Tuesday, November 30, 2010
Gold This Morning: New All Time Highs in EUR, GBP & JPY --Jon
Overnight trade has been active and higher with hardly any precision as reachieving each prior peaklet needs classic hand-to hand combat; the sellers are not making it easy, no sir. As the headline indicated the new 'strong dollar policy' has an immediate unintended consequence and my new European delivery Porsche will only cost 94 ounces of gold today instead of 100 ounces two weeks ago. Meanwhile the underlying facts remain benign...The GSR remains steady ~50.60. Open interest continues to contract and is back under 600,000 for the first time in a couple of months; yesterday I suggested selling by sissies and short covering but the boyz in the pit offered a view that as the DEC-FEB role is on a number of serious players are minimally reducing exposure for the holiday season...a little too glib for me and I remind you to never short a quiet market. RSI(14) is elevated to ~54 which is essentially directionless. Yesterday the FDIC released a stunning number (to me anyway) that US commercial banks added almost $90 billion in core deposits in Q3 bringing the total to over $6 Trillion (the most in 18 years). This, folks is all our pocket and discretionary money at essentially a negative yield and the banks having closed their prop desks and having no one to loan to are merrily buying USTs and making a nice spread. Wait until after the holidays when they start offering toasters to get you to look under your mattress. Me: just another reason to accumulate gold.