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Market UpdatePeter Grandich "It is amazing how many people think that they can answer an argument by attributing bad motives to those who disagree with them. Using this kind of reasoning, you can believe or not believe anything about anything, without having to bother to deal with facts or logic." --Thomas Sowell Is the world crazy or is it just me? I seem to ask myself this whenever I have watched CNBC-TV for a period of time. Maybe these talking heads are right after all?... Nah!!!! Americans have been robbing Peter to pay Paul and Peter is tapped out. They have bought into Madison Avenue and Wall Street's mirage that having more money and more things can only make you happier (which means a bus driver can't be as happy as the owner of the bus company). Thanks to this falsehood, places like public storage have flourished. Funny, our parents and grandparents didn't need to "store stuff." Does this mean they didn't experience true peace as we now do? ABSOLUTELY NOT! The "Don't Worry, Be Happy" machine on Wall Street has lulled the sheep to the gates of the slaughterhouse - again. You would think that after so many lambs were lost or slaughtered (thanks to the equity bubble bursting at the turn of the century), that the remaining herd and baby lambs would be wiser. Unfortunately, the real estate bubble that appears ready to burst can bring widespread carnage at a time when Americans have very few friends around the world willing to be there for them to help pick up the pieces. Oil $59 - Gold $419.10 - On July 1, 2005, my position changed. In my heart of hearts, I personally have no doubt a "bear raid" took place in the Comex pits. Since then, some very peculiar trading has taken place that I can't justify due to general fundamentals or technical trading. Will there ever be a "smoking gun?" Possible, but not likely. But whether we ever see one, I know personally I've now smelled one. The period of July and August is one of the seasonally weakest periods for gold. Whether the bears are able to break key support around $415 and even get us below $400 briefly isn't a major concern of mine long term. The fundamentals for gold have never been better. Mine supply continues to decline. Jewelry fabrication remains strong. Investment demand outside the U.S. is good. Will the day ever come that American investors sell their tech stocks for a mining company that they don't even know where the company mines? Yes, but not before gold hits and stays above $500. In my mind, such an event is not "if?" but "when?" Silver $6.93 - Platinum $863, Palladium
$1.81 - Base Metals - I began 2005 by stating that most base metals should make their highs in the first half of the year. I see little reason to change that view. I believe an economic slowdown is underway worldwide and a softening in commodity prices in general can be expected. I don't believe they will fall off a cliff, but I don't see much further upside until further notice. Copper ($1.65) for instance, may see a significant drop in the size of its 2004 deficit of about 675,000 tons to maybe as low as 250,000 tons for all of 2005. We could see copper down near $1.25 or so come early 2006. But this would be a buying opportunity, not the first leg of some downturn that takes us below $1. Uranium $29 - Peter Grandich Grandich Publications, Inc. provides research, analysis, and investor relation services for certain of the companies featured in the articles appearing in its publications (each a "Featured Company"). Featured Companies may pay fees to Grandich Publications, Inc. that may include securities-based compensation that would appreciate if the company's stock price rises. Accordingly, there is an inherent conflict of interest involved that may influence our perspective and provide an incentive for publishing favorable information with regard to a Featured Company. Grandich Publications has been given the right to exercise stock options. A complete list of options and share price (in Canadian dollars) is listed on the right. Furthermore, most companies have entered into agreements to pay Grandich Publications a monthly fee. The fee is listed on the right in U.S. dollars. The material herein is for informational purposes only and is not intended to, and does not constitute the rendering of investment advice or the solicitation or an offer to buy securities. The foregoing discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "plan," "confident that," "believe," "scheduled," "expect," or "intend to," and similar conditional expressions are intended to identify forward-looking statements subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, future events and the financial performance of the Company which are inherently uncertain and actual events and/or results may differ materially. Third party statements contained herein and information contained in any source cited herein are not endorsed by or adopted by Grandich Publications, LLC, nor has their accuracy been verified by Grandich Publications, LLC. |