The surprise print of negative GDP growth in the U.S. for the fourth quarter sent gold up 1% (love those ESF guys coming in to ensure it goes absolutely no higher than that) past $1680.   Not only did gold survive that and not give back that gain immediately it survived a brief assault as the FOMC policy statement was read at 2:15pm.  Bulls tried valiantly to push the price higher but were thwarted by an infinite wall of paper shorts who literally said, “No mas.”

One must never make the Chairman look bad.  Now last week’s take down makes more sense.  Allowing futures expiration to push the price to max pain for those holding $1650 puts and calls also created a lower base from which to absorb this horrible GDP number and follow-through statement of more of the same from the Fed.  The same thing happened for Silver and it reclaimed $32 today.

Tomorrow’s close is important as it is the monthly close and will determine the odds for a potential monthly reversal signal in February.  The $1696 level will be the first hurdle but December’s high of $1724 will be the number I’ll watch for first a daily and then weekly close over.   On the weekly chart Gold is range bound between $1626 and $1696.

All of the fundamentals are in place for a rally to begin any time now.  The confirmatory signals in the Euro and crude oil are also in place.  All that needs to happen now is for the bulls to over-run the capping action of the ESF and its hedge fund hangers on.