Gold Completes the Turnaround, Closes over $1730
It was quite a week in the Gold pits.Â After Friday’s rout where $1680 was violated, throwing a very bearish signal last week, the bulls began the week in full retreat falling back to $1672.50 where they dug in and forced the speculative shorts to begin covering.Â This ground higher all through Monday and Tuesday until the U.S. Presidential election result removed the uncertainty surrounding the market’s inflation expectations and a new leg up began.
Who says the voters in Florida didn’t decide anything this year?Â If you were watching that night you’d know that as it became clear that Obama was going to win Florida the markets began moving in their current direction.Â Without Florida Romney had no shot at the White House, so once it looked like Florida would fall to the President, that was all the market needed.
For Gold, the important numbers were breached this week, last week’s previous low and high.Â By violating the low early and closing above the high Gold completed an intra-week reversal that should not need any further confirmation from next week’s close for most traders.Â The final price on the December contract was $1730.85 and while that was the price cap target set for today after President Obama’s presser about the upcoming fiscal cliff, the damage is done for those short Gold.
Silver, on the other hand, because of the general risk-offenvironment was not able to power through and close above last week’s high and settled at $32.59 per ounce, thought it did push through it briefly this morning.Â Regardless, it was a very bullish week for both metals and sets up a potential run to $1800 next week for Gold and $35.50 for Silver.
Expect these markets to run strong here, especially if equities continue to muddle around.