DAN NORCINI'S COMMENTS ON JSMINESET.COM TODAY

In a manner somewhat reminiscent of last Friday’s stunning upmove, gold shrugged off early selling pressure tied to some stability in the US Dollar and weakness in crude oil, reversing course around midmorning and tacking $13 onto its trading session low. The buying pushed price all the way to yesterday’s peak and then some.
I am a bit hesitant to go too far out on a limb these days when it comes to market predictions but gold seems to be trading in a fashion that is suggestive of the presence of a large scale buyer who is willing to take on the concerted selling efforts of the bullion banks. The reason I mention this is on account of the dip buying that is taking place which is coming even without much support from the Dollar at times. Whether or not this will continue is anyone’s guess, but the price action is evidence enough for me that, for now, this buying is quite substantial.
Technically, the close above yesterday’s peak in gold brings a very good chance of bringing in further recruits to the bull cause which could easily take price on up to significant technical resistance centered in and around the $980 level. That will be a tough nut to crack for it is the last barrier of note before $1,000 comes into play. Support lies first at today’s low near $953 and then again at $947- $945. Today’s close above $965 is quite friendly.
What is encouraging for the bullish cause for gold is the price action in the miners. Even with the broader equity markets lower today, they are trading higher as I write this choosing rather to move in tandem with bullion rather the rest of the paper world. There is some minor resistance in place near the 380 level on the HUI with the index looking like it wants to challenge that. Besting that level puts 400 into play.
I should also note that the bonds are moving lower today in the face of lower equities. The pending home sales data was friendly and that took the wind out of the bond bulls after they were strongly higher earlier this morning. That data spurred on risk takers once again and that probably more than anything is what brought back buying into the crude oil pit which is attempting to sneak up on $72/barrel. I want to reiterate something I have said many times before – crude oil is trading more as a currency than a commodity. It has become an inflation hedge which is the main reason that a strict adherence to the demand/supply factors of that market can at times seem to be an exercise in futility for traders. It is really in another world and I see nothing that will change that anytime soon. When risk is in, crude is going to move higher and when risk is out, crude is going to move lower. It is pretty much that simple – for now!

for the rest of his comments and daily chart, go to jsmineset.com