Monday, October 27, 2008

Do these Golden Ebay Bids Signal a Preliminary Market Bottom?

DJ Gold Bars Fetch Ebay Bids Far Above Spot Prices . SYDNEY (Dow Jones)--Gold bars are trading far above current spot prices for one troy ounce of bullion on the internet auction portal eBay, highlighting current strong demand for safe-haven assets among retail investors, traders said Monday. One Credit Suisse 24 karat pure one ounce bar had attracted 12 bids, the highest at $835 with the auction open for another 10 hours and 20 minutes. This is in sharp contrast to gold's spot prices, currently trading at $728.60/oz. Heavy selling from hedge funds and other investors in need of cash to meet client redemptions and margin calls have clipped gold from around $930/oz just over two weeks ago to a one-year low of $681.75/oz Friday, before a strong bounce lifted prices back above the $700/oz level. Another Credit Suisse one ounce bar, with 15 hours to go, had attracted 13 bids, topping $880. Retail investors seeking physical gold have forced coin and bar producers such as the U.S. Mint to ration supplies. "It's an anecdotal story, but the high bids on eBay illustrate the high level of retail demand. For that reason we believe gold will go up again once hedge fund redemptions wane, which should happen at the end of October," said one Sydney-based trader. -By Elisabeth Behrmann, Dow Jones Newswires; 61-2-8235-2965; elisabeth.behrmann@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=ho8PTXEg%2B5DfkckkGM%2BVJw%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones Newswires October 27, 2008 02:17 ET (06:17 GMT) Copyright (c) 2008 Dow Jones & Company, Inc.- - 02 17 AM EDT 10-27-08

3 comments:

Anonymous said...

Interesting contrarian take.

Anonymous said...

Any guess on the fed decision? And market direction for the rest of the week...

The Call Team said...

Futures markets point to 0.5% (50 basis point) cut. The violent rally today will not turn on a dime. Someone must have leaked the half point decision. Market is being talked down by many experts/talking heads (Doug Kass), who probably missed the quick
move; we feel the bear rally will definitely continue after the cut. Market will probably have some positive left field event hit soon; perhaps a big bank buy-out. Goldman and Morgan need to be taken off the board, then the S&P will gain greater traction. We are long bank stocks, looking for at least another 15% rally in the 'protected banks' by election Tuesday. NOV Options expire right around Thanksgiving, and we don't see the pessimists in the market being rewarded. Long portfolios ahead of Thanksgiving will be well fed, and we predict short portfolios will be head faked by chicken & crow. Things are bad, but stocks are oversold until at least Dow 10,000, then it could get choppy again ...
POTC feels stocks have discounted a lot of bad economic news to come. Any buy-outs, mergers, infrastructure or other stimulus plans, oil remaining under $76 (Katrina levels), and a McCain win would send us above Dow 11,000. An Obama win has not been discounted, as the 'secret vote' Union initiative will cripple the market in our opinion. Wal-Mart could fall below $40, and other large retailers will be severely punished.