Daily Gold Chart and Market Comments

The big news today is silver. It is screaming higher dragging nearly every single metal upward with it. You name it, whether it was gold, copper, platinum or palladium, silver pulled them all higher as it hit a fresh 30 year high shattering overhead chart resistance as if it was nonexistent.  Once $31 was breached on the upside, terrified bears began fleeing in droves. That took the price up past $31.27, the recent peak which forced out more shorts and brought in a rush of fresh buying that ran the market all the way to $31.50 or so before it set back a bit.

The key to its rise was its refusal to break back down below $30.50, a level around which it has been oscillating for the past session and which had also served as overhead resistance in recent activity. It briefly dipped below that level but buyers came in very quickly recapturing it. Bulls then went to work and shoved it back towards $31 where the sellers had been attempting to hold the line in hopes of preventing a return to its recent peak. They failed.

Price not only took out $31 but went right through the peak at $31.27 paused for a moment, and then shot immediately towards $31.50 before it took that out as well. Impressive is too mild of a word to describe what happened today. Based on what I can see of the price chart, it now is on a footing to make a run at $32.25. It could pause here a bit to digest the enormous gains of today but if it does not, it will breach $32 with relative ease.

Open interest continues to increase in silver with the roll out of March commencing and traders shuffling into the May. The continued spec buying, especially from the Managed Money camp is steamrolling the shorts for now.

Gold is experiencing a similar increase in open interest with that number up nearly 6,000 in yesterday’s push towards $1380. This is exactly what the doctor ordered to give it enough impetus to dislodge the bullion banks from that level. It needs to continue if bulls are going to kick through the barrier near $1385 which is evident on the chart. A push through this level will give the longs some ammunition in the form of additional new recruits to take a shot at $1400 once again.

Corn notched another 31 month high in price today erasing the losses of the previous three sessions associated with the USDA manufacturing more paper corn with its data release showing an expected increase in corn acreage for the upcoming crop year. As I said at that time, that may be all well and good, it really did not come as any surprise, but it will not put one extra bushel of corn on the market until harvest time later this year. The market needs corn now; not then as evidenced by the surge in exports reported by the USDA today (over 1 million metric tons). End users stepped up and bought on the dip.

With corn giving the grain sector strength and with silver giving the metal sector strength, it is not unexpected to see the CCI, the Continuous Commodity Index, soaring to yet another brand new lifetime high.

Cotton is defying gravity as it is now an astonishing $2.04/pound having risen 82% in the last 3 months alone!  It closed at an expanded limit up today with over another 1000 orders waiting to be filled in the pool.

Apparently the surge higher in the commodity sector and the equity markets, which are also going vertical, was lost on the bond market which continues to trade in a manner suggestive that it is oblivious to all of this inflation. Yes indeed, the Dollar sank lower today, equities surged, commodities surged, and bonds responded by moving interest rates lower to no doubt fully compensate anyone stupid enough to buy them for all that sort of inflationary risk. Oh what a tangled web we weave when once we practice to deceive. The Fed continues to single handedly prop up the bond market through its primary dealers who are given their marching orders and more than happy to comply. It is just too lucrative scalping all the shorts.