Gold was all over the place today but it really took it on the chin during the Bernanke press conference. It actually broke down below the bottom of its trading range but managed to recover somewhat and claw its way back into the range.
If it breaks below today's low, look out... it will test round number and psychological support at $1200. Right now, it looks tentative to me.
I repeat what I wrote earlier - based on my interpretation of Chairman Bernanke's comments, the Fed is hoping to strike a balance between deflation and inflation in the sense that they want to see inflation but they want to see it tame. What they DO NOT WANT, is a resurgence of deflation. A sinking gold price (below what level I am unclear) that stays down is a deflationary signal. Thus, I suspect the Fed would not welcome a gold price that is significantly lower than current levels, especially if that gold price were accompanied by a collapse in certain key commodity prices.
If that were to occur, in conjunction with a labor market that shows no signs of strong improvement, I could easily see the Fed INCREASE bond buying. At this point, we are going to remain heavily dependent on subsequent economic data releases for a clue as to whether or not inflationary pressures are increasing or not. I believe that the payrolls numbers are going to be even more significant than they have been moving forward.
I noticed that once again silver could not maintain its footing above the $20 mark for long. If growth both globally and domestically is indeed picking up, one would expect silver to move higher alongside of copper. The jury is still out.
Apparently tapering is good for stocks (Dow plus $200) so there is an interpretation at the Fed that both the economy and inflation are moving higher. Others ask if the Fed is simply giving up. Jim Sinclair
ReplyDeleteIn time the market will hand over the FED's head on a platter, they need Gold down to cover their massive QE's counterfeiting and zero percent FED funds rate. On the other hand they need Gold higher as Gold better than anything spells deflation. Deflation is the slayer of the FED and banks as we know them today in fact our whole debt ponzi economy. The FED has a way out I suspect soon the FED will be happy to see GOLD at much higher price. China has been preparing for this outcome buying Gold, mines, farmland, real estate worldwide.
ReplyDeleteTurd Ferguson comes up with another good idea. JPM is stopping for China. This is what explains the bearish wedges. Once this month is over the only buyer is gone until february.
ReplyDeleteSing Along
DeleteRim,
ReplyDeleteGold was moving up with the taper until in the last fifteen minutes the dollar soared from a recent low and killed the gold rally by twenty dollars and with it went the gains in gold shares. I wondered what drove the dollar the stockmarket went up about 100 points in the last half hour that may have been the reason but a strong dollar won't be good going forward.
Concord that was the acid test. The market was waiting to see how the DOW would perform if stimulus is withdrawn, and it looks like it doesn't need the steroids to advance. This was the uncertainty.
DeleteExpect more taper in 2014.
Prophet,
ReplyDeleteYou have got to be kidding. The taper or no taper is not going to be determined in the last half hour it will take weeks. They did it in Japan and the market soared for two weeks. I believe it fell hard after that and never recovered. This thing is going to play out separate from the gold price.
Anything is possible. But Japan didn't have international monies fleeing Europe and taking shelter in a country big enough to provide the liquidity.
DeleteEveryone thinks the DOW is all QE, but today it was proven to necessarily so.
Silver slipping badly in Asia along with base metals.
ReplyDeleteThe U.S. Consumer is bulletproof.
You call that tapering? The Federal Reserve has been following the markets forever, even the propaganda charts to backup their thinking doesn't change trends. Like the Fed can force consumers to spend money. Congress does a better job allowing bubbles to form by allowing criminal behavior than the Fed can printing money. After the one day dust cloud settles, the long term trends continue.
ReplyDeleteAlmost on the clock these early morning raids appear, 2 dumps totaling 9500 contracts in 15 minutes post Shanghai close someone is desperately trying to use Comex to get hold of real Gold perhaps they're getting worried about the 70:1 claims ratio. Perhaps the FED is still trying to find Germany's 300 tonnes for Christmas, very amusing stuff. When this market turns is unknown but it's going to worth the wait.
