From a distance, it may appear that Friday is just another day. It's not. Keep a close eye on gold all day.
"What's the deal, Turd? The BLSBS isn't until next Friday and First Notice Day is next Wednesday. Why should I care about tomorrow? I'm just looking forward to the weekend!"
I'm looking forward to it, too. It has certainly been a long week. But do you recall how I mentioned last week that gold hadn't had three consecutive UP weeks since last August? That's almost a full year ago!! Yet here we are. As I type, gold is UP about $35 for the week. Can it hold on? For a green candle, we need a close above $1296.
More importantly from a technical standpoint, during the week of April 15, when gold was mercilessly and purposefully driven down through critical support at $1525, gold bottomed at $1321. That low of April 16 held as support for over two months until price was again schemed lower on June 20. We've since rebounded. A weekly close tomorrow back above that weekly low from the original April beatdown ($1321) would be significantly bullish. Furthermore, as of this moment, I show the 50-day moving average for the Aug13 contract to be $1329.70. A weekly close above $1321 and $1330 might be a blow from which the Spec Short Gold Bears may not recover.
However, we must also remain diligent. IF, somehow, price is significantly raided tomorrow and gold were to close below last week's low of $1270....well, let's just say that that would be very bad. Very bad, indeed and it would indicate that a retest of the June lows (at a minimum) was likely in the cards.
Now do you see why tomorrow is "Freaky Friday"?
And I just want to take a moment to reflect upon the ongoing and incredible volatility in the currencies, particularly as it relates to The Pig ($) and The POSX (U.S. Dollar Index).
As anyone who has ever traded Forex will tell you, there was a time when a BIG MOVE in a currency was 20 basis points (0.20%). Heck, 10 basis points was a big, daily move. Now, currencies and indices will move 100+ basis points in a day and no one bats an eye. If anything testifies to the fact that "markets" have been simply taken over by HFTs and algorithmic trading, it's this....but that's a topic for another day.
The main thing I wanted to point out today was the extreme and continued volatility of The POSX. Take a look at this chart. In less than three months, it has round-tripped in a 4-point, 5% range not once but twice!!
I suppose that there are those out there who will apologize for the sorry state of our "markets" and claim that HFT is not to blame. OK. Fine. But then you have to be more than concerned by this:
The U.S. Dollar....which is The Global Reserve Currency...is fluctuating wildly in value...more so than ever before, with the only comparable period I can find being the 8-9 months centered around The Great Financial Crisis of 2008.
Maybe it's something, maybe it's nothing. Only with the benefit of hindsight will we be able to say with certainty. Regardless, to me it's another indictment of the fiat currency system where the value of your work and savings fluctuates wildly based upon the whims of the "market" and a few, unelected central bankers. At the end of the day, you can keep your dollars. I don't want them. I'll keep my gold (and silver), instead.
TF
