A raft of U.S. economic data hit the Net today, but gold didn't react much to any of it. Early in the regular session, it fluctuated betwen $1,372 and $1,376. That range was broken on the low end as the metal sunk to a day's low of $1,367.40 in a downwave that a Wall Street Journal report attributed to profit-taking.
Bobbing along just above $1,370 afterwards, it was waved up in two stages by the Iranian news. Shortly after noon ET, the metal had crested up to the day's high of $1,383.30. The crest only lasted until 12:30, when a two-stage ebb brought it down to around $1,374. Lighter bobs got it up in a range between that same $1,374 and $1,376. At the end of regular trading following a final bob-up, the spot price was $1,375.60 for a gain of $2.30 on the day. The Kitco Gold Index attributed -$4.00 to predominant selling and +$6.30 to a weakening greenback. The U.S. Dollar Index's late-morning sinking did have an influence on gold's cresting.
The metal's six-month chart, from Stockcharts.com, compressed the wavings into a thin candlestick. The wicks are the only showing of today's choppiness:
The peak shows some good news for chart-watchers: for the first time, it can be unambiguously said that gold has made a higher short-term high. Today's interday high is greater than January 19th's, which preceded the final part of the January pullback. Should the metal best today's high by only ten dollars more, it will have made a higher high than January 14th's. The 14th marks the start of the more erosive part of the new-year decline.
The metal's Moving Average Convergence Divergence indicator, found at the bottom of its chart, shows a solidly bullish configuration - and a duration for such that rivals the fall. I can't make that much out of this strength, because gold's likely in a consolidation phase right now, but it gives further evidence that the worst is over. Should the metal actually continue to rise and make a new all-time high this month or next, it would be acting markedly out of character. More likely, gold will stay range-bound.
The U.S. Dollar Index did not have a good day, the damage being done in the morning. Reaching as high as 78.79 just before 9:00, the Index reversed course and slid down to as low as 78.155 just after noon. Stopping its decline, the Index spent the afternoon bounding between that level and 78.4 before settling into a narrow range bordered by 78.2 and 78.275. As of 5:30, it was exactly 78.25.
Its own six-month chart, also from Stockcharts.com, shows its larger pullback after yesterday's small fall:
Although lumbering, the Index has still put on a higher low followed by a higher high. Its turnaorund hasn't been very impressive, when compared to its slow-motion plummet last month, but it's still real. Should the uptrend continue, it'll bottom somewhere around 78.0 and resume climbing. A descent to as low as 77.5, however, would put a question mark on its recent recovery.
With respect to gold, its cresting shows continued evidence of the fear trade. As with the Egyptian turmoil, panic-inducing events still have the ability to get the metal up. Today's didn't last, but that could be caused by traders waiting to see if the other shoe goes splashing down. Eventually, its current run-up will be replaced with a pullback; given how far it's gone this month, any such sinkage would almost certainly bottom at a higher low. As for tonight, Asian physical buyers may continue to hold off in the hope for higher prices - but their reluctance is beginning to take on aspects of denial. They may get better prices, but the farther gold goes the higher any "better price" will be.
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