"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


Friday, June 1, 2012

Gold Achieves that "16" Handle

Gold's reaction to the payrolls number this morning was instantaneous - it shot up as if it was fired out of a cannon! As stated in the post on the mining shares this AM, gold is now fully expecting the Fed to move forward with a round of QE3 Sooner rather than later. It is this anticipation of a Fed move that has it blowing the recent hedge fund short positions out. Not only that, the ability to capture this elusive "16" handle and HOLD IT, has fresh money that has been sitting on the sidelines or in Treasuries (obtaining next to nothing for yield) willing to come in on the long side of this market.

Note on the chart that it has run to exactly the 50 day moving average which also happens to correspond to the resistance zone near the $1625 level. A clear push past this level, and it will go immediately to $1650.

Downside chart support is now first at the $1600 level followed by the top of the recent tighter range near $1580.


  1. Dan,

    It has been a very interesting ride. I have been watching and have almost pulled the trigger several times anticipating the Sept.08 downward spiral. Yesterday your post gave me a bit of renewed strength. I was debating pulling 50% of the miners. The divergence between the HUI and S&P for the last 30 days, made me stick it out one more day. Wow. I think the hotline between the white building and Bens phone is getting quite a bill, eh?

    Thanks Dan for all you do. A Robot you are not. A man of instincts and knowledge you are!!!!

    Have a great weekend. Volatility and MSM beatdown are sure to follow.

  2. Dan,
    Thanks for sharing your astute observations and prescient insights with us. I've been following your writings for several years now and I continue to be blown away by your ability to not only gather and process all of this market data but to then put it in such a delicious and easily digestible format. You are truly an exemplary human being and words cannot express my gratitude for what you do for us. Have a great weekend and I look forward to hearing you tomorrow on the KWN Markets & Metals Wrap.

  3. Dan is great. You have to hold on to your metal. There are lots of issues out there. Jim Sinclair tells you to hold on to your gold without margin. He knows gold goes up and down but he just wants you to hold it. Stop trading unless you are a professional. It will help you get to the other side. If you want to trade, check out my site for daily ideas.


  4. Hi Dan,
    where can one find a list of good precious metal stocks?

  5. Gil - Laurence - White Wolf - thanks for the kind words. We certainly are living through challenging times. All of us are learning as we go.


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