Finally, a Devere post worth reading.

Devere, thank you for your thoughts on the PM situation.

If any one is looking for a website to buy from there are many honest one's on the net if you don't live near a coin shop.

http://www.silvertrading.net/

[color="Red"]THIS IS IT - to your stations...
--Clive Maund
November 4th, 2006

One of the dangers of continually being close to the market, is that you can get lost in day to day detail, or even hour to hour detail, and end up not being able to “see the wood for the trees”. A way to counter this tendency is to use weekly or monthly charts, which filter out daily “noise”, and thus highlight changes to the big picture. As we will shortly see, weekly charts reveal that last week was a big one for gold and silver.

On daily charts it is not immediately clear that gold and silver both broke out last week from their lengthy triangular consolidation patterns, and this is especially the case with silver, although the application of trendlines does reveal that this occurred. On the weekly charts, however, it is obvious, even without trendlines.

The 3-year weekly chart for gold provides excellent perspective as it covers a substantial timeframe and strips out the noise of daily fluctuations. On this chart it is clear that gold staged a significant and sizeable breakout last week. It is also readily apparent on this chart that the triangular consolidation from the overbought peak in May was a perfectly normal reaction/consolidation back to the 50-day moving average that caused no technical damage, and, on the contrary has created the conditions for a sizeable advance by completely unwinding the overbought condition that existed back last May, as revealed by the neutralization of the MACD indicator at the bottom of the chart. Our minimum target for a new intermediate uptrend in gold is about $750 - $770. One gold dealer reported “minimal interest” in gold a few days back. Great - that’s exactly what we want to hear - you certainly don’t want to be buying something when every Tom, Dick and Harry wants in. ... <CONTINUED>

http://www.clivemaund.com/article.php?art_id=1189

The market may want a new intermediate up trend -- i.e., the start of the next BIG up-move now -- but will the Fed allow it? Saville thinks not. He predicts that gold will probably now move to between $690 to $750 or a bit beyond by February/March of 2007, but he also thinks, because of the too obvious inflationary signals such a move will engender, the Fed will step in and start raising interest rates again and squelch the move. Then, probably there will be a significant multi-month correction -- after which, the BIG gold/silver move will get under way. He hasn't yet said but I gather he thinks it will start sometime next year.

The market may want a new intermediate up trend -- i.e., the start of the next BIG up-move now -- but will the Fed allow it? Saville thinks not. He predicts that gold will probably now move to between $690 to $750 or a bit beyond by February/March of 2007, but he also thinks, because of the too obvious inflationary signals such a move will engender, the Fed will step in and start raising interest rates again and squelch the move. Then, probably there will be a significant multi-month correction -- after which, the BIG gold/silver move will get under way. He hasn't yet said but I gather he thinks it will start sometime next year.

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Devere, what's this mean for options?

Devere, what's this mean for options?

If you have an option that won't expire until Dec '07, then your have two choices:

1. Just ride out the next several months of ups and downs -- and wait for the BIG move sometime next year. Chances are good that you will be well into the money by Nov/Dec '07. Sell your option then or sometime in mid to late '07. This is the simpler strategy and the safer one -- because you're always in and don't have to make tricky sell-buy decisions and because should the jews/kwa nuke Iran or some such, you will catch the resultant gold explosion.

2. Sell when I sell in Jan - March and take your profits. I'll let folks know when I think this current move has topped out. Then, wait till the prices go down again -- and buy back in. #2 is probably riskier than #1 because it's difficult to know when prices have topped -- and to know for sure that they'll go back down significantly before continuing up. And then it's tricky getting back in at the right time.

I intend to do #2 -- partly because my options expire well before Dec '07. I'm taking a bigger risk because I'm trying to increase my position before the next BIG move. Hopefully, I won't regret that strategy.

[color="Blue"]Jim Sinclair’s Gold Compendium

Jim Sinclair's Gold Compendium has been tested and is ready for distribution. This compendium includes a broad range of articles on gold, technical analysis, currencies, bonds, derivatives and other important subjects that are critical to your understanding of both the gold and gold equities markets.

Written primarily by Jim Sinclair, with contributions from a host of other respected market personalities including Dan Norcini and Monty Guild, these articles appeared on Jim's online newsletter at http://www.jsmineset.com. To control bandwidth charges, public access has been restricted to this historical material which goes back approximately three years.

http://www.jsmineset.com/ARhome.asp?VAfg=1&RQ=EDL,1&AR_T=1&linkid=3395&T_ARID=3465

Looks like the correction is now over. It was comprised of two short down days. If you're not already in or you didn't get in during the last two days, not sure what to suggest now. Maybe just get in -- with an option or option spread, not a futures. Today looks like it is an important large up day so far (market still not closed though).

If you buy a long term option call spread here -- despite the large up trend recently (so you're buying high from a short term standpoint but you're on both long and short) -- and if the market turns around and makes a real correction (looks less likely now but who knows), you can buy back the short side of your spread at a profit, leaving you with your long bull naked option call. Just an idea -- for those who understand how option spreads work. In other words, long term option spreads are actually pretty safe even now.

Looks like the correction is now over. It was comprised of two short down days. If you're not already in or you didn't get in during the last two days, not sure what to suggest now. Maybe just get in -- with an option or option spread, not a futures. Today looks like it is an important large up day so far (market still not closed though).

