"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Wednesday, May 30, 2012

Gold Continues to Attract Buying at the Bottom of its Trading Range

Gold has once again attracted strong buying down near the bottom of its broad 8 month trading range and has now bounced higher for the day. Strength in the yellow metal has pulled silver up a tad which was sinking under the weight of a collapsing copper market.

While some are ready to pronounce gold DEAD as a safe haven asset, the chart picture denotes otherwise, especially given the broad weakness in the commodity sector as a whole and the rallying Dollar, which continues its technical march towards the 84 level on the USDX. Whenever I see gold moving higher alongside Treasuries and the Dollar, it tells me that all such talk about gold being useless as a store of wealth, is simply false. The chart will tell you more than all the pontifications of the short-sighted analysts and pundits.

To get any sort of excitement going beyond the continued value based buying of gold, it will need to push through the $1600 level and not falter.

The mining shares are defying the general trend of equity selling today which is aiding the cause of both metals. Note that for the last two weeks, it is the mining sector which has been the bright spot in the otherwise dim US stock market.


  1. I wonder how many trips gold has to make to the 1530 area before enough is enough.

  2. I have seen many times in the last 10 years, at least, where the short term trend intersects with the longer term trend at which point the longer term trend reasserts itself. I know that gold is in a longer term uptrend, for very powerful reasons, and also that it is in a shorter term downtrend. At some point, whether its a price, an area, or something, that long term trend needs to reassert itself.

  3. Simply said the investor big or small is confused, more like being misled anticipating knee-jerk reaction while the PM buyers are catching the knifes ?

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