ECB announced decrease of interest rates. Low interest rates are bullish for PM however there is a lot of newcomers (speculative money and safe heaven seekers) in PM who have no idea why PM go up. This is why PM spiked down, some of these newcomers are going now back to stocks.
SNB announced pegging CHF to EUR this is also very bullish for PM because people will sell CHF and buy PM. Remember when CHF skyrocked in August? Imagine now that next time when markets will get bad economic data people won't buy CHF they will buy PM!
We have to be very carefull when QE3 will be officially annonuced it's bullish for PM but it a short run it can cause the same results as ECB interest rates lowering.
We are going to see large amounts of funds leaving the Swiss now for gold. There are no more safe havens. Silver also jumped up 2 bucks.
That takedown and hour ago was very predictable, but the immediate buy back was not. The banks are losing their grip and will not go quietly in the night. This will be another very interesting trading day. These margin hikes are losing their punch. The sooner we get to all cash for the contracts, the sooner we will find where the "real" price lies with these metals.
Lots of people got burned with the swissie peg, so there might be further sales of gold on comex open to cover the losses. I'm thinking it might drop to 1780 before springing to to 1860...might then retest 1780 before launching to 2000.
Jimux wrote: Lots of people got burned with the swissie peg, so there might be further sales of gold on comex open to cover the losses.
I don't think that pegging CHF caused sell of gold. I think that lowering interest rates by ECB caused selling in PM and buying in stocks. See AUD/EUR.
I agree that the CHF peg is extremely bullish for gold. I'm just saying that there are probably a lot of fx traders who just got burnt to fuck and will have to sell other investments to cover their losses, some of which might be gold. but then i'm new to this game and just trying to figure out who's screwing the pooch.