Video-June-10-2013-Archives-Daily-Show
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Submitted by Konrad Urbanowicz on Tuesday, June 11, 2013 - 15:48.
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A New Week, A New Breath
Has the general aversion to government insinuated itself into a tangible mistrust of the Fed, even unto the trading community? Unless there is something in the water we don't know what the reasons might be. An actual debate among investors and traders is going on concerning the outcome of the FOMC meeting in 8 days.
Given the low level recuperation of the American economy, the stubborn unemployment rate and low even negative inflation, what is there to debate? (Of course today the U.S. was granted a better grade by Moody's regarding its credit worthiness, but that is due to a better outlook for deficit reduction.)
There is an alternative take on what is going on with gold traders, and it may center merely on who can roar and bellow and claw and throw tantrums more fiercely - bulls or bears.
So, the bears will roar out that QE3 is unsustainable and the Fed will surely see the error of its ways soon - meaning at the June meeting. Our favorite word applies to the bears: absurd. Theirs is a manipulative stance based on short positions, bets that were made last November when the American machine looked as if it were revving up for 3 or 4% growth and unlimited equities growth.
That, as we know, has not materialized. Rather, the big dog on the block is mired at less than 2.5% growth and producing low, low inflation. But the bears still flog their outmoded economic ideology. Inflating the economy - regardless of the method - is a bad, bad, bad thing. They natter about this oblivious to the fact that despite all the inflating measures taken since 2009, the U.S. and most of the rest of the world's economies are flat or at least sluggardly.
However, short positions are being unwound in the futures market day over day, even as we read and write, trying to make sense of the precious markets. It should be noted, though, that both long and short positions are being cut in gold futures/options. This is a signal that we are in for even more volatility.
Volatility offers the wise investor a lot of opportunity to make money, we must say. There is a shadow correlation between the spot market and futures market. The chief difference between the spot and futures markets is that in spot, you can sell your position at any time whereas in the futures market, as the contract ages, traders are painted further and further into a corner as the price moves (or doesn't move). One fine day, your contract ends and you begin the process over.
The dollar was marginally weaker today, nevertheless helping gold edge higher. It was a slow trading day, many investors sitting on the sideline, or passing time with silver, platinum and palladium bets.
Wishing you as always good trading,
Gary S. Wagner - Executive ProducerMarket Forecast: Today's small upside move in gold can be best characterized as price consolidation and short covering as we await the next FOMC meetings minutes. Gold closed nominally higher as we saw a continuation of the consolidation after last week's brutal sell off. This morning saw downside sentiment as Standard & Poor's upgraded the United States' credit rating from negative to stable. This created a short-lived upside bounce in U.S. dollar, but that was not to last the entire trading session.
This week we would look for consolidation in the market and sideways trading activity within a defined range. Today's video will look at that defined range that we are currently witnessing in gold with our intermediate outlook. Until we see a concrete direction develop within the market we will stay sidelined looking for fundamental data to propel the market outside of this type range.
Video archives:http://thegoldforecast.com/video/april-2013-archives-daily-shows http://thegoldforecast.com/video/may-2013-archives-daily-shows
Market Sentiment: Range bound sideways market no open position
From the week of 05.31. 2013 COT LINK See previous weeks in Historical Commitments of Traders Reports. |
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Gary S. Wagner - Executive Producer