Hourly Action In Gold From Trader Dan
Posted: Mar 18 2010 By: Dan Norcini Post Edited: March 18, 2010 at 2:25 pm
Filed under: Trader Dan Norcini
Dear CIGAs,
There is not much to say about gold today other than what has been said repeatedly now for some time – it is stuck in a range trade with a bit of a higher bias to it as downside support thus far remains firm with the upside continuing to be capped by bullion bank selling at or near $1,130.
Ditto for the Dollar which is also stuck in a range but cannot seem to muster any enthusiasm for a downside breakout. Every single time it moves into the zone near and just below the 80 level, the volume dries up indicating that the trade simply does not want to take it lower. Currently there seems to be little appetite to push it down or on the flip side, to push the Euro up. Euro bulls are attempting to squeeze the shorts in there but they cannot recruit sufficient numbers to their cause to accomplish it. For now, the dollar is seeing buying below 80 and selling above 81.50.
After the shorts were run out of the Pound yesterday, sellers re-emerged today negating most of the upside blip.
The fact is that as concerns over Greece ebb and flow, the Forex markets are going to ebb and flow accordingly. And as the Forex markets ebb and flow, gold is going to ebb and flow. That is why we are seeing so many markets in range trades. There is too much uncertainty, lack of firm conviction with a corresponding lack of willingness to put money on the line, to allow one side to gain a sufficient tactical advantage over the other.
Speaking from the perspective of market price action, traders are grabbing at ultra short term profits wherever they may be found and then either getting out or reversing and flipping to the other side for another attempt at a quick but small gain.
Having said that however, gold is still maintaining its short term uptrend but it will need to push through $1,130 in a convincing fashion on strong volume to force the beginning of short covering among the weaker-handed shorts. Should it do so, that would set price up to run towards $1,145. One thing about this market, it is impressive that even with the Dollar higher, it is shrugging off selling pressure to a large extent by refusing to break down. This tells me that buying based on fears related to Europe is still keeping the gold price very firm in terms of those respective currency units and that will continue to put a floor of support under US Dollar priced gold. Euro gold is firmly above the €800 level and holding there.
With the Euro getting hit hard and the Dollar up sharply, commodities are getting sold down today as the algo trade resumes.
There are only a few commodity markets that are higher today as a result.
Weakness in the broad equity markets is bringing in a bit of selling to the mining shares as the HUI is down a bit around midday. It has to push above 431- 433 for a breakout of its range trade.
DAN'S CHART:
http://jsmineset.com/wp-content/uploads/2010/03/March1810Gold.pdf
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