Hello friends, I have a quick post for you as I'll be traveling for the next three weeks, and with so much stuff going on probably won't be able to post till February. So, gold hit the yellow channel Friday (see above chart) and bounced off strong [1/5 edit: these charts reflect COMEX close, gold was up another $10 and silver almost 30 cents]. I sold my puts... I have no clue where the metals are headed in the short term. It seems somewhat absurd that gold is trading below where it was before QE3 was announced (much less QE4). Recall that after practically every Fed event for over a year and a half, gold and silver would sell off (ostensibly) because QE wasn't announced. Sure, it seemed like eventually it had to be announced, at least to metals bugs, but one in the hand is always greater than two in the bush. Uncertainty is uncertainty. And there were lots of arguments floating around, especially by mainstream pundits, that QE was a non-starter because it wasn't working or that it wasn't needed (insofar as the banks were saved and unemployment numbers were slowly recovering) or that it would only be an option of last resort (e.g. it would take a big equity sell-off to justify it) etc. But no, we got QE and open-ended QE at that, and gold has fallen. Also, on a related note, gold's upside action seems to defy what you'd expect in a market dominated by momentum traders. As a case in point, I mentioned in the comments of my New Year post that I expected Wednesday's rally to be quickly erased to close the week. That's just how things have gone lately when the charts start to look good. Seems to me Ed Steer's term of "not-for-profit trading" is what's going on. At any rate, it can't be ruled out.
Anyway, seeing as gold on the linear chart has just touched the bottom of a very conservative, long-term channel, you gotta believe a new low next week (as happened Friday during overnight trading), makes the red line the next target:
I've begrudgingly started looking at Fibonacci fans. In the past I've found them useless, but it appears to be dictating silver's action pretty well, or at least giving off that illusion.
Silver and the CCI index go in the same direction, so this chart is important. Note the CCI has once again fallen below its 200-day MA (blue) and is wedged between it and the 50% re-tracement line. It would be bad for the metals if it falls through.
Finally, the ^HUI and "Gold's Safe Haven Quotient" chart. Despite a wild week -- nothing doing...
|Gold stocks actually finished up for the day on Friday . . .a good sign.|