Wednesday, August 5, 2009
DAN NORCINI'S COMMENTS ON JSMINESET.COM TODAY
Once again, as we have seen in the recent market action of the past few trading sessions, gold found strong buying emerge on a price retracement or dip lower. The buyer(s) that have been making their presence felt are apparently still active and challenging the bullion banks.
One of the things I have noticed is that the open interest levels are rising indicating that this buying is not short covering but rather new longs being established. Even at that, the overall open interest total is still not at the 400,000 level. You might recall that the peak reached in this category was nearly 594,000 back in January 2008. Front month gold topped out at $936 that month followed by a run above the $1,000 level in March that same year when it reached $1,033.39 before dropping all the way down below $700. The present state of the market therefore is quite remarkable given the current price level near $970 and open interest some 200,000 contracts shy of the record.
One of the reason for the peak in open interest back early last year was the spreader category grew quite large. Currently they are rather small by comparison. Still, even after allowing for the spreaders, open interest readings are at levels that can support a much stronger move higher in gold should momentum funds attract even more followers to their cause.
Technically, resistance lies first at yesterday’s high near $973. A pit session close above this level targets $980 which is the last substantial barrier before a run into the $990’s and possibly $1,000.
Initial support is near today’s session low followed by a bit better support centered around $955 – $953. Below that is $942 – $940.
I am in awe of what copper is doing and still do not quite know what to make of that market except it is obviously running higher on the “improving global economy” theme. It simply will not break lower and there are still a large number of funds trapped on the short side in this market that have the capability to propel it even higher if the squeeze continues.
Crude oil is mirroring the action in the Dollar inversely. Rising crude oil along with natural gas pretty much is the death knell to the deflationists. The only thing saving their bacon right now is that the bonds have not yet broken down of their larger trading range. We will have to see what happens to them if they should fall back down to the 115 level.
The Dollar still looks like it is headed down to near 76.
One of the things I have noticed is that the open interest levels are rising indicating that this buying is not short covering but rather new longs being established. Even at that, the overall open interest total is still not at the 400,000 level. You might recall that the peak reached in this category was nearly 594,000 back in January 2008. Front month gold topped out at $936 that month followed by a run above the $1,000 level in March that same year when it reached $1,033.39 before dropping all the way down below $700. The present state of the market therefore is quite remarkable given the current price level near $970 and open interest some 200,000 contracts shy of the record.
One of the reason for the peak in open interest back early last year was the spreader category grew quite large. Currently they are rather small by comparison. Still, even after allowing for the spreaders, open interest readings are at levels that can support a much stronger move higher in gold should momentum funds attract even more followers to their cause.
Technically, resistance lies first at yesterday’s high near $973. A pit session close above this level targets $980 which is the last substantial barrier before a run into the $990’s and possibly $1,000.
Initial support is near today’s session low followed by a bit better support centered around $955 – $953. Below that is $942 – $940.
I am in awe of what copper is doing and still do not quite know what to make of that market except it is obviously running higher on the “improving global economy” theme. It simply will not break lower and there are still a large number of funds trapped on the short side in this market that have the capability to propel it even higher if the squeeze continues.
Crude oil is mirroring the action in the Dollar inversely. Rising crude oil along with natural gas pretty much is the death knell to the deflationists. The only thing saving their bacon right now is that the bonds have not yet broken down of their larger trading range. We will have to see what happens to them if they should fall back down to the 115 level.
The Dollar still looks like it is headed down to near 76.
GOLD TRADING SLOWS IN AFTERNOON TRADING, BUT COULD GET VOLATILE AS DOLLAR MAKES A LEDGE TO FALL FROM
GOLD COULD SPIKE HIGHER IN THE NEXT
HOUR
GOLD STARTS ITS RISE INTO THE CRIMEX CLOSE AFTER BEING BASHED BY THE SHORTS TO PAINT THE CHARTS AT THE END OF THE CRIMEX SESSION
Bonds falling fast
Dow rising
Euro rising
Yen falling
Oil rising
Dollar falling
All positive for a rise in gold
GOLD MAY SPIKE HIGHER AFTER THE CRIMEX CLOSE
A NORMAL PULL BACK AFTER HITTING THE 75% RETRACE POINT AT 96740
Gold should rally to the next retrace point at
96980 or even higher and take out the previous
top at 97270. Whether that can be accomplished
in today's day session is questionable, but NOT
impossible.
GOLD RETESTS THE LOW TWO TIMES, IT HOLDS, NOW A RALLY HIGHER
Dollar has moved higher, but nothing dramatic
Dow off 112 and dragging gold down
Oil and Euro down too, but not for long
THE BULLION BANKS AND CRIMEX MANIPULATORS ARE POUNDING GOLD WITH ALL THEY'VE GOT, BUT WILL LOSE THE GAME
Bonds, Euro, Dow down
Yen up
Dollar steady
This is an excellent buy in point
GOLD GETS PUSHED DOWN TO A LOWER 75% RETRACE POINT, BUT IS RALLYING WELL NOW
A retest of the low, then higher
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