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Gold prices showed some life yesterday, bringing us to the higher point of our recent trading range. As in any sustained declining market, a short covering rally is expected from time to time. If we could see a momentum change, with a rally above this $1,100 level, the market could get some traction there, forcing those with short positions to exit the market. That would be a confirmation to the Wall Street Traders that it’s time to reverse their strategy. At this point, especially just before a holiday week, Gold traders tell me that they think this one-day rally will be short lived. So we go back to last week’s technical levels of support again at $1,073 and $1,050, and a $1,100 resistance level to the upside.
Silver also enjoyed a nice move to the upside yesterday. Silver, extremely oversold of late, looking for the shorts to leave town. Don’t forget the trend has been their friend, so it’s not going to be easy to run them out. For the dealers who actively trade physical bars and coins, Silver is still the product of choice with most reporting 7 out of 10 trades are in the Silver side of the ledger. This week, December Silver traded just short of its support level of $13.95.
PGMs are extremely oversold. and as with any rally in the Gold and Silver market, we expect they will follow along. Otherwise it’s the same old story.
Only news from the folks at the FED was from Atlanta Fed President, Dennis Lockhart. He indicated yesterday that he would be comfortable with “moving off zero soon” if economic news doesn’t turn negative before the December meeting. As with any comment from the FED, you need to evaluate what “soon” means. The word “transparency” has been out of their
vocabulary for the longest time.
Author Name: Walter Pehowich
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