DAN NORCINI'S COMMENTS ON JSMINESET.COM TODAY

The big news for today was the ISM manufacturing index which came in at 48.9 for the month of July, up from 44.8 in June. That had risk takers out in full force, the idea being that manufacturing is coming out of its prolonged slump. With that, the Dollar was promptly taken out to the woodshed once again with last week’s low made on Friday being obliterated as this last line of technical support above 76 was taken out. We now wait to see how low the Dollar will drift and how close it might fall before that next level comes into play.
The collapse lower in the Dollar was enough to once again spur a ferocious round of short covering in gold. However, once those stops were run, bullion bank price capping appeared near $965 and that was the end of the day’s move higher. Nothing new with that kind of predictable price action at the Comex.
It is encouraging to the bullish cause to see gold building on last Friday’s stunning move higher as it shows that there was more at work there than end of the month positioning. Commodities were higher across the board today with only a few exceptions. Most notable was the strong move higher in both crude oil and natural gas. Nat gas has been the laggard due to oversupply issues and to see it moving sharply higher had to make even the most avid deflationist begin to struggle with self doubt. Even bonds acted “normal” today dropping hard as equities rallied and commodities soared. I am still at a loss to figure out what the heck happened in that pit last Friday as it made no sense whatsoever to this observer.
The point in all this is that with copper continuing to defy gravity (a lot of funds are still trapped on the short side in the red metal pit), silver, platinum, palladium, crude, nat gas, corn, beans, etc, all moving higher, even bullion bank price capping efforts in gold are being strained. Nonetheless, it is evident that they are present by the rather paltry move higher in gold especially when one considers the very strong move higher in the CCI and the breakdown in the greenback. Upward progress in the yellow metal is still being fiercely contested by the same old players.
Technically, gold was able to break through the resistance band in place near the $955 level that had served to contain in over the last few sessions. A close above $965 now sets up a challenge of key resistance at $980. There is very little in the way of overhead chart resistance on the way to $1000 above that level. Support lies first near $955 and then near $942- $940.
Short term gold is reaching overbought levels on the RSI but that will only matter if the Dollar stops dropping.
The HUI managed to finally punch its way through the tough 360 level. If it can maintain a close above this level it has a very good chance of making a run to near 390 and then the very significant chart level of 400 – 402.
Let’s see how things close this afternoon.