It was the Day After Christmas and All Through the Exchange

It was the day after Christmas and all through the exchange, gold traders were not silent as they looked at their gains.

As traders and investors returned to their desks after the extended three-day weekend, they witnessed both gold and silver continuing the dynamic rally which began on December 12th when gold bounced off lows of $1238.

Nine trading days later, gold prices would ascend and as of 3:30 PM Eastern standard time is trading at 1288, a net gain of $9.20 on the day and a net gain of $50 from the lows.

The last leg of this rally seems to be guided by technical indicators as last week gold pricing moved above both the 200-day moving average and the 50-day moving average. This gave market technicians confirmation that a key reversal had just occurred, and that gold and silver pricing were both headed higher.

Although there is very little fundamental data which is fueling the current rally, there is a concern, once again, about North Korea creating a favorable safe haven sentiment.

As reported today by Reuters, “The United States on Tuesday announced sanctions on two North Korean officials for their roles in developing the country's ballistic missiles. Tensions have been rising over the programs, which the Asian nation is pursuing in defiance of years of U.N. Security Council resolutions.”

Based upon the most recent C.O.T. (Commitment of Traders) report, managed money has maintained a strong tendency to be long gold by about 3 to 1. Currently, managed money is long 116,642 contracts, with only 35,397 short positions.

Technical studies have indicated that there is support for gold pricing at $1264, the 61.8% retracement, and $1270.30 which is where the 200-day moving average is currently fixed at. These studies also indicate no real major resistance until $1300 per ounce.

The Bitcoin Bounce

The cryptocurrencies are once again on the rise. After an incredibly volatile selloff last week, digital currencies have once again moved into rally mode. Bitcoin futures are currently trading up over 12%, with the CME’s bitcoin contract up 12.7%. This marks a net gain of $1795 on the day, putting a single Bitcoin at $15,930. CBOE’s that point futures are currently up to $1880, with a single Bitcoin trading for $15,840. The $64,000 question is whether last week’s extreme selloff was the bubble bursting, and today’s move indicating potential support at the lows achieved last week.

Wishing you as always, good trading,