Monday, April 4, 2011
Gold This Morning: A P.T. Barnum Moment --Jon
Loafing turnover during the evening clearly disarmed sellers who must have actually believed that their Friday morning con scamed the market. Let's go the video...at 0830 Friday the NFP announcement, everyone's favorite 'lagging' indicator, triggered a $20 drop in June gold down to $1414 within about 90 minutes. Why? the media merrymakers quickly and gleefully claimed this confirmation of economic recovery meant higher interest rates which would drive stakes into the dear hearts (silver bullet, anyone?) of those gold buyers. I was so stunned by this illogical reaction (for 40 years gold actually has gone higher as interest rate rise with the exception of the Volcker stroke which was completely driven by draining liquidity and had no interest rate target), I actually took a quick trip down to the COMEX floor to check for heart beats. The facts: GSR made a giddy triple pike dive into the sea of liquidity at a new low of ~37.40...RSI is ~58.0 leaving plenty of headroom...Gold open interest gained 5,000 contracts last Thursday but remains indolent and apathetic in absolute terms...Last week's COT report was a push and complete reversal of the prior week with large specs getting back in while commercials sold and shorted. Today: We again achieve recent levels of former peaks, a critical juncture, and a close in the mid-$1440s should accelerate our recent missing ingredient-new money.