Read a good article about the coming inflation and downfall of the dollar. It's a paid subscription, so I'll re-write the highlights here:
-The failure of the dollar could happen as soon as this fall. -In late summer 2008, fed owned $942B in assets. Now it owns $2.3T, which came from brand new money out of thin air. $12+k per US household. -Bernake's plan was to create the money and keep it locked up in the banks (by paying interest on the money lent the bank deposited with the fed) until they could suck it back and destroy it before it hit the economy to keep inflation in check. A good plan, except Congress is spoiling it. Congress is going to make that money permanent through out-of-control spending and bailouts... such as having the fed purchase $963B in MBS, and Congress is talking about more stimulus plans. -$2.5T in treasuries are coming due this year, plus a $1.6T deficit, and this assumes rates don't increase. -Investors no longer willing to settle for paltry returns, moving away from treasuries. -Once the Fed stops the QE program (used to buy treasuries) next month, rates are likely to leap up. -Last year the US paid $381B in interest. What if rates double or more? -congress could force the fed to maintain the QE program, which would be disastrous as they would have to raise rates. But if QE keeps going, the market will devalue the dollar. -China lent 47% of all money borrowed by the US in 2006. This number is only 4.6% for 2009. -China has been warning us that they are ready to pull the plug. -According to a Morgan Stanley report, there will be a short fall of debt demand by $400-700B. This would mean a failed treasury auction and could trigger a stamped away from the dollar. Or the US could simply monetize it... -The author expects that the fed will have to continue its QE and MBS programs. -Congress may force banks to buy treasuries, esp the ones that were bailed out.
As far as the IMF gold sale, and gold in general -Many countries with money have little or no gold and may be buyers: Honk Kong, Singapore, Brazil, India.
3 days in a row of gold sell-offs at the end of the day. Sure makes me wonder what people have been using the discount window for!
Salute the automobile: The greatest anti-pollution device in human history! (Just think of city streets clogged with a hundred thousand horses each generating 15 lbs of manure every day...)
<< <i>RR, I see what you mean... The USD wedge isn't converging very quickly... Still, 3 touches at the top resistance are all that are needed.
Cohodk, I think the issue is that I have been unclear about timeframes with my comments. I do discuss short, medium, and long term time frames and I don't think I'm clear about which one I'm talking about. For ST moves, yes I am going to flop from bear to bullish calls quite often, as is the nature of short term moves and consolidations. Long term, I think I've been pretty consistent. I thought the "big move" would last until Feb or Mar but when it became obvious in December that the consolidation was going to happen sooner I had to adjust the call. On this LT timeframe though, I'm still completely bullish. Now I have enough information to make a pretty firm call that Mar 30 (give or take a few days) is going to be the launch of the resumption of the up trend.
Short and medium term, I have to be open to the possibility of a final test to support at 1025. Such a test will be brief and will be over by Mar 30. Barring this new test, I expect gold to establish a new trading range between 1120 and 1190.
My calls come from a mix of TA and input from reading TONS of news and articles. I know it's dangerous to mix TA and news because one shouldn't affect the other, but I think it helps form an understanding and get a better feel for the market.
How is the short copper trade working out? Are you still holding on, adding, or have you abandoned your position? >>
Thanks for the clarification. It can be very dangerous to mix newsletter opinion and TA.
Still holding copper short. Got in 3 days early, but copper is now at original short level. Almost doubled up when price reached bottom of broken uptrend, but had too many other coals in the fire---oil is a much better play . Copper is not going higher.
Silver tried to get over the 200dma, broken uptrend and broken price support. It is failing today. Momo is still negative. Giving it a few more days to try to resume the uptrend, otherwise that guy better warm up his truck.
After gold's gap(spike) higher last week it has been largely sideways (boring).
The gold miners are no longer boring. They've been headed down since peaking around last Thursday. GDXJ member RBY peaked two days early and gave an advance notice of what was to come. A number are showing aroon10 crosses and negative 12d macd's. A couple of the large African miners are now at lower lows since early December. Not good action overall. The talk down there always seems to come back to a shortage of electricity, strikes, nationalization, etc. Not a great climate to breed confidence in gold mining.
The only "bullish" item so far in this down turn is that the miner volume has been steadily dropping rather than cascading higher. We'll see if that trend continues today or the dam breaks. GDXJ volume is already higher than yesterday's at 1:30 EST while GDX has a ways to go still. This miner down leg is starting to look like a final C wave down from the 1162 high. With options expiring today as well as a bond auction week this action wasn't unexpected.