ReplyDeleteHi all,
ReplyDeleteIn a hurry, sorry.
I sold after gold broke the mlh inf of the pitchfork and made a failed attempt of pullback towards the mlf inf a few hours ago.
Now I'm definitely on the short side, until the ma20 is broken up.
The 1180 $ support zone looks very very fragile to me :(
See you,
comex gold breaks 1200
ReplyDeletenew yearly lows coming soon it would look; btw, whatever happened to Preditor1976? light snow showers in sparks
ReplyDeleteCIGAs being turned into ground meat.
ReplyDeleteToday we'll probably see the first $200 down day in gold once the June lows give way.
Mark please you can't be serious, how can this be?!
DeleteNo way it's going to happen Mark. With all the Chinese in line buying gold this is about to turn violently to the upside. You better keep stackin'.
DeleteAnd remember when you buy your gold (or silver) from a dealer they all short the market. Every stacker that purchases physical is actually causing an increased short interest. Isn't that clever?
Here is the chart.
ReplyDeletehttp://i41.tinypic.com/34te5pz.jpg
Daily time unit : I was waiting for my decision making that the market chooses between mlh inf of the green pitchfork as a support or break up the resistance of ma20 / ema15 then maybe 1268.
The market chose and provoked an acceleration down.
I was expecting a pullback towards the mlh inf at 1228 to sell. We nearly made it and I sold when we broke down under 1220 after the failed attempt which topped at 1225. The CDUR is heading down.
Weekly time unit : next week support area is...at 1180 $. Three supports there. There should be a lot of sport, but at this point, imho it will be a miracle if we bounce here before testing the 1180 support and last lows to check the solidity of this level. It seems the whole market wants this test.
Maybe bulls as well...so...I am short for now, waiting for the break.
Courage to all gold physical bulls...
Wow, Newmont Mining and Barrick trading as if the company will be out of business within 12 months.
ReplyDeleteRick Rule is buying them now. He's also buying PALLADIUM and PLATINUM. Of course.
Deletea lot of people buy companies all the way down until they on the pink sheets with a Q after the ticker.
DeleteNewmont now trading at a level last seen in Nov 2002, when gold was $300/oz. about 70% below its 2011--might have another 10% down. Kinross down 80% from its peak (2008).
DeleteTime to buy? Here is what would convince me:
80% top to bottom of Nasdaq 2000-2003, similar 1929 to low.
If you take 80% of 2011 HUI high you get 125-130.
Say gold corrects to 900. Say we get capitulation and the HUI gold ratio drops to .14 as in Oct 2000. That gives you a HUI of 126. That looks like a possibility to me. Just another way of looking at it.
Chinese haven't been buying.
ReplyDeleteIf they were the price would be going up, not down.
That's been the biggest load of crap myth sold to the gold bugs this year.
If anything, they are buying U.S. consumer stocks like Under Armor, which is making world record, lifetime highs today.
Come on Mark: I read that on King World News. It has to be true. China is buying! Keep stackin'!
DeleteThat's exactly it. Seems that as GLD inventories drain it's always China that is shipping out the physical and thanking everyone for it cause it's at such a "discount"
DeleteWell it was a discount at 1900, then 1500 now 1200 and soon 950. The Chineese can't be that stupid, so it all definitely doesn't make sense.
Same with the German's repatriating their gold. I don't think it's cause they want their physical in hand when the chaos finally arrives, it's cause they want to sell it.
Mark, either you're not getting it or you don't want to......the Asians don't want a higher gold price, why would they want that? Since they are accumulating large quantities of gold (and yes they are) then steady buying at lower price is fantastic for them. They don't need to knock the gold price down as it seems like there are others that will do that for them. Huge dumps in the wee hours on the NY Globex most likely.
DeleteI'm pleased to see that Fed has finally done the small taper as they've been jawboning this option for far too long. We need a few months to really see the impact. What will happen to bonds? If after all this they decide to increase QE the wheels will come off this bus pretty quick. The Dow is down 25 points as I write this and in fact only index that is up is TSX due to energy stock bounce.
