"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

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Wednesday, August 1, 2012

Gold Chart updated

Here is an updated 12 hour gold chart showing the resistance level between 1620-1630 which so far has been able to hold gold's upward progress.

Note that gold did spike below the $1600 briefly out of disappointment with the comments from the FOMC but rebounded as dip buyers believe (hope springs eternal) that the Fed will certainly act next month. Also some are expecting some gold friendly statements from the ECB as far as measures they will undertake to support the Euro and deal with the sovereign debt issues over that way.

Regardless, the market failed at the upside of the newest congestion zone and thus remains trapped within that pattern albeit with a slight upside bias at this time.


  1. Hi Dan,

    Thanks for the gold chart and commentary. Do you have any comments regarding silver?


  2. I think I know what quicksand feels like now. Just as you think you are getting free of it, it pulls you right back in. Just like it looked like the bearish grip on the metals was giving way, it pulled itself right back into the camp. Only a close over 1680 will mean anything to me anymore. Otherwise is just range bound, for reasons that are really hard to fathom. Like the dollar rally.Even the martians are looking at that and laughing.

  3. As I said here, the Fed did not need to do anything, which is exactly why they announced nothing new today, as I expected. The ball is in the ECB's court. I would expect the ECB to do something, and I could be wrong, but whatever it is might be euro-negative and dollar-positive. On a purchasing power parity level, the euro is overvalued anyway and is due for further downside.

  4. While the PM prices stay in this range, I can't help but see it as an extended opportunity to add to my physical position. And I saw today as a missed opportunity for the central planners, who must have been hoping that the "disappointment" of no immediate QE would drive the metal prices deep into submission. To me, today's action after the big "disappointment" was positive. My questions are 1) Is there a chance that strong hands show up to buy these dips, not just traders strung out on the hope of eventual QE? and 2) Do strong hands who want to take delivery of the physical metal even bother trading on the Comex?

  5. Gold has every reason to skyrocket out of this area today. Its been in this trading range for such a very long time. Its a bit hard to understand anymore. Maybe it is waiting for an invitation from the pope. I know there has to be an explanation. But it eludes me at this point.

  6. There is too much advertising by less-than-upstanding gold-related resellers. This turns off many investors, especially when they figure out that they cannot make a profit on those 'special deals' unless gold moves up by well over $50/oz.
    On top of that, the mining stocks are totally without upside momentum - so no interest/buzz is there, even though they are undervalued. When I see the mining stocks showing a mid to long term bullish signal again, things should get very interestings. Otherwise, gold is 'dormant' for now.


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