Greetings!, There was some profit taking and re-testing of support early in the New York session today. But gold inched up $1.50 on the day. The expectation of QE3 remains alive and beating in the hearts of traders. You can assign that to softer-than-expected U.S. growth that was reported Friday. But the fervor is subdued, perhaps given that while traders can reasonably expect some intervention by the Fed, it may be a nudge not a shove.
If Europe tightens its economic reins further, the euro will strengthen, driving the dollar down and, presumably, gold up. Yet even this is tempered by uncertainty.
Spain is officially in recession again, the French presidential campaign has become a referendum on stimulus versus austerity, and the British pound is ratcheting up strength, although J.P. Morgan today called that "gravity-defying." It's hard to imagine that austerity will fly for long in the sluggish E.U. countries despite huge debt levels.
Traders should also start keeping an eye on precious volatility indexes. Usually just before, or right at, the beginning of a major advance, one bell-weather of the VI - the average true range or ATR - tends to slide a bit lower.
As always, wishing you good trading, Executive Producer |
