Thursday, April 21, 2005

US Foreign Debt and Gold Price of $518 - $529

Jim Sinclair of says Nothing has become as important as the TIC report figures (U.S. Foreign Debt) in terms of their impact on the US Trade Deficit. Sinclair says the reason for this is that the TIC reports provide an indication of the ability of the US to continue to finance itself with Foreign Debt.

Sinclair suggests that should the US Foreign Debt fall below the US Trade Deficit numbers then the market will be on a razor's edge waiting to see the following month's figures.

Sinclair says "That could well be gold at $480 and the USDX at say, .7800. Should the second month confirm the TIC is trending below the Trade Deficit, then the dollar will encounter severe selling pressure and huge spin to hold it. That well could be .7600 on the USDX. If the spin fails for the third consecutive month, then all hell could break loose and one could expect .7200 on the USDX and gold at $518-$529."

The U.S. Treasuary provides updates on US Foreign Debt and Major Foreign Holders of U.S. Treasury Securities on or about the 11th business day of each month, with a 1.5 month lag.

The release dates the reports on U.S. Foreign Debt are May 16, June 15, July 18, Aug 15, Sept 16, Oct 18, Nov 16 and Dec 15. The time of TIC report release is normally at 09:00 a.m. in Washington D.C.

To get updates on U.S. Foreign Debt visit the U.S. Treasury - Treasury International Capital System web site.

Bob's Gold Price column has also been convering the topic of Foreign Holdings of U.S. Securities.

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