Update: Volumes did end up higher today on both GDX and GDXJ. Expect even higher selling volume this week. In looking at SPY, BKX, CDNX, Gold/HUI ratio, etc. another crushing 3rd down leg appears in progress. The broad CDNX chart recently completed 5 legs (A) down followed by a counter move (B) up. It peaked in early Jan. and did have that initial down leg as gold did in December. Almost always that first 5 legs down move is followed by another 5 leg down move (5-3-5). It seems to have started. And other indicies and liquidity measures seem to support it. While it may have looked like the HUI/GDX completed its ABC pattern 2 weeks ago that was probably only the first 3 legs down or the C leg was only partially completed.
Gold will have a hard time moving against HUI, CDNX, FXI, SPY, BKX, CCI, and FXA/FXC/FXE headwinds. Bond week ends Thursday for a final look.
The movement in PMs has been boring, and will probably be for another month. Although I think we're ready for another mini-uptrend in the short term. Thursday could see some significant movement. I say that for a few reasons... I think the SP500 and stocks in general are ready for a nice jump up, and I think this will help gold a little. The end of the treasury auction won't hurt. Also, the hourly and daily MACD values are very low, and could/should be ready to reverse direction. Both gold and SP500 patterns are loaded with energy for a short term move. The McLellan report timing indicators are also calling for a bottom Wed-Fri. I wouldn't be surprised to see gold hit support at 1088 and bounce from there tonight.
One other interesting tidbit... Margin/Reserve requirements for gold futures was just increased significantly. This is done when volatility increases and when the exchanges want to decrease the amount of speculation and participation in the markets. Volatility in gold lately has been pretty low though, if you look at GVZ.
The treasury auction has been disappointing again. The 2 year note auction seem to have went OK, but the 5 year notes were not too strong and the 7 year auction is tomorrow. Treasury Auction This is the second auction in a row where results have disappointed. Is this the start of a trend? A few more like this and I this could easily be the fuel to start the launch of the next huge rally on Mar 30.
This article has made a LOT of good points about why gold is headed higher in the longer term. A few of the more important points are:
# Gold has been rising despite a rather strong rally in the USD, currently standing around 80.53. This is very indicative of the increasing attractiveness of gold by central banks, institutions and retail investors.
# The IMF is notorious for selling gold at the bottom of a bull market, a trend that remains intact.
# The announcement by the IMF to resume their approved 400 metric tons of gold onto the open market didn't impact the price of gold.
# The smart money, namely George Soros, first claimed gold was the “ultimate asset bubble,” only to see him drastically increase his exposure to the yellow metal soon thereafter.
# China and Japan have both been selling U.S debt (though not a sizeable portion), but this is another trend likely to continue. Japan is now the largest holder of US Treasuries despite the fact they have been net sellers along with our number two holder China. It is not the selling itself that should worry holders of US dollar but rather the implications of such actions. It is highly doubtful that China or Japan will buy any sizeable portion of our Treasuries this time around based on their recent selling, and of course their obvious concern over the USD.
So to re-cap, -Short term, I expect gold to start moving back up in the next day or two... next stop 1128-1130 and most likely breaking through this resistance level on this 4th attempt.... probably to establish a new trading range 1030-1050/1060. -Long term, still calling for the launch of the next big trend on Mar 30 to take gold north of $1500 by end of year.
Fundamentals aside, there are too many negatives in the gold miner charts right now for my comfort. We've turned over sharply and crossed on the stochastics, Aroon10 crosses in both juniors and seniors, new multi-month lows in key African miners, negative divergences in macd which is also well-rounded over like the stochastics, downtrend and neg divergences in RSI's, 10 day Bollinger Bands and rate of change still generally trending in same direction since this correction started last week. More room to run on the Williams % R or CCI before hitting the oversold lines. The miners love to run to the bottom of the CCI/W%R once they get near the half way point. Cycles seem well spaced on the miners probably indicating still time left before bottoming out on this multi-week move. The action today left a plethora of hang-men doji candles all over the charts. A number of the miners such as Newmont showing increasing selling volume the past 3 days. The GLD chart looks somewhat better but also showed increasing selling volumes this week.
Until the miners look sharper I can't see gold making a decent up move. The odds would favor gold following the GDX/GDXJ charts for now.
