So, let's see. The fiscal cliff "deal" involves massive tax increases and no spending cuts. NO! Really? You don't say. And now, all those who were selling and shorting the metals are getting squeezed. Welcome to 2013.
I'm still on vacation and won't officially be back "on the throne" until Friday morning...just in time for the latest BLSBS. For now, we should all be pleased with this rally in the metals. I'd mentioned last evening that I wanted to see $1690+ and $31+ and, this morning, we've got it. This doesn't mean it's time to sound the All Clear yet but it is definitely an encouraging development, as you can plainly see on these hourly charts.
Regardless of the very short term movements, I still expect vigorous rallies from here as reality sets in for 2013:
- The U.S. fiscal and economic picture has worsened.
- No doubt another debt downgrade is coming.
- Spec long money, which was squared up and exited the market in December, is already coming back in.
- QE∞ is now guaranteed to last through 2015 and beyond and $85B/month will be proven to be insufficient. Watch out for the BLSBS. A surprisingly lousy number will give the smartypant shorts a true religious experience on Friday.
For now, let's just hold and consolidate these gains and then make runs to and through $1700 and $32. I'll be able to give more specific targets once I'm back in the office.
Lastly, this article was posted to ZH yesterday so you might have missed it. Very interesting with some particularly telling charts. http://www.zerohedge.com/news/2013-01-01/what-happened-last-time-gold-and-central-banks-were-so-far-apart. (I'll tell you what's "afoot". Massive price suppression, that's what!)
Have a great day!