A Gold Moment: October 23, 2014
Thursday brought gold traders back to the comfort zone they were in before the negative economic headlines began to shake their views of reality last week. All it took was for another low weekly jobless claims number. With this measure the belief of Fed interest rate increases coming sooner than later re-entered the daily conversation. The USD has regained its role as safe haven and real rates have crept back higher. These moves have been enough for the weaker longs to abandon their posts and join those who see stability in the global economy.
The renewed confidence in the USD would normally have knocked gold back to where it came from. This would especially be true with yesterday’s confirmation of stable and low US inflation as measured by the CPI. Yet the sell off was tame. The likely culprits are a combination of demand side expectations. It is said that the Russians are buying gold for their reserves as are the Chinese. The Indian gold demand for this year’s Diwali festival is measured higher than previously expected. On top of all this there is the Swiss gold referendum that seems to be picking up favorable support. The combination of all these factors may keep prices from dropping while money managers reallocate into USD based positions.
Technically, intraday charts favor bulls, the daily is neutral and the monthly favors bulls. Support in spot gold can be seen at 1224, 1218, 1212 and 1208. A rally and close over 1239 can renew the bullish momentum that started last week.
ETF: GLD Deposits: 749.87 tonnes unch
Comex GC O.I.: 409,425 -1632
ETF: SLV Deposits: 10,681.42 tonnes unch
Comex SI O.I.: 172,627 +2435