Despite Drop In Early Afternoon Gold Closes Steady

One thing's for sure: the North American snow turmoil didn't have much effect on gold one way or the other. After an intial run upwards to $1,340, prompted by a positive but disappointing ADP jobs report, the metal faded back to fluctuate around the mid 1330s. That ended shortly before noon, when it took another daily dive into the high 1320s. Again, $1,325 lended support: the daily low of $1,325.90 was made at 12:30.

Then, the metal first recovered to $1,330 and then mounted a three-stage climb starting just before the end of the pit session that took it up to the high 1330s again. Fading back just before regular trading's end, the metal closed at exactly $1,335.00 for a drop of $6.90 on the day. The Kitco Gold Index split the loss into -$5.40 for predominant selling and -$1.50 for a strengthening greenback. The bulk of the net decline having been booked in the pre-regular morning, the metal stayed largely steady during the regular stretch.

Gold's six-month chart, from Stockcharts.com, shows today's blip-down as continuance of a short-term line:



I may have been premature in noting a U-shaped bottom for the metal, or just plain inaccurate. As the Egyptian turmoil turns from a fabled velvet revolution into something a little uglier, the world is beginning to turn to other matters. There's nothing really bearish in the chart as of now, but gold's recent momentum has been sapped.

Turning to the U.S. Dollar Index, it managed to break above 77 before the regular session started. A fall below that level at 10:40 prefaced a run that took the Index up to 77.30. Double-topping in the early afternoon, it faded back to hover around 77.1. As of 5:30, it hit 77.11.

Its own six-month chart, also from Stockcharts.com, shows a relief rally that still looks small compared to yesterday's plummet:



The Index is no longer in a fully oversold position, but it's very close to being so. Today's relief rally may signal a short-term turn upwards, perhaps to 77.5, but it's still steady as she goes in the bear department. The greenback's downtrend is readily evident.

With the Chinese markets closed for Chinese New Year, there's been a lull in trading that seems to be reflected in a lull price-wise. Gold took to the snowstorms fairly well all told, and should stay in the 1330s in the overnight session. The Egypt snap-up is largely holding.