<< <i> # The smart money, namely George Soros, first claimed gold was the “ultimate asset bubble,” only to see him drastically increase his exposure to the yellow metal soon thereafter. >>
Just quibbling a little bit here, but Soros was actually buying GLD last quarter and then said it was a bubble last month. We just didn't know he was buying until the institutional investors reported their year-end holdings last week. You have to take what Soros says with a grain of salt, he is not as open about what he is doing as someone like Warren Buffet. He might have sold all that gold the first week of January and we won't know for months. Einhorn and Paulson have also said they are buying gold and/or gold miners.
RR, I see what you're saying but for some reason I think it's different this time, at least as far as POG goes... of course the mining stocks could be a slightly different story.
Cohodk, Mar 30 is shaping up to have a lot of significance. First, it marks 4 months from the beginning of the consolidation. 4 months is a fairly standard consolidation period. Also as parabolic moves develop, consolidation periods are shorter and shorter. I believe the previous consolidation period was 8 months, so a 4 month consolidation makes sense. Second, the McLellan report USD and gold timing models are confirming this date as an important top/bottom.
The resumption of the parabolic move could start anywhere from 1050 to 1190 though (IMO), so the picture between here and Mar 30 is not yet clear.
The miner's swift move down at open this morning followed by a strong recovery signaled the end of the 3rd leg of their recent down move. A little bounce back and then the last leg down to follow at the end of this week or early next week. I was wondering why the miners recovered so strongly while the DOW got whacked for -150 pts this morning. They had just completed their 5th minor leg down in this larger 3rd wave. Initially it looked like the miners were decoupling from the stock market but a better explanation is that their time was up. Liquidity still seems to be scarce. Cando, Aussie, and Euro still getting hit as well as money fleeing to Yen, dollars, and TBonds. The Euro/Yen and Nzd/Yen ratios are still falling as well.
Still looks like a final trip to at least the $1070-$1080 is in store for gold. Though I think gold will be doing much better come late March. I can't see this current weakness going on too much longer. March 30th could turn out to be either an intermediate top or low on an overall rising leg. The dollar will eventually need to retrace a large percentage of its move from 74 to 81-83? That would give the metals a 6-8 week window in the March/April time-frame.
Newmont came out with a great earnings report this morning and has shot right back up. Odd to see the miners and gold moving up counter to the stock market, copper, and oil moving down. Though eventually at some point that should become commonplace. The morning action in the miners does look pretty strong for the first time in weeks, almost begging for one to jump on now or miss the next move up. There are rumors out there today about China buying up the rest of the IMF gold. That alone could provide some of the bullishness being seen. End of month trading Friday with a FULL moon on Saturday. All aligned for a change by Monday.
This analyst is saying much the same thing I see though in different terms using on-balance volume and price supports.
We may get a bullish engulfing candle in $XAU today. That would be a good sign for the miners and something very much needed to keep the chart from looking like the Grand Canyon.
<< <i>We may get a bullish engulfing candle in $XAU today. That would be a good sign for the miners and something very much needed to keep the chart from looking like the Grand Canyon. >>
I could easily see that happening with a poor 7 year treasury auction result... and no reason to expect otherwise with the 3 and 5 year auctions being so lousy.
I'm not in a position to play it, but shorting the USD for a short term trade might be a good play right here... at 9:42 MST it's 81.09... we'll see what it is tonight.
<< <i>We may get a bullish engulfing candle in $XAU today. That would be a good sign for the miners and something very much needed to keep the chart from looking like the Grand Canyon. >>
I could easily see that happening with a poor 7 year treasury auction result... and no reason to expect otherwise with the 3 and 5 year auctions being so lousy.
I'm not in a position to play it, but shorting the USD for a short term trade might be a good play right here... at 9:42 MST it's 81.09... we'll see what it is tonight. >>
The day isnt over yet so we'll have to wait and see what the close is.
I am looking more at buying the Euro as there is a double etf, but I can also see the potential for a "super spike" higher in the dollar, lower Euro, so I sit on the sidelines also. Im content with my oil and copper shorts right now.
Inverse moves today from PM's and the miners in reaction to the poor jobless claims number which initially smacked down stocks and commodities in general. It could be that the China buying IMF gold "news" coming from Pravda set this PM strength in motion. Later "news" came out that India was willing/able to buy it as well...lol. I guess we'll have to wait to see which way this shakes out. Neither India or China wants to telegraph a purchase that will cost them more money. So I'd lean towards the BS department on this so-called news. Gold was due for another short leg back up. So for the time being that's all I can assign to today's PM and miner strength. But this counter move today showed great resilience in the metals, enough to bring the bullish view right back into play. The charts don't seem to help one bit at this point.
