As those of you who regularly read this blog know by now, my favorite indicator for measuring investor confidence/complacency is the Volatility Index or the VIX.
Notice how the index initially soared higher when the news that the Fed was tapering to the tune of $10 billion. A large number of investors panicked. However, the reaction following that was one of increasing confidence due to both the wording of the FOMC statement, and, Chairman Bernanke's comments during his last press conference.
I maintain that gold needs something to impact CONFIDENCE before it mount a SUSTAINED RALLY HIGHER. With the VIX falling, and the stock market soaring into new all time highs, gold is looking for some friends right now as there is nothing on the radar screen of investors AT THIS MOMENT, to give them a strong reason to chase gold prices higher.
Now the key for gold is whether or not it can hold chart support near $1220. If it loses that level, it is going to test round number psychological support at $1200.
I will get a chart of gold up a bit later today. As you no doubt realize, it has been a very busy day for traders.
"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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