Central bankers plan regulation talks with private bankers to review unsettled financial markets and determine an approach to reduce risk. Is this a panic mode meeting? We cannot tell but it’s ominous.

“Central bankers will hold talks with banking executives in Switzerland this weekend amid concern financial companies are rebuffing a push to increase regulation and temper risk-taking as the recent crisis ebbs. The gathering to discuss regulation will take place at the Bank for International Settlements in Basel, according to two Group-of-Seven central bank officials. The BIS invited commercial bankers, citing concerns that they are returning to the excessive-risk patterns that helped spark the global crisis in 2007, the Financial Times reported today. The meeting comes a month after the BIS urged central banks to take greater account of financial stability and published proposals aimed at forcing banks to hold more and better-quality capital and discourage leverage.” - Masahiro Hidaka & Shamim Adam Bloomberg.net

In our view, the global banks that produced the largest problems are doing it again to make money. Under current economic conditions these bankers have :

(1) not been corralled with new rules or controls

(2) they have been rescued and re-capitalized from the dead by central government bankers and taxpayers

(3) now that they’ve gotten away with the largest global robbery ever, we say they think they have no risk and if another bailout is required down the road they’ll receive help once again. The sad part is they probably will.

Summary

We did a forecast on gold in spring of 2009 at a New Jersey conference and said $1250-1260 on the December, 2009 futures. I think we got $1226, which is pretty close. After our current correction is completed I expect $1325 to $1375 this spring. Trading ranges are going wider and faster. Gold can easily swing $50 in one daily session.

After our new corrective base for silver is established at $16.48-$17.48, we forecast the March, 2010 silver futures reach a new intermediate high of $21.50-$22.00. Higher is possible.

The XAU shares index should easily rise up to 220 resistance after correcting down to 165 index support. For the fall of 2010, we are in a brand new and unknown XAU era.

The U.S. Dollar Index normally has the worst month of the year in December. Last month the selling was not as severe as one might have expected. For now, the March, 2010 Dollar futures are in a trading range of 77.50 to 78.50. The broader, longer term range from now through May, 2010 could be 72.50 to 80.00. Following May into next summer, the dollar sinks steadily and gradually toward the 72.50 price. It should be under 70.00 but other nation’s currencies are falling even faster and some of those trades are causing investors to move into dollars. On the other hand, dollar inflation could drop the index price further.

Be very careful as we move forward in time. Trading is going faster and more volatile with wider trading ranges in precious metals and other markets. Try to be in position ahead of time rather than locking yourself into trades at the very last minute. Futures traders should always use stops and shares traders as well.

Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert. –Traderrog.

Roger Wiegand is Editor Trader Tracks Newsletter
Courtesy: webeatthestreet.com

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