Three Morgan analysts were reported today as issuing some research which essentially is calling for a bottom in the gold market. That is what Dow Jones is reporting from Barron's Blog.
They were especially upbeat on some S. African miners, most notably Harmony and Sibanye. They were downright negative on Randgold and not at all enamored with Anglo.
Regardless, the report was enough to have investors chasing gold mining shares today as well as putting a bid back into gold over at the Comex. It did seem to me that as the session wore on and as news about the call became more widespread, gold continued to move higher. Nothing like a big name bank to give traders/investors their convictions....
You do have to ask why JP Morgan has been loading up on all that gold when it comes to the Comex delivery process. Hey, nothing like acquiring lots of the metal and then letting your analysts give the market a bullish call which essentially guarantees that the price is going to rise and you are going to secure some excellent profits.
It will be interesting to see how the "gold is always manipulated all the time" guys and gals are going to deal with this. AS I have been saying, the big bank(s) have been buying gold - why would they be interested in capping it now that they have amassed so much of it? They have been buying from the hedge funds who were dumping it. That is an incontrovertible fact.
From a technical analysis perspective, gold's ability to hold support down near $1,220 - $1,224 was very constructive. It is now challenging firm overhead resistance. Note that it has moved decidedly above the 50 day moving average which is also constructive but more importantly, look at the DMI lines ( Directional Movement Indicators). The +DMI or Positive Directional Movement Indicator has now touched the -DMI or Negative Directional Movement Indicator Line for the first time since October of last year. What this means is that the bulls are very close to gaining control of this market, if they have not done so already. I personally want to see the price push through $1260 on the topside at a bare minimum to confirm that the near term trend has changed.
"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
Trader Dan's free work will soon be available at www.traderdan.biz