Jim Wyckoff of Kitco has a very useful chart online that shows that support and resistance levels I’ve spoken about. You can also notice that since June, gold has been making slightly lower highs and higher lows. This suggests a major move is approaching. I of course, think it shall be to the upside. Please note there are gold options expiring today and the “gang” normally like to lean on gold during these expiration’s. I’m sure those who wrote $1,600 strike prices were not happy with the rally yesterday. Today’s trading shall be interesting because it can be one of the rare expiration’s where the “gang” get squeezed. It couldn’t happen to a *&^%$ bunch, including their biggest cheerleader – Peter Grandich
Warning: Potent Comments from Central Banks and a Politician below
As Peter noted today was an important day in that despite any attempt by the options “Gang” to get the Gold Market back down to cover up the $1,600 strike price. Comex Gold finished the Pit Session $7 Higher on the European Central Bank chief Mario Draghi’s sudden shift in rhetoric. In Central Bank language Draghi said that they were prepared to use “nonstandard policy measures as an option”. Sounds like they are getting so desperate that if arresting Angela Merkel or burning down the Eiffel Tower would save the Euro the Central Bank would do it.
Draghi’s comments came as the market is also anticipating further stimulus in the U.S. The European Central Bank using “nonstandard policy measures” will almost certainly contribute to general market pessimism towards Governments in General, and paper currencies in particular. When you have Luxembourg Prime Minster Jean-Claude Junker saying“We all know what to do, but we don’t know how to get re-elected once we have done it”, you know that you can definitely trust Governments, and its financial arm Central Banks, to avoidwhat absolutely needs to be done.
Undoubtedly it will also boost investor confidence in a bottoming $1,600 Gold market. A Gold market that has been correcting for 11 months from its 1,900 high of last August. .
A sharply weaker dollar also lent support to gold. A softer dollar tends to underpin all commodities by making them cheaper in other currencies, plus some market participants tend to buy gold as a hedge against dollar weakness. No matter how you cut it, the Gold Market moved higher on the movements in currencies and potential Central Bank actions. – Robert Zurrer
(US Dollar & Euro Charts Below)
