if anyone noticed yesterday but there was a blatant attempt by someone, probably the government, to manipulate the commodities market into crashing. Just as the Saudis announced that they were prepared to increase oil production to accommodate market demand, someone dumped millions of ounces of gold onto the market, over the course of only a few minutes.

In response, the oil market barely blinked and continued to rise. The gold market was knocked back about twenty bucks an ounce but not down to the lower limits of the recent trading range, then bargain hunters began picking up the pieces and moving the market forward. Tomorrow, when the Fed declines to reverse any of the recent cuts in interest rates, look for commodities markets to begin a major leg upward in prices, with oil, gold and cereal grains heading to new highs and the equities markets to be breaking below major support levels, with the Dow heading for territory below 11,000.

1 comment:

beebs said...

You are correct, sir. Commodity prices will fluctuate, but I feel that grains and metals are in the middle of a long term bull market.

I called my dad in Iowa, they are not in the flood zone, but it has been very wet. Corn is above seven dollars. This is amazing.