Both gold and silver have seen the return of sellers late in the session as the vigorous buying that marked the early part of the session has seemed to have runs its course for now. This is occurring while the mining shares are surrendering some of their gains. There still remains about an hour or so of trading in the equities before the bell rings so there is time for a last minute surge of short covering/fresh buying, but what started off looking like a very strong day in the mining sector appears to be fading. We'll see what happens on the close.
As far as the metals go, the short covering that took place earlier today was nearly identical to what we experienced on Wednesday this week. In both cases price had dropped down to the $1210 level where it uncovered very strong buying. That reinforced this level as important chart support but what it also did was force some of the bears to once again cover after they sold the rally. The resultant short covering brought in some fresh bottom picking which scooted the market sharply higher but then the bulls disappeared.
This leaves us with the downtrend still intact but with bears probably getting a bit nervous about just how much downside remains in the market.
The gold shares MUST CONFIRM a bottom is in this market before I will feel comfortable that the worst is over for gold. If the shares cannot move higher, there is a good chance that bears are going to attempt another retest of that $1210 level once again. That level is now HUGELY important from a technical analysis standpoint.
Silver could not regain the $20 level. It still remains a teenager. Price action in there is disappointing to say the least.
It is going to be interesting to see the Asian response to all these theatrics come Sunday evening.
As you can see, there is a huge oversupply of physical gold, simply not enough buyers to absorb the swamped selling that hits the tape day in, day out.
ReplyDeletePeople want out of gold.
They want in U.S. stocks and Bitcoin. Supply and demand move price, not "nefarious central planners", LOL...
However, there appears to be an acute shortage of U.S. stocks, as names like Google are hitting world record highs today.
Notice how the jobs and economy are slowly improving. The slower, the better, for that means no inflation pressures, and the economic boom that will follow will be the longest and strongest in recorded history.
Stay in the system.
Your financial well being depends on it.
Hi Mark. Sorry I posted things addressing you in a sort of rude way. Weeks or months ago. Actually, it is interesting to note that you were right in the short run. I wish you well in the long run also.
Delete-Peter
I wonder how much the miners will be pressured by tax loss selling.
ReplyDeleteTax loss selling may come into play regardless of where the traders feel the market could be heading.
Do any hedge funds sell for tax purposes? Or are too many hedge funds offshore and/or lightly taxed?
We should soon see if there is an over-supply of physical gold, but don't confuse the "day in, day out" selling of paper gold to be the same as the selling of physical gold, LOL.
ReplyDeleteSome of you sound so cock-sure that the price of an ounce of gold will go to sub-$1,000 and I hope you're right. I also hope that the timing is coincident with the arrival of my yearly bonus check, LOL.
Be careful not to confuse what people want with what lemmings think they should be in, LOL.
Also, be sure to stay in the system. Someone's financial well-being depends on it but it might not be your own, LOL.
Happy Friday to everyone!