Precious Metals Market Wrap-up

1. Commodity Selling Getting Overdone? The CRB Index has definitely broken its multi-year uptrend. But the selling appears to be getting overdone with the Index's plunge becoming steeper and steeper. The question is, will we get a pause or a real relief rally?

2. Asian Jewelry Demand Key: Regarding the gold market, a key issue remains whether Asian physical/jewelry demand will resurface. There has been some anecdotal evidence of fresh buying in South East Asia and India. India and China remain keys for Gold to find some support. So far, despite anecdotal evidence of fresh physical buying coming out late last week, there just hasn't been enough demand to stem the tide of selling.

• Related Article: "Asia jewellers chase premiums up
  as bullion dips" http://biz.thestar.com.my/news/story.asp?file=/2006/9/15/business/15437028&sec=business

3. Cash Costs Up 10% to $306/oz. According to precious metals consultant GFMS, gold mining cash costs rose 10% in the first half of 2006, to a weighted average of $306, due to increased energy, labor and mine consumable costs.

• Related Article: http://www.gfms.co.uk/Press%20Releases/UP106_overview.pdf

4. The Yogi Berra of Gold: I don't know what to make of conspiracy theorist Bill Murphy and his over the top tirades against the Anti-Gold Cartel, but I am certain that Murphy is definitely the Yogi Berra of Gold. Bill came out with his latest Murphyism while commenting on last week's steep sell off in gold:

"The only solace on a day such as this is that if you are watching CNBC, or listening to other Planet Wall Street apologists, you have no clue as to what is really happening here."

Apparently, not having a clue as to what is really happening is a source of solace according to Murphy.

• Related Article: http://www.kitco.com/ind/Murphy/sep112006.html

5. Visit to the Local Jeweller. I stopped by the local jeweler here in Seoul on Saturday and inquired about purchasing some gold bullion. They are selling and buying ingots of 37.5 grams of 99.9% pure gold at a fairly reasonable 5.26% buy-sell spread (in comparison, Kitco.com's spread is 5.87% for 1oz Gold Eagle and 2.71% for 1oz bar).