Riding The Technical Surf

The summer wind came blowin' in from across the sea...
      - Summer Wind

We mentioned last week that sometimes technical forces become so strong that in essence they become part of the fundamentals.

We saw just that today in gold trading and to a narrower extent in silver.

That is not to say that there was no hard news. The Fed released the minutes of the last FOMC meeting. The case here is that there were absolutely no surprises.

The Fed will indeed continue tapering QE3 bond buying programs until it ends in October. And, the minutes evidenced no breath of a chance that a rise in interest rates will come any time soon.

Hallelujah. We wait with baited breath to see when inflation will bite.

The Fed apparently thinks it will not happen for the next two years, a scenario we find almost impossible to buy into.

"The gold market got what it wanted," said Adam Sarhan at New York's Sarhan Capital. "There was some knee-jerk reaction that made the dollar go positive and gold give back some gains, but it was all too brief and too little."

If anything, the dollar gave gold and silver a serious assist today, making up about 1/3rd and 1/2, respectively, of the metals' gains.

We will also be keeping a very close eye on the equities markets, which will have an effect on our precious metals trading.

However, we are watching the resistance we have pointed out at 1330 to 1333 in gold. As news dries up and July and August progress, technical analysis will become more a more formidable tool and fundamentals will be found scattered on the summer wind.
 
As always, wishing you good trading,