Tuesday, January 4, 2011
Gold This Morning: The Gang's All Here --Jon
Active overnight trade as most of the world shows up. There was one suspicious downdraft around 0300 that triggered stops and woke up some buying. Keep in mind that open interest remains muted ~585,000 relative to highs ~650,000 2 months ago. Yesterday during live trade there was a fair amount of bullish option strategies set up accounting for some derivative FEB futures selling in the low $1420s as these positions were hedged or funded. The facts continue to support firmer prices and the GSR is virtually unchanged at ~45.85 while RSI(14) has eased back to ~56 leaving plenty of room for upside momentum. Option vol which popped a bit yesterday morning as positions were established has again slipped back and I suppose we should begin to observe the relevance of an index that lately continues to demonstrate disinterest. Disinterest? Does anyone out there question paying somewhere (who knows?) around 40+ times revenues for a club I haven't even joined or is it just that Goldman Sachs is wallowing in liquidity. My view...the future value of Facebook in ounces of gold is a better hedge.