UPDATE - GOLD, PLATINUM

my earlier hunch that USD may not fall further turns out to be partly correct at least for now, it may still be true overall, read on.

GBP and Euro are getting no where but AUD rebounded strongly [still it hasnt hit new high]. iron ore prices rose 65% this year on agreement between mining companies and major steel producers which lead to the runup of AUD.

you can now look at the charts above for the outlook of gold and platinum. the shangahi composite index SCI chart serves as guidance on how fast the runup in gold prices will lead to at least a short term peak. the fall will also be drastic.

the sci is about 1000 mid 2005 and hit 2000 nov 2006 [about 17 mths], then it hit 4000 mar07 [just 4 months, incredible breakout], then another 6 months it almost hit 6000. what are all these telling us, shanghai stock market [a closed one] is not as mature as the gold market, so it went crazy once it broke out.

now look at platinum, in about one year it rose from 1200 to 2100 almost 900 and percentage wise 75%. there are shortages, but also speculation, the final 600 rise in only 2 months. this is short squeezing no matter what fundamentals.

gold is also in a similar shape, it is worst. if it once hit 1000 above, it will correct sharply. the contrast with platinum is it is pure financial play since industrial use is not a great demand. the all time low 335 for platinum and 252 for gold happened roughly about the same time. the ratio at that time is 1.32 much less than the current 2 - reasons: platinum has a lot of industrial uses and demand supply is much tighter.

both gold and platinum charts point to excessive speculation and will hit a wall soon, it will then correct sharply which will hit AUD.