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Morning Gold Fix: June 10, 2010

Submitted by Tyler Durden on 06/10/2010 09:02 -0400

Yesterday’s sales pitch by Ben Bernanke went over well at first for market bulls. Stocks rallied and gold sold off. But the day did not close on such an optimistic note for equities. Gold however, lost more ground as the markets closed and we think a short term market top may have been put in. There has been some chatter about Ben’s sidestepping a question or two about the yellow metal’s divergence form the bond market’s inflation expectations. We took note as well. What we also noted was the Fed Chairman’s comparison of gold to other commodities. We think that his premise is false. Yes, gold is a commodity, but it is not an industrial one. Gold has currency properties and in times of mistrust it behaves as such. Do the math.

Today the Euro is stronger and gold is following though to the downside. If the sell off continues, look for a pause at the 20 day moving average at $1,216.00 . Other than that it looks choppy between 1225 and 1245. August gold was down 1.4 to $1228.5 per 100 troy ounces as of 8:20 AM EDT, this morning. The June U.S. dollar index was down .465 to 87.94. July platinum was down 1.3 to $1525 per 50 troy ounces. Silver was down 14.4 cents to 18.05. For Market Prices Click Here

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Thu, 06/10/2010 - 09:24 | 405689 Hephasteus

I think they'll hold it together this week. Doesn't matter. Unfunded pension liabilities are stil a screaming angry baby. All the selloff can fit into 3 exact patterns today. Someones paying bills.

Thu, 06/10/2010 - 09:47 | 405727 Kina

The criminal manipulators are everywhere doing their business.

Thu, 06/10/2010 - 09:58 | 405743 lsbumblebee

I can hear the orchestra playing. The takedown in gold this morning coincided with this report that says China regards the gold market as too small for asset allocation, as if to imply it is no longer interested in purchasing gold. The story, naturally, was linked by Kitco. Thanks Jon.

http://www.marketwatch.com/story/china-says-gold-not-suitable-for-forex-...

Thu, 06/10/2010 - 10:13 | 405777 Hephasteus

Ya it's an orchestra of oh crap we are completely coupled to gold now. Which means we have to mine our asses off to keep paying our armies. They know they are screwed. The euro problem mopped up all the excess supply the next problem is going to be exponential panic squared.

Thu, 06/10/2010 - 10:15 | 405784 Kina

Means China is buying a shitload of gold. God they must be laughing at the banks helping the self destruction of the USA.

Thu, 06/10/2010 - 11:10 | 405953 Grand Supercycle

The EURO breakout I suggested yesterday, has made its move ...

http://stockmarket618.wordpress.com

http://www.zerohedge.com/forum/latest-market-outlook-1

Thu, 06/10/2010 - 13:23 | 406315 Spitzer

I made a sentiment call that BP put in a short term bottom yestarday and I didn't use any charts.

Thu, 06/10/2010 - 14:14 | 406466 RockyRacoon

Is this Scary Clown Dude ever wrong? Would he post it if he were?

I trust your seat-o-the-pants sentiment calls more!

Thu, 06/10/2010 - 14:16 | 406476 RockyRacoon

In the shorter term, the motives of gold holders who to refuse to sell (possibly even adding to their position) often depend on immediate concerns such as real interest rates, inflation expectations, the spread between short and long term interest rates as a proxy for the likely bias of monetary policy, and the exchange value of the US dollar.

Typically gold is a counter-cyclical asset that does best in real terms when liquidity evaporates. At times however, there can be pro-cyclical demand when equity, commodity, and gold prices are all rising strongly, and liquidity is more than abundant.

In the end, such price fluctuations in gold are a bit like Warren Buffet's famous remark about the stock market being a 'voting machine in the short term and a weighing machine in the long term'. In the short term, all sorts of considerations can be used to 'explain' movements in the gold price, but in the long term, gold acts as the aforementioned barometer of confidence in central bank issued fiat money.

http://globaleconomicanalysis.blogspot.com/2007/06/misconceptions-about-...

Sat, 06/26/2010 - 05:22 | 435057 mbtshoe

Morning Gold Fix: June 10, 2010

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