Wednesday, August 31, 2011

Gold marking time

Gold has been relatively quiet after the extreme volatility of recent days, a very welcome development. You can note the declining trend in volume as evidence of the more "tranquil" trading conditions. We are currently running into overhead selling resistance near $1850 with buyers either unwilling or unable to take it through this level without some sort of fresh news. Sellers meanwhile have been thwarted in any efforts to break prices significantly lower.

The present posture is one of consolidation with some buying surfacing down near the $1800 level and further below towards $1780.

A strong push through $1850 that can carry through the $1860 level would set up the potential for a push towards the recent peak near $1900.



There is some pressure coming into gold based on today's weakness in the HUI and the inability of that index to push through tough overhead resistance at the former all time high set back in April of this year. Last week the miners pushed up through the 600 level but could not quite muster enough strength to best that previous peak. Price then set back but has subsequently rallied back towards 600 once again, failing today to extend those gains and dropping off lower. For all that, one can still see quite clearly that the miners have been in a nice uptrend since bottoming out in mid June. The more time this index can spend above 580 the better the odds grow that it is soon to mount a breakout and begin its next leg higher.



Silver's status is similar to that of gold's right now. It is consolidating with a short term bias that is friendly. It is being prevented from moving towards $44 by selling originating near the $42.50 level. That will have to be overcome if this thing is going to have a shot at a stronger climb. Note that it is trading near the 50% Fibonacci retracement level from the April peak and May low.

Support is still down near $39.30.



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7 comments:

  1. AnonymousAugust 31, 2011 at 1:00 PM

    All the big players are waiting for some news -- any kind of news -- just as long as it's new news. The economy is still in shreds, but that's old news and doesn't count. Of course, it does count if one is a consumer, but that’s not the way the plutocrats and their minions view things.

    The IMF says our austerity measures aren't working, nor will they work in the near future, and the U.S. must write down mortgage principles, fast! The IMF is correct of course, but that news is way too new to matter to the big shots. They need to hear their new news from their own sources before they believe it.

    So the beat goes on...between you and me and the fence post, QE3 in some form isn't far off. No one can stop the bleeding, and the dollar is a lost cause. Might as well let it bleed out...buy Gold, sit tight and until things settle out.

    ReplyDelete
  2. alertAugust 31, 2011 at 1:17 PM

    Thank you Dan for your hard work!

    ReplyDelete
  3. 999SilverDogAugust 31, 2011 at 3:46 PM

    Great Blog, sound info, thanks Dan

    ReplyDelete
  4. LemmingAugust 31, 2011 at 4:03 PM

    Dan,

    Does silver look friendlier to you than gold right now? The volume on yesterday's slight advance was up. What was the volume like today (my firewall blocks the volume chart site)?

    -David

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  5. BlackSwanSeptember 1, 2011 at 4:04 AM

    silver better than gold? just load up 50/50 and enjoy.

    where's that gorgeous volatility gone? bring it on i say. made a ton of money on those wild swings, whilst the core holdings rise inexorably. Once Europe wobbles again we will see plus $2000 easy peasy.

    ReplyDelete
  6. BWSSeptember 1, 2011 at 11:42 AM

    This comment has been removed by the author.

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  7. rjvSeptember 2, 2011 at 5:51 AM

    Dan, I appreciate the time and effort you put into your blog!

    Thanks, Bob

    ReplyDelete

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