<< <i>The charts don't seem to help one bit at this point. >>
That's why I've started to take in the totality of everything I see, read, and observe for a more complete picture. Seems like my call for today was right on, but that could have just been luck. Had I shorted the dollar during my previous post, I would have made $330 per USD futures contract (DX), or about 20%.
The China/India IMF gold thing is questionable. I've read plenty of articles about why they won't be buying it, but still I think they might end up with it anyway. But how does it work? Could they call at this very moment and buy it at the current spot price, currently $1107? I think they could... they don't have to buy it on the open market. So there wouldn't be any pricing risk if the deal can be locked down before being announced. Of course, any deal would probably include provisions for testing all of the gold for tungsten...
Heard/saw in many sources that the international physical gold market it tight, and that physical buying is increasing noticeably any time gold dips down to 1090-1100. I am convinced that there is a lot of major pent-up demand for gold by people waiting for lower prices... and come Mar 30 or so, there will be a realization that the dip isn't coming and there will be a scramble to place and fill orders.
And of course, we can't forget the historical tendency of the IMF sales to occur at gold price bottoms...
The dollar pulling back was/is just a matter of time. It's been bouncing up against the upper bands and has run up for almost 3 months now. But I wouldn't take that bet either way.
The gold charts have me confused only because they are smack in the middle of no-man's land. Gold could be starting the 3rd leg up from last week or be in the middle of a C leg down from several weeks back at $1162. CCI is smack dab in the middle area (around 0). Either view fits fine with the current charts from what I can see. So much easier to figure out where things are when closer to a top or a bottom. For now one should assume the downtrend is still intact from December until something breaks to a new interim high or misc divergences turn positive.
Comments
Read a good article about the coming inflation and downfall of the dollar. It's a paid subscription, so I'll re-write the highlights here:
-The failure of the dollar could happen as soon as this fall.
-In late summer 2008, fed owned $942B in assets. Now it owns $2.3T, which came from brand new money out of thin air. $12+k per US household.
-Bernake's plan was to create the money and keep it locked up in the banks (by paying interest on the money lent the bank deposited with the fed) until they could suck it back and destroy it before it hit the economy to keep inflation in check. A good plan, except Congress is spoiling it. Congress is going to make that money permanent through out-of-control spending and bailouts... such as having the fed purchase $963B in MBS, and Congress is talking about more stimulus plans.
-$2.5T in treasuries are coming due this year, plus a $1.6T deficit, and this assumes rates don't increase.
-Investors no longer willing to settle for paltry returns, moving away from treasuries.
-Once the Fed stops the QE program (used to buy treasuries) next month, rates are likely to leap up.
-Last year the US paid $381B in interest. What if rates double or more?
-congress could force the fed to maintain the QE program, which would be disastrous as they would have to raise rates. But if QE keeps going, the market will devalue the dollar.
-China lent 47% of all money borrowed by the US in 2006. This number is only 4.6% for 2009.
-China has been warning us that they are ready to pull the plug.
-According to a Morgan Stanley report, there will be a short fall of debt demand by $400-700B. This would mean a failed treasury auction and could trigger a stamped away from the dollar. Or the US could simply monetize it...
-The author expects that the fed will have to continue its QE and MBS programs.
-Congress may force banks to buy treasuries, esp the ones that were bailed out.
As far as the IMF gold sale, and gold in general
-Many countries with money have little or no gold and may be buyers: Honk Kong, Singapore, Brazil, India.
(Just think of city streets clogged with a hundred thousand horses each generating 15 lbs of manure every day...)
<< <i>RR, I see what you mean... The USD wedge isn't converging very quickly... Still, 3 touches at the top resistance are all that are needed.
Cohodk, I think the issue is that I have been unclear about timeframes with my comments. I do discuss short, medium, and long term time frames and I don't think I'm clear about which one I'm talking about. For ST moves, yes I am going to flop from bear to bullish calls quite often, as is the nature of short term moves and consolidations. Long term, I think I've been pretty consistent. I thought the "big move" would last until Feb or Mar but when it became obvious in December that the consolidation was going to happen sooner I had to adjust the call. On this LT timeframe though, I'm still completely bullish. Now I have enough information to make a pretty firm call that Mar 30 (give or take a few days) is going to be the launch of the resumption of the up trend.
Short and medium term, I have to be open to the possibility of a final test to support at 1025. Such a test will be brief and will be over by Mar 30. Barring this new test, I expect gold to establish a new trading range between 1120 and 1190.
