Today over all was very bullish as the index funds were heavy buyers of grains, in sympathy with the massive 30 dollar rally in Gold. That Rally of Gold was sparked by India taking delivery of 6.7Billion Dollars worth of gold, or about 1/2 of the gold which the IMF had been offering for sale..
The IMF is in the process of raising capital by liquidating a chunk of their precious metals..Be that as it may, we traded up to 1085 and change…The next stop for gold will be 1100, and then each 100dollar milestone will most likely be called off on a daily basis by our financial press…Obviously the real target which will get every one’s attention will be the 1,500 dollar an ounce level..
If there is continued inflation worries and demand for the physical gold on tap, I don’t see any reason why we can’t trade up there over the next few months… At 1100, roughly, we are talking about a 30 to 40 percent pop to get to 1500…
Silver, and most likely all the commodities will follow in sympathy… Any supply disruption will support higher levels in the grains as well…We are currently expecting another round of rain in the 10 day forecast.
This week will give farmers a chance to catch up with the harvest, but as of yesterday, beans were at 52 percent vs. 80 Plus, and corn was only at 25 vs. last year’s 50 plus…
Also we will have to see if there are quality issues for the grain that is being harvested now, and we will have to see if the delay in harvest will delay the planting of winter wheat… All in all bullish factors lining up on the plus side for the bulls…
Continue to watch the link between the dollar, crude oil and the grains…they are all intertwined and should be considered when initiating a trade in these markets…
Good Trading