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XMFSinchiruna (26.57)

The Changing Tide



June 07, 2010 – Comments (4)

You can sense it in the gold coverage from the talking heads.

This guy Brimelow has spewed enough useless garbage about gold over the years to wallpaper his entire underground lair. But here he is quoting the likes of Trader Dan Norcini and Bill Murphy without so much as a single defamatory remark about the source.

Much like gold's resilient strength in the face of a sustained U.S. dollar rally, this is indicative of a turning point for gold. 

And Friday repaired a lot of technical damage. At veteran gold observer Jim Sinclair's JSMineset site, correspondent "Trader Dan" said in his daily analysis:

"Gold rebounded sharply ...through the 10-day and 20-day moving average and...above all the moving averages once again.

"Price action indicates the presence of strong buying support on dips with the usual suspects active on the rally...this price action is giving the physical market buyers time to become acclimated to the new and higher price level above $1200."

This conforms to the position taken at Bill Murphy's LeMetropoleCafe webzine, which among many other things watches Eastern gold prices as measure of physical market vitality. A piece posted on Friday was laconically entitled "India buys," and also noted that Vietnam, an interesting newly-significant gold market, appeared to have moved to the buy side as well. Stories about strong gold buying by European Central Bank-despising Germans have been appearing here and elsewhere for several days.

All of this gives resonance to the remarks of another Old Gold Hand, Harry Schultz, in his GCRU service on Wednesday morning:

"Bullion's capacity to shrug off the shackles of intervention at this crucial chart point ...invites a near term re-test of the May 2010 high -- with a possible overshoot towards the $1345.00 measured target ... and $1425.00 theoretical upside target. On the downside, a sustained break below bullion's March uptrend line (now $1178.50) would be necessary to destabilize what appears to be the energetic resumption of gold's primary uptrend."


4 Comments – Post Your Own

#1) On June 07, 2010 at 11:15 AM, outoffocus (23.06) wrote:

Hey Sinchi, did you see that huge pop in gold just now? Currently at $1233.  It was $1217 like 20 minutes ago.  I guess volatilty is hitting commodities as well as currencies and equities.

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#2) On June 09, 2010 at 6:35 PM, SnapDave (51.49) wrote:

Brimelow a contraindicator?  Tough to argue with all that German money though. 

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#3) On June 10, 2010 at 8:43 PM, FleaBagger (27.47) wrote:

My guess, at this point, is that gold won't start going down for good until those Cash4Gold types are completely out of customers willing to sell them gold, because every person in America with investable assets has started piling into gold.

In the meantime, I think gold still has plenty of upside as the current stagflation in all developed economies becomes more obvious and more painful. 

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#4) On June 11, 2010 at 1:26 PM, silverminer (29.92) wrote:


Spot on. Those commercials are frequently cited as signs of speculative froth ... they are the exact opposite ... they are confirmation of how willing people are to part with their physical gold and how misinformed they are about either the protection gold offers or the even the full value of the gold they possess.

Widespread ignorance ande indifference are not telltale signs of late-stage froth ... far from it. Excellent observation, flea.


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