My calls come from a mix of TA and input from reading TONS of news and articles. I know it's dangerous to mix TA and news because one shouldn't affect the other, but I think it helps form an understanding and get a better feel for the market.
How is the short copper trade working out? Are you still holding on, adding, or have you abandoned your position? >>
Thanks for the clarification. It can be very dangerous to mix newsletter opinion and TA.
Still holding copper short. Got in 3 days early, but copper is now at original short level. Almost doubled up when price reached bottom of broken uptrend, but had too many other coals in the fire---oil is a much better play
Silver tried to get over the 200dma, broken uptrend and broken price support. It is failing today. Momo is still negative. Giving it a few more days to try to resume the uptrend, otherwise that guy better warm up his truck.
After gold's gap(spike) higher last week it has been largely sideways (boring).
Knowledge is the enemy of fear
The only "bullish" item so far in this down turn is that the miner volume has been steadily dropping rather than cascading higher. We'll see if that trend continues today or the dam breaks. GDXJ volume is already higher than yesterday's at 1:30 EST while GDX has a ways to go still. This miner down leg is starting to look like a final C wave down from the 1162 high. With options expiring today as well as a bond auction week this action wasn't unexpected.
Update: Volumes did end up higher today on both GDX and GDXJ. Expect even higher selling volume this week. In looking at SPY, BKX, CDNX, Gold/HUI ratio, etc. another crushing 3rd down leg appears in progress. The broad CDNX chart recently completed 5 legs (A) down followed by a counter move (B) up. It peaked in early Jan. and did have that initial down leg as gold did in December. Almost always that first 5 legs down move is followed by another 5 leg down move (5-3-5). It seems to have started. And other indicies and liquidity measures seem to support it. While it may have looked like the HUI/GDX completed its ABC pattern 2 weeks ago that was probably only the first 3 legs down or the C leg was only partially completed.
Gold will have a hard time moving against HUI, CDNX, FXI, SPY, BKX, CCI, and FXA/FXC/FXE headwinds. Bond week ends Thursday for a final look.
roadrunner
GDX has the potential to turn horribly disasterous.
Knowledge is the enemy of fear
One other interesting tidbit...
Margin/Reserve requirements for gold futures was just increased significantly. This is done when volatility increases and when the exchanges want to decrease the amount of speculation and participation in the markets. Volatility in gold lately has been pretty low though, if you look at GVZ.
The treasury auction has been disappointing again. The 2 year note auction seem to have went OK, but the 5 year notes were not too strong and the 7 year auction is tomorrow.
Treasury Auction
This is the second auction in a row where results have disappointed. Is this the start of a trend? A few more like this and I this could easily be the fuel to start the launch of the next huge rally on Mar 30.
This article has made a LOT of good points about why gold is headed higher in the longer term. A few of the more important points are:
# Gold has been rising despite a rather strong rally in the USD, currently standing around 80.53. This is very indicative of the increasing attractiveness of gold by central banks, institutions and retail investors.
# The IMF is notorious for selling gold at the bottom of a bull market, a trend that remains intact.
# The announcement by the IMF to resume their approved 400 metric tons of gold onto the open market didn't impact the price of gold.
# The smart money, namely George Soros, first claimed gold was the “ultimate asset bubble,” only to see him drastically increase his exposure to the yellow metal soon thereafter.
# China and Japan have both been selling U.S debt (though not a sizeable portion), but this is another trend likely to continue. Japan is now the largest holder of US Treasuries despite the fact they have been net sellers along with our number two holder China. It is not the selling itself that should worry holders of US dollar but rather the implications of such actions. It is highly doubtful that China or Japan will buy any sizeable portion of our Treasuries this time around based on their recent selling, and of course their obvious concern over the USD.
So to re-cap,
-Short term, I expect gold to start moving back up in the next day or two... next stop 1128-1130 and most likely breaking through this resistance level on this 4th attempt.... probably to establish a new trading range 1030-1050/1060.
-Long term, still calling for the launch of the next big trend on Mar 30 to take gold north of $1500 by end of year.
Until the miners look sharper I can't see gold making a decent up move. The odds would favor gold following the GDX/GDXJ charts for now.
roadrunner
<< <i>
# The smart money, namely George Soros, first claimed gold was the “ultimate asset bubble,” only to see him drastically increase his exposure to the yellow metal soon thereafter.
>>
Just quibbling a little bit here, but Soros was actually buying GLD last quarter and then said it was a bubble last month. We just didn't know he was buying until the institutional investors reported their year-end holdings last week. You have to take what Soros says with a grain of salt, he is not as open about what he is doing as someone like Warren Buffet. He might have sold all that gold the first week of January and we won't know for months. Einhorn and Paulson have also said they are buying gold and/or gold miners.