If you buy a long term option call spread here -- despite the large up trend recently (so you're buying high from a short term standpoint but you're on both long and short) -- and if the market turns around and makes a real correction (looks less likely now but who knows), you can buy back the short side of your spread at a profit, leaving you with your long bull naked option call. Just an idea -- for those who understand how option spreads work. In other words, long term option spreads are actually pretty safe even now.

Market's closed. End result: the largest up move for gold in FIVE months and the largest up move for silver in FOUR months. The (two day) correction is over.

Silver had it's biggest fall backs this year since 1980 which was $2 dollars in one day? This caused allot of hustlers perhaps to dump what they had purchased on the run up from Oct. 05 at $8 plus to $15 plus in May.

We should be seeing a two dollar up day one day soon, or at least a one dollar plus day.

The catch 22 is that this is nothing to be happy about even if one owns PM's. because all the item's we buy from shoe's to plastic tarp's will be going up.

Still for those who have some money sitting in the bank for a rainy day or have a way to buy a little bit of silver, I would do it.

This is not about getting rich or making a quick buck, this is about todays money having the same buying power next year at this time.

Some fairly respectable sources say gold will go up LOTS higher. Or they are misleading us. What to make of this FT article? -- FJ.

http://www.ft.com/cms/s/ec0bdc54-6f53-11db-ab7b-0000779e2340.html

Gold predicted to break record high

By Chris Flood

Published: November 8 2006 19:08 | Last updated: November 8 2006 19:08

Gold prices and gold equities are likely to enjoy another three to five years of solid growth, according to RBC Capital Markets, which hosts its annual gold mining conference in London today.

Stephen Walker, director of global mining research at RBC, will tell the conference that the summer correction in gold prices has run its course.

Bullion will test this May’s 26-year high of $725 a troy ounce early next year, during the period of higher jewellery demand from India, he will say.

In 2007, investor appetite for gold and other base metals is expected to be lifted by rising global liquidity as the Federal Reserve cuts interest rates in response to slowing US economic growth.

RBC said gold could challenge its all-time peak of $850 a ounce, reached in 1980, helped by bullion’s growing importance as an alternative investment and rising risk aversion among investors.

The expansion of the middle classes in China, India and the Middle East is having a positive impact on demand, ending an extended period of de-stocking by jewellery manufacturers.

RBC forecasts that jewellery demand will rise 20 per cent next year to 2,700 tonnes, and will be the main driver behind a 10.6 per cent increase in total demand to 3,924 tonnes.

Total supply is forecast to climb by 9.2 per cent to 3,980 tonnes, with mine production expected to rise by 6.4 per cent to 2,655 tonnes. Mine output is expected to peak at 2,898 tonnes in 2008, with a steady production decline projected beyond 2009.

The world’s five major gold exchange traded funds have seen growth in their bullion holdings stagnate since breaching the 17m ounces level in mid-summer. But RBC said fund redemptions had been minimal, indicating that demand remained firm.

“Gold remains an attractive alternative asset for investors seeking alpha [above market returns] and for central banks wanting to diversify their reserve assets,” said Mr Walker.

Foreign exchange reserves are growing rapidly in Asia, the Middle East and China.

RBC said gold’s outperformance since 2000 of the main alternative foreign exchange assets (the euro, yen and sterling) would encourage these central banks to raise their gold holdings from the current average level of 3 per cent.

RBC also said gold equities offered good risk-to-reward ratios at current levels as they were pricing in a long-term average bullion price of $570 to $580 a troy ounce.

Does anyone have elementary questions about the way options work? I cannot give advice like Devere, but I'm willing to help people get started.

Silver bar

» Gold will top $850, says Newmont's Murdy

A spike to $15 forecast for volatile silver
Allan Seccombe
Posted: Wed, 15 Nov 2006
[miningmx.com] -- SILVER production is forecast to rise sharply in 2007 after a small increase in 2006, which is expected to see record demand from the industrial sector, GFMS said on Tuesday. Prices in coming months will be volatile, and could spike to $15/oz.

Mine production this year is seen increasing by four million ounces or 0.6% o on the back of higher output of gold and base metals from which silver is a by-product, GFMS said in its interim review.

Primary silver production will come down three percent this year, but overall, silver output will rise 16m oz in 2007, continuing to grow into 2008.

Silver prices are expected to track gold’s forecast rise in the coming year, GFMS said.

“GFMS expects significant price volatility, but, over the next few months at the least, a bias to the upside, with a spike to $15 very possible,” the London-base precious metals consultancy said in a statement.

In the first ten months of 2006, the silver price averaged $11.24/oz, a gain of 58% year-on-year. Silver was bid at $12.85 in late London trade.

Industrial demand, which accounts for half of total fabrication, will gain nearly a percent to reach a new record level, but slower global industrial production and a weaker electronics sector will see demand falling in 2007, it said.

On the supply side, scrap supplies are seen unchanged in 2006 and government sales will increase only slightly.

“There is strong evidence that Chinese and Russian sales have held up in 2006, probably due to the attractive price level. In addition, India looks likely to sell up to 30m oz into its domestic market,” GFMS said.

In India, jewellery demand has been hit hard by a shift into bullion and record high local prices. “Lower Indian fabrication explains much of the near eight percent year-on-year global fall forecast for this category.”

Investment demand for silver has been strong in 2006 and holdings could exceed a net 80m oz. Silver-backed exchange-traded funds accounted for nearly 105m oz of silver.

“At some point the ETF could start to represent an overhang, although, arguably, this risk is moderated partly because the ETF’s ownership is broad rather than narrow,” GFMS said.