Well what an interesting week. FEAR is gripping global markets, Equities are crashing, Treasuries are BID, Commodities are deflating together with the commodity currencies like AUDUSD, and Gold (one of the safe haven plays) is BID as well right to the top of its existing trading range at $1,269 but failed to break out on Friday in New York, being held back by Silver which was shellacked back below its Point of Control at $19.83 before recovering slightly into the close. This can possibly be compared to the lead up to the Lehman collapse where both metals went insanely BID from lows (Gold up 20%), only to disappoint everybody by promptly crashing to new lows as liquidity demands and margin calls just pulled the rug out from under everybody as equities crashed around us. There may be bank failure coming here together with a Gold rally like Sept 17th 2008, but it is hard to argue against the overall deflationary winds. In summary in the short term, Gold may pop up into the trading band centred on $1,284 and break the down trend, but after that I still remain very worried about the deflationary forces out there. With Option expiry coming on Tuesday and the FED on Wednesday its going to get very risky for both short and long depending on what might happen. I guess it is still debateable if the move in Gold commenced from the Point of Control at $1,243. On the face of it we have to say no - this should imply a return to that level before direction for a sustainable move to a neighbouring trading range is determined. Certainly that is what happened with Silver over the last few days. One thing I just cant help remembering is that when the AUD is falling out of the sky together with equities, eventually so will also go the way of Gold and Silver in the short term. Make sure everybody you have plenty of dry powder because there is going to be a lot of stuff on sale in the coming weeks IMO.
Posted on: Sat, 25 Jan 2014 03:21:46 +0000
Trending Topics
Recently Viewed Topics
© 2015