Hourly Action In Gold From Trader Dan
Posted: Apr 07 2010 By: Dan Norcini Post Edited: April 7, 2010 at 1:51 pm
Filed under: Trader Dan Norcini
Dear Friends,
I am dealing with time constraints today so my comments will be brief.
The disconnect between the Dollar and the commodity world continues today with gold, silver, grains and the meats all ignoring the strength in the greenback. Again, what this means is that the commodity markets are beginning a transition from trading as “anti-dollar” plays to trading on the merits of their own respective demand and supply fundamentals. The link is not going to disappear, as I mentioned yesterday, but the tic by tic relation is fading.
For gold to be completely ignoring the move higher in the Dollar, it must now be trading as a currency on its own merits, a currency without any obligations attached to it. This new emphasis on its currency role will see it move higher and make all time highs across a wide variety of foreign currency terms. Already today it has put in another all time high when priced in terms of the Euro. Even in Yen terms it is very strong.
For technical purposes, what this means is that the bullion banks are going to have a much more difficult time attempting to force a lid on the metal in Dollar terms. Logically it is easy to grasp this – markets making all time highs are not candidates for bearish psychology. Bearish Elliot Wavers and their incessant claptrap about the yellow metal ignore at their own peril the price of the metal in foreign currencies. Their view is too narrowly focused to be of any good.
On the technical price charts, please see the charts I am sending up here at midday to look at the points. Both the HUI and the Comex Gold markets broke out to the upside today. That is very bullish as both the shares and the bullion are moving higher simultaneously. Rising open interest at the Comex indicates the return of Managed Money flows. Please refer to my recent post regarding the latest COT report to detail how significant this is. Managed Money speculative long side exposure is relatively modest in comparison to recent levels and this is occurring with gold less than $100 off of its all time high in nominal terms.
We also want to keep an eye on the crude oil price to watch that market for further strength. Rising energy prices will have a positive feedback into gold.
For you silver guys, its chart is bullish on the daily, weekly and monthly with a run to 19.40 – 19.50 looking likely. That level stands between it and another crack at 20.
DAN'S CHART:
http://jsmineset.com/wp-content/uploads/2010/04/April0710GoldHUI.pdf
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