Cap Still In Place
The fix was in early today. Even though The Pig fell through support, gold was pressured all last evening in the U.S. It rose for a couple of minutes in Asia/London before it was summarily beaten back.
Take a look at this 5-minute chart:
Again, it's tough to say why The Cartel has chosen to defend 1665 so vigorously. It may just be simple math. As I've tried to demonstrate by citing/predicting the changes in open interest this week, The Forces of Darkness may have put themselves behind the proverbial 8-ball with all of the fresh shorts they've added in the past few days. They have not been able to generate any downside momentum with all their fresh shorts. All they seem to be doing is creating a bullish pattern of "higher lows". See below:
They would appear to be doubling-down today in a desperate attempt to start a waterfall decline into which they can cover. We'll see. The Pig, which wasn't helping them at all overnight, has now reversed and has ticked higher. Maybe The Jackals will catch a break. Watch that trendline above for clues. If it continues to serve as a rising floor for bottoms, the pressure will become too great to contain by tomorrow or Monday and 1665 will finally fall.
Speaking of the POSX, it fell right in cue overnight. It's now in a nifty, little down channel that might take it all of the way down to 80 or so. Obviously, you should be watching this closely, as well, for clues as to whether or not gold will finally be allowed to break through 1665.
Lastly, just a quick word on silver. Two things continue to impede its advance. One, being so far below some key technical indicators, it is having a hard time generating the necessary WOPR excitement to bring in a lot of new money. Two, the extraordinarily high margin rates tend to redirect spec money into other commodities where the trader can get more "bang for his leveraged buck". That said, silver is in a very nice and consistent accumulation pattern here. From a long-term perspective, there is nothing wrong with that at all.
And one more thing, I've noticed some comments about the varying forecasts for gold in 2012. I'll reiterate mine: IT'S GOING HIGHER. The chart below is really all you need to know.
Have a great day. Try not to get too worked up over the bullshit machinations of these grossly manipulated "markets". TF