Gold Holds Onto Friday’s Gains

By Tom Luongo in Gold and Oil News | November 26, 2012 23:15 | Tags: , ,

One always has to be suspicious of a big move on a low liquidity day, like during U.S. holidays.  So, while nothing much happened on Thanksgiving itself, the next day, Black Friday, which might as well be a holiday celebrating the zenith of Western consumerism, is also lightly traded.  So, when Gold and Silver both broke substantially higher right after the COMEX open on Friday there were a number of raised eyebrows and wary, disbelieving looks, including mine.  But, I’ve been watching these two markets long enough to know that low liquidity days like Friday are usually an excuse for a beat down not a melt up.

A weak Asian open last night did not become a rout, which rarely happens as the Asian markets are generally on the bid not the ask, and quickly turned around and ran into the same brick wall that stopped the short squeeze on Friday.  Gold then spend the rest of the New York sessions trading in a very tight range, getting tighter the entire time, closing near $1751 per ounce in late afternoon trading.  Silver exhibited similar capping action around $34.25 per ounce.  Gold will have to put in an hourly close over $1755 to break free from this ranging action.  Silver will have to do the same above $34.35 per ounce.  If that happens that will set up a run to the next level of resistance — $1775 in Gold and $35.50 in Silver.

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