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"As a technician, I feel that there are few analysts that offer value for me, but you do. Your work on Gold ratios has helped my analysis greatly." --Jordan Roy-Byrne, CMT (The Daily Gold) 4.9.10
Wednesday, April 20, 2011
Gold This Morning: On the Road to Kansas City --Jon
Trade was quite heavy overnight and after two days of pounding on the rampart of $1500, buyers broke through. Typically after achieving seminal benchmarks there is a 'what next?' moment not dissimilar to the day after reaching one's fiftieth birthday. Do not succumb ever to thinking that this time it's different and reinforce that Buffet precept that value is what we look to identify, confirm and participate in and price is only what you pay for it. Value? How many barrels of oil, pounds of copper, ounces of silver, and bushels of grain can you purchase with one ounce of gold...you do the math and observe the historical consistencies. The facts: GSR has eased to ~33.80...RSI is ~72.60 and should continue to play out the oversold retest...gold open interest was unchanged ~538,000 aggregate contracts as of Monday and continues to reinforce the under-owned metric given levels achieved last year. Today: Just looking at the green on my screen, it's hard to make a corrective case for all the obvious reasons. Personally I would take advantage of the continuing low option vols and buy time by beginning to roll from June, the current active front month, into Augs.