One thing I want to point out is the open interest numbers. They are basically staying flat which is being reflected in the inability of gold to clear the $1365 level with any sort of conviction. It tells me that specs are not convinced that gold is a buy right now. We need to see that change, which will be reflected by a strong build in the open interest, if this market is going to power higher any time soon. Remember, speculators drive markets and if there are not enough of them in the driver's seat, markets will languish.
There still appears to be decent demand coming in on the lows which is friendly and his holding price together, but we need more fund money flows coming in.
Same thing is going on in silver to a certain extent. It made it to $30 where I thought it would catch the attention of the momentum funds but it appears to be encountering some doubters at that level. I find that rather strange especially given the backwardation board structure.
The weekly silver chart looks good but you can detect that stubborn resistance at the $30 level.
On the one hand we keep thinking this thing needs to break one way or the other. On the other hand, remember it DID BREAK, strong to the upside from what September? to New Years. If we spend six months backing and filling before the next move, that wouldn't surprise me in the least.
ReplyDeleteThanks Dan. That was an excellent and concise explanation. The blog is very informative and most helpful.
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