Morning Gold Fix: August 2
Commentary courtesy of www.fmxconnect.com
Why the Rally?
weeks activity in Gold was a welcome respite from the last month’s
blood bath for the longs. What we are curious about was the reason for
last week’s rally. Was it:
1. Small short squeeze on the physical side, and a sign of things to come?
-Would be nice, and combined with recent spread and GOFO activity, we’d say hopefully
2. A Technical dead cat bounce before the trend lower continues?
-High probability that this was a pause in the trend and partly caused by #1 above
3. The market reassessing the BIS swap deal somewhat?
-Don’t think so, but I for sure am reassessing it as a bullish fundamental watermark. More tomorrow
4. QE2 beginning to be priced into the markets?
-With all the deflation
talk last week it seems hard to believe. But witness the activity of
Commodities in general and you see the reflation game possibly coming
back to the forefront.
We are fearful that this down trend has
a way’s to go, but are less likely to sell dips now. Consistent
momentum to the downside may be drying up. A wash out may occur, but we
will buy that now.
We aren’t buying strength, but will buy a pullback after a break out.
Gold Technicals (Courtesy of Global Research and Investments)
DEC GOLD Resist: 1189*-119150, 119810* ST Trend: Down
(118390) Supprt: 117440, 116970, 1160-1158 Obj: None TRP: 1198.10
Overall the market is bearish, but selloffs have stopped against weekly
support associated with the 1160- level. A close under 1158 is needed
to resume selloffs into the 1145-1135 zone. The rebounds off 1160 late
last week calls for recovery rallies to test 1189* resistance. A close
over 1189* alerts for a reversing turn to start a correction phase and
test 119810* for a bottoming turnaround. Trade capped by 1189* alerts
for a secondary drop against 1160.
opened Friday’s trading at $1168.2 per 100 troy ounces. For the second
straight day, the metal gained, rallying almost 15 dollars before
closing the day at 1181.7.
gold was down 2.3 to $1179.4 per 100 troy ounces as of 8:46 AM EST,
this morning. The September U.S. dollar index was down .300 to 81.355.
October platinum was up 16.1 to $1592.9 per 50 troy ounces. Silver was
up 32.2 cents to 18.325.