"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


Tuesday, September 4, 2012

Gold Hits $1700, Eases off a Bit

Gold bulls managed to push the yellow metal to the psychologically significant $1700 for the first time in months. As can be expected, it could not hold ABOVE the level as selling from both fresh short sellers and some profit taking from longs, surfaced on the first approach to this round number.

Gold has a history of pausing around these even or round numbers, retreating, consolidating a bit, and then pushing through and moving to the next resistance level on the charts.

It looks to me like the weakness in the gold mining stocks in today's session, which are feeling spillover from the generally lower stock market, is enabling the capping action at $1700. I would personally like to see the HUI power through the 460 level as I think it would enable the gold bulls to beat back the bullion bank selling at the highs of today's session.

Incidentally, Euro Gold, or gold priced in terms of the Euro, is within a mere 20 euros or so of its all time high!

Silver is once again leading Gold to the upside as this market is now running on pure momentum as hot money pours in chasing prices higher. I am looking at $32.50 as a resistance level that needs to be cleared if silver is going to mount a push to the all-important $35.00 - $35.50 region. So far silver has pushed within .07 or 7 cents from $32.50 where the sellers showed up. Bulls however as of yet show no signs of growing weary and are buying dips in price. Support is rising and comes in at $31.50 near today's low and then $30.00 - $30.25