Why are you so obsessed with March 30?
Knowledge is the enemy of fear
Cohodk, Mar 30 is shaping up to have a lot of significance. First, it marks 4 months from the beginning of the consolidation. 4 months is a fairly standard consolidation period. Also as parabolic moves develop, consolidation periods are shorter and shorter. I believe the previous consolidation period was 8 months, so a 4 month consolidation makes sense. Second, the McLellan report USD and gold timing models are confirming this date as an important top/bottom.
The resumption of the parabolic move could start anywhere from 1050 to 1190 though (IMO), so the picture between here and Mar 30 is not yet clear.
Still looks like a final trip to at least the $1070-$1080 is in store for gold. Though I think gold will be doing much better come late March. I can't see this current weakness going on too much longer. March 30th could turn out to be either an intermediate top or low on an overall rising leg. The dollar will eventually need to retrace a large percentage of its move from 74 to 81-83? That would give the metals a 6-8 week window in the March/April time-frame.
Newmont came out with a great earnings report this morning and has shot right back up. Odd to see the miners and gold moving up counter to the stock market, copper, and oil moving down. Though eventually at some point that should become commonplace. The morning action in the miners does look pretty strong for the first time in weeks, almost begging for one to jump on now or miss the next move up. There are rumors out there today about China buying up the rest of the IMF gold. That alone could provide some of the bullishness being seen. End of month trading Friday with a FULL moon on Saturday. All aligned for a change by Monday.
This analyst is saying much the same thing I see though in different terms using on-balance volume and price supports.
GLD - GDX - SLV charts
roadrunner
Knowledge is the enemy of fear
<< <i>We may get a bullish engulfing candle in $XAU today. That would be a good sign for the miners and something very much needed to keep the chart from looking like the Grand Canyon. >>
I could easily see that happening with a poor 7 year treasury auction result... and no reason to expect otherwise with the 3 and 5 year auctions being so lousy.
I'm not in a position to play it, but shorting the USD for a short term trade might be a good play right here... at 9:42 MST it's 81.09... we'll see what it is tonight.
<< <i>
<< <i>We may get a bullish engulfing candle in $XAU today. That would be a good sign for the miners and something very much needed to keep the chart from looking like the Grand Canyon. >>
I could easily see that happening with a poor 7 year treasury auction result... and no reason to expect otherwise with the 3 and 5 year auctions being so lousy.
I'm not in a position to play it, but shorting the USD for a short term trade might be a good play right here... at 9:42 MST it's 81.09... we'll see what it is tonight. >>
The day isnt over yet so we'll have to wait and see what the close is.
I am looking more at buying the Euro as there is a double etf, but I can also see the potential for a "super spike" higher in the dollar, lower Euro, so I sit on the sidelines also. Im content with my oil and copper shorts right now.
Knowledge is the enemy of fear
roadrunner
<< <i>The charts don't seem to help one bit at this point. >>
That's why I've started to take in the totality of everything I see, read, and observe for a more complete picture. Seems like my call for today was right on, but that could have just been luck. Had I shorted the dollar during my previous post, I would have made $330 per USD futures contract (DX), or about 20%.
The China/India IMF gold thing is questionable. I've read plenty of articles about why they won't be buying it, but still I think they might end up with it anyway. But how does it work? Could they call at this very moment and buy it at the current spot price, currently $1107? I think they could... they don't have to buy it on the open market. So there wouldn't be any pricing risk if the deal can be locked down before being announced. Of course, any deal would probably include provisions for testing all of the gold for tungsten...
Heard/saw in many sources that the international physical gold market it tight, and that physical buying is increasing noticeably any time gold dips down to 1090-1100. I am convinced that there is a lot of major pent-up demand for gold by people waiting for lower prices... and come Mar 30 or so, there will be a realization that the dip isn't coming and there will be a scramble to place and fill orders.
And of course, we can't forget the historical tendency of the IMF sales to occur at gold price bottoms...
The gold charts have me confused only because they are smack in the middle of no-man's land. Gold could be starting the 3rd leg up from last week or be in the middle of a C leg down from several weeks back at $1162. CCI is smack dab in the middle area (around 0). Either view fits fine with the current charts from what I can see. So much easier to figure out where things are when closer to a top or a bottom. For now one should assume the downtrend is still intact from December until something breaks to a new interim high or misc divergences turn positive.
roadrunner