Lucky Tuesday Has Gold on a YoYo
As Zerohedge likes to point out every week, Tuesday’s are the day of the week where the current equity rally makes its vig.Â Check out the chart of the Dow with and without the last 20 Tuesdays — all up, mind you — that they posted this afternoon and you can see exactly how this rally has been supported by the Fed’s open market operations.Â Today marked the first Tuesday in 21 weeks where the Dow did not rise but because of early weakness in the Euro yesterday’s gains again proved ephemeral.
I know this sounds like a broken record but until there is a technical break to the upside, the hedge funds will continue to short into strength in gold and the gold physical buyers are more than content to continue picking up 400 oz. bars at sale prices.
Because of this gold backed off of the $1415 level again today and sold off along with the Euro to a low near $1390 and traded with a slightly higher bias for the rest of the session ending the day just shy of $1400.Â Â Â It looks like this afternoon’s levels are the ones that the central planners want for us, $1400 gold, USDJPY at 100, the EURUSD at $1.305.Â Any deviation from that is not to be tolerated and must be restored.
How this status quo will be maintained as premiums continue to rise for physical gold inside China and JPMorgan’s customer account looks to be in deficit is beyond me but there it is.
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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