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Daily Digger - Thursday Feb. 24, '05


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I mentioned this late on Wednesday's thread but feel that this is big for Precious metals future .

 

The 2005 Federal budget was released Wednesday afternoon and the biggest news for Gold was that Canadians are now allowed to invest in Precious metals inside their RRSP (registered retirement savings plan) . Previously no hard assets could be held within the plan and the only way to circumvent this rule was to invest in miners stock or in Fund like CEF:AMEX that held bullion directly .

 

We can now invest in Bullion or in certificates inside the plan allowing many canadians who could not afford to invest in metals outside the plan .

 

Also a big move was that the RRSP limit will be increased from $12000 per year to $22000 per year in 5 years . Which means that a person earning over $60000 will see their allowing investment limits into the plan increase and will allow a person earning $100000 to now invest over $20000 per year versus the current ceiling set at $12000.

 

More Money flowing into RRSP's and now this money can flow into Precious Metals .

 

A very big change and positive for precious metals demand . First China opens up the system to it's people to invest in Gold ,and now Canada makes it easier to hold metals inside the retirement plans where a lot of money is currently parked.

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Great Vital.... glad to see it....

 

The latest news after the Buck dump and South Korea's announcement is....

DOLLAR DAMAGE CONTROL IN FORCE and as usual

The Fed has been VERY active in managing our ?inflation expectations."

http://www.financialsense.com/Market/daily/wednesday.htm

 

deception police are hard at work....

 

the good news is inflation is "well anchored" according to Sir Al

interpretation: it's hear to stay big time....

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Still possible we get a short runup here in the miners for a few days. Nice recovery today in most of the shares I watch. 432 held Gold and the 50% of the range 6.30-8.15 in silver held on today's decline. Although I look for a push down after this little rally left looking around it seems as if we have turned the corner on an intermediate term basis. For the risk adverse investor I still like NG WTZ SSRI.

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XAU:

 

Not wishing to rain on the parade, but it's time for short term caution.

 

Here's what to watch respecting that blue 3 wave move on the XAU chart:

 

1. Where blue c=a, target is 101.87.

 

2. Where duration of c=a, it's today. 5 days. Both fib numbers.

 

3. 50% retracement of the November/February decline met at 99.49. 61.8% is 102.30.

 

4. Overlap at 100.53, which I've labelled red "B", confirms the red ABC is over. Resistance is at 101.31 on December 15th

post-1352-1109224626_thumb.png

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You know, you may think that the commodity bull would slow if the economies of the world start to wane....

http://www.kitco.com/weekly/paulvaneeden/jan212005.html

 

but if oil demand continues and the dollar value wanes while the CRB continues to kick off signals of a commodity bull....

 

then the upward pressure of oil and a falling dollar will most likely still provide upward pressure on commodity prices

 

remember....

the upward pressure of dollar inflation will outstrip any and all downward pressure that computers and better machinery have done to provide a cheaper and better lifestyle at a faster pace ...

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