The start of the pit session saw the metal between $1,368 and $1,370. An initial jobless-claim number of 409,000 detracted from the recent string of good U.S. econmic reports, and had a hand in boosting gold up. It got up above $1,375 before the bad-news-induced rally fizzled.
Subsequently, starting at 9:20 AM ET, it fell back to make a new low of the day; by 11:15, it had reached $1,363.90. During that slump, the U.S. Dollar Index continued its climb to well above 80.75. The greenback's rise could only hold gold back for so long: the next thirty-five minutes saw the metal bounce up and make a regular-session high of $1,377. Unfortunately, that rally was like a balloon that slowly leaked air throughout the afternoon. Most of the leakage took place in the early part.
When the pit session ended, as of 1:30 PM ET, the spot price was $1,371.90 for a loss of $6.70 on the day. The Kitco Gold Index attributed +$3.60 to predominant buying and -$10.30 to a strengthening greenback.
The electronic-trading hitch saw some fluctuating, and the slope was gentle, but the overall trend was downwards until the close. By later afternoon, though, the decline became gentle enough to be effectively flat. At the end, 5:15 PM, the spot price was $1,371.10 for a loss of $7.50 on the day. The Kitco Gold Index assigned +$3.20's worth of change to the predominant-buying category and -$10.70's worth to the strengthening-greenback one.
Gold's six-month chart, from Stockcharts.com, shows the metal staying in its range:
It also shows the metal enduring a fourth consecutive loss day. The technical picture continues to look less than inspiring, with the Moving Average Convergence-Divergence (MACD) indicator at the bottom of the chart still in a bearish configuration. Had it not been for robust physical buying, the range would have likely been broken on the downside.
There's still a chance it may be. Peter Brimelow's latest column shows the drop inducing caution amongst short-term traders, but sanguinuity amongst other goldbugs. The recent drop has not induced that much bearishness, which is worrying to a contrarian.
As indicated above, the U.S. Dollar Index had another good day. After a jobs-claim-amplified slump-back, which started around 8:10 and ended just before 9:30, the Index was below 80.25. It then started on a tear that didn't turn tail until it was almost at 80.85. The 80.5 resistance level was blown away. When morning turned into afternoon, the rate of ascent was much gentler but still there. 80.85 was poked at a couple of times and eventually overcome in a later-afternoon run that almost got the Index up to 80.95. As of 5:30 PM ET, it was still at 80.92.
Its own six-month chart, also from Stockcharts.com, shows the recent bearish tilt eliminated:
The Index is now above its recent high, making for a break of the lower-high pattern that used to be there. Its fourth consecutive day of gains has left it only a smidgen below the 81 resistance level. Its own MACD lines aren't far away from crossing over into a bullish configuration. The only bad sign comes from both lines being at a lower level than where they were at the last high, even though the Index itself is higher. That divergence, though, is not shown by the Relative Strength Index at the top of the chart. Sadly for gold, it looks like the greenback's still on a roll.
As long as it is, the metal isn't going to have that great a fate. The lower part of its range is still holding, despite several tests in the last couple of days, but the risk of a breakdown is still there. There might be some better performance news tomorrow, but there isn't much grounds for excitement now.
No comments:
Post a Comment