Technical analysts are more excited about the gold and silver charts than for any other asset. They interpret the recent sideways move at a peak as a classic sideways consolidation, and one of the most bullish you can find in chart land.
Shouldn't stocks be flying? Shouldn't gold be closing over $1,800 per ounce... and on its way to the moon? The Fed last week announced what could turn out to be the biggest program of money-printing ever undertaken by a central bank in history.
Precious metals, crude oil, equity markets, and certain currencies spent the first trading days of this week basically treading water and fast-forwarding to the last three days of sessions; days from which market participants are hoping to be able to extract some benefit.
The midweek precious metals trading session started with a bit of a recovery effort following Tuesday’s price rout. Market participants pushed the US dollar a tad lower on the index and lifted gold prices by about half a percent.
The new trading week got off to a relatively muted but also somewhat weak start in the precious metals’ complex. Spot gold climbed $3.70 to open at $1,586 per ounce and silver commenced the trading day at $27.24 the ounce with a 14-cent advance.
Spot gold fell to lows near $1,587 and then opened at $1,596, down $7 while silver touched $27.25 per ounce overnight but opened at $27.52. Once again, the US dollar added a few small steps to yesterday’s upward march and reached 82.85 on the index.
Gold prices added over 1% ahead of the ECB rate-setting meeting this morning as the post US jobs data-sparked Friday rally continued to unfold. The gold market’s net speculative length is at or very near multi-year lows.
While gold and silver have struggled in March, this appears to be momentary breather from their decade long winning streak. Inflation and budget concerns still persist and more debt-based solutions will only add to the problem.