Right on Schedule, Gold Busts Back Through $1700
You know, it’s getting a little silly to be honest. I really wanted to believe that the Gold and commodity markets were not being manipulated down before the U.S. presidential election but after today’s action in the markets it is hard to not believe it. After grinding inch by inch higher for near 48 hours Gold finally exploded through $1700 on heavy volume during the COMEX session and promptly ran all the way to $1720 before being stymied and settling down for an afternoon nap near $1715.
Now, whether this explosion was simply a short bout of short-covering or the beginning of a reversal will depend entirely, I think, on who winds up winning the election tonight. If Obama wins the Fed will have a green light to finally begin QEternity. If Romney wins he will be smacked upside the head a few times and made to see the truth of how bad things truly are and then there will be QEternity.
For Gold to negate the short-term bearish posture, however, $1720 will not cut it. It will need a close this week over $1728 to give the bears real pause. It would also be a very rare week in which both the previous week’s low and high were violated; making it a very strong signal.
Silver continues to follow along with Gold, putting on $0.80 to close just shy of $32 per ounce at $31.98. Silver needs to close over $32.75 per ounce this week to negate its bearish posture and set up a run back towards $35.50.