Gold Continues to Hold $1600

By Tom Luongo in Gold and Oil News | February 20, 2013 1:20 | Tags: , ,

There’s little doubt that the current sentiment in Gold is as bearish as it has been since the worst days after the tech bubble burst while prices would continually attempt to break higher but were constantly rebuffed and people bailing of winning positions because of fear.  Today we have much the same thing.  Since the margin requirements were lowered and it looked like Gold was poised to break out of its very tight range below $1700 the price has been literally bombarded with paper as well as another major player talking the metal down as the propaganda campaign to talk the market’s to ever greater heights reaches its cresendo.

Today, after record volume on the Shanghai exchange during the first session after the Lunar New Year, Gold was relentlessly driven down to $1600 again, grinding the noses of longs into the power of the forces arrayed against them.  But, again, they took a stnad during the last hour of COMEX trading to push the price back to $1608 before meandering around through the Globex to settle at $1605 during the hour-long daily reset.

Expect Asian buying to intensify over the rest of the week as prices below $1550 or $1525 should pretty much dry up what is left of the physical market.  At that point the longs will stand for delivery and force the thieves on the COMEX to either bomb the price to $1200 or give up.  Imagine then response at $1200, or $800 or whatever fantasy level the bears dream of.  Simply put, at those price there will be no more COMEX and the physical price will be the market price.  Every day we inch closer to that reality or a short squeeze to rival the greatest in history.

About Tom Luongo
Tom is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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