Mark, you're certainly right. If / when we take out 1180, and 1100, we'll see huge waterfalls as people who bought around 1100 in late 2009 bail to not go into a loss position. Next Fib extension to the downside after 1180 is 1030. There's certainly no demand here at 1196, this thing can't rally $2.
ReplyDeleteHah hah - the DOW is down 25 points! What a massacre!! That's 0.15 percent, how statisticallly significant is that?. Actually it's positive now. Meanwhile gold is down 3.25%, and silver is down 4.4%. Which market is the one that's crashing and burning? Because it ain't the stock market, that's pretty clear. Gold rallied to 1200 and got rejected back under 1194, looks like we'll be taking out the 1192 low soon, and retesting 1178. Then it's waterfall time.
ReplyDeleteWe need a "Moment of Truth" waterfall collapse in gold, say a $200 move down to wash out the last of the hopers for good.
ReplyDeleteSomething so horrific, that these people will swear they will never go to a Q & A session ever again to get bamboozled and fleeced.
It will be a lifelong lesson learned.
And JPM and Goldman Sachs will be there to swoop up the "bargains" after those miserable hopers who have been clutching there rocks for 3 years are finally swept overboard, LOL....
man Mark you're an animal. Besides hopers only lose if they sell, what makes you think they will at these low levels, and does that mean no wash out and bottom?
DeleteI am afraid mark us simply right and providing real truyh over false hope. But then mark doesnt have any shares to sell of a company that was promised to be in production before years end as promised at the march q and a in london. Production cost 250 dollar per ounce it was said in london, mind you.
DeleteJasper what are you talking about? What company can mine for $250 an ounce today?!
DeletePlease tell.
The one that doesnt actually mine whose main revenue comes from Q&A meetings.
DeleteChina is loading up to the gills and buying all the way down. They were the buyers until yesterday, and kept this thing from collapsing. They will be the buyers at 1100, and 1000. They are buying the shares of miners, such as ABX and are installing their GS agents to swap out production. They will own the miners and production and won't have to lift a shovel. Meanwhile the West is loading up on paper.
ReplyDeleteSince China owns so much US debt they can dictate the terms of west surrender of gold and silver production. Just hedge physical.
two 5-figure days in a row. The tax man cometh in only a couple weeks. agh....
I noticed the bearish wedges and warned about this over the past week that the latest bearish wedge was about to break. China was the support of this wedge. That is gone until February. It will not be good for gold longs until then.
DeleteGoldman Sachs printing new 52-week highs.
ReplyDeleteI bet they made a fortune shorting gold this year.
Also spinning trillions of derivatives contracts, and being a primary dealer for trillions in U.S. Treasuries.
In a nutshell, the paper pushing companies are making vast fortunes while the mining CEO's have seen their net worths virtually vanish.
I'm expecting new world record prices for art, Hamptons real estate, and vintage automobiles this year.
At least the mining company CEO's have some good furniture and paintings in their homes, along with friendly pets to keep them company, so not all is lost.
LOL.....
Jeez you guys...get a life...
ReplyDeleteGood thing this kind of thing will never ever ever....never again...happen to the U.S. equities market...right? The Dow will go to 100k with no inflation!! PM's and commodities are done forever...I mean forever and ever more to eternity..the prices will fall to BELOW ZERO! there will be mass suicides by farmers, miners and investors while the US consumer dances on the corpses !
This is so typical of market bottoms and market tops..LOL !!
miners doing surprisingly "well." Perhaps China has shifted to buying shares from buying bullion.
ReplyDeletemy simple question ladies, is "where are you getting your information regarding Indian and Chinese buying?" And oh, btw, do you all look at all the currencies out there, or just the little dx index, because if so, you are still missing the big picture; sell beans, yen, gold and everything else; buy $ and stks, even though it might be for the wrong reasons; that is all in sparks
ReplyDelete