Gold Stutters then Blasts towards $1700
Thanks to the Bundesbank and a request from one of the major political parties in The Netherlands gold was able to shrug off the take down on the COMEX open yesterday in conjunction with better than expected initial unemployment claims report.Â After selling down to $1666.65 in the futures market gold took about an hour to fight back and then took the shorts to the woodshed after the release of the Philly Fed report at 10am.
Gold is trading at $1690 currently, well above the level I believe is the real breakout level in this current short-term trading range.Â There have been two taps this morning at $1695 and a third will likely take that out as well.Â Again, today is Options expiration day so a number of things are possible.Â Honestly, yesterday feels like someone made a huge tactical mistake thinking they could take gold down before OE and make a killing only to get killed in the process.
GLD is trading over its option pain number and traditionally when that happens one month the next month is a bloodbath.Â But, then again, these are not normal times.Â And if theprisoner’s dilemma of the modern financial house of cards is beginning to teeter then anything is possible in this next phase of the gold drama.
Watch the convergence of the Euro and Gold as opposed to them trading opposite each other.Â if that trend is re-asserting itself and the division between the Fed and the ECB is widening than the rest of Q1 could be very interesting indeed.
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