Gold attracted relatively good buying today as it appeared SAFE HAVEN buying was back in vogue (at least for today). Chatter that I am picking up is that more investors/traders are growing concerned that we have dodged one fiscal cliff bullet only to have to face a ricochet sooner rather than later and deal with the whole problem all over again.
That led to weakness in stocks (along with the idea that earnings are going to disappoint as the numbers begin coming out) and instead saw money flow back into bonds, the safe haven currencies ( the Yen and the US Dollar) and into gold.
Also, anecdotal reports are coming in expressing very solid physical demand for the metal at current levels.
As stated yesterday, value based buying can provide a floor of support for a market and can bottom it but it takes more than that to actually propel a market higher into a strong sustained uptrend. That requires momentum based buying and so far that is lacking. When I wrote yesterday that gold was needing a catalyst to get it moving higher, my meaning was a TECHNICAL CHART catalyst to bring in hedge fund money on the buy side.
Right now, hedge funds are still liquidating longs or even adding to the short side to play gold. To get their friendly attention, gold will need to take out the resistance level noted on the chart and get at least TWO CONSECUTIVE CLOSES above that level or ONE SOLID CLOSE ABOVE the $1700 level that can then remain above $1680 on any subsequent price dip.
"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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