Dealers reporting strong redemptions in the physical market yesterday as the price of gold rallied to the upside of its most recent trading range.
It seemed that a lot of investors were waiting for a pop in the price before cashing in their holdings. The action seemed to have flushed out a few nervous shorts and the longs are happy to see the price staying above the $1,200 dollar level.
Window Shopping The Price Of Gold
Over the past couple of months, it seems to me that the market has just been window shopping the price of Gold. Currently in the Futures’ markets, market participants are steadfastly holding onto their positions with very few, if any, willing to add on at this point.
Who will emerge victorious? The shorts who expect future rate hikes along with a continued rally in the stock market, or the longs hoping for a turnover in the U S Senate, which could derail any of the Presidents future proposals?
Before yesterday’s action, traders were describing the action in the price of Gold was like watching grass grow. The grass was growing and getting very long, so some action needed to be taken. But was it enough?
We need to break out of this range of $1,180 to $1,210 to get one side or the other excited again.
Wall street Gold traders tell me that the action yesterday was a one-day event. They claim that if this was a true short-covering rally, the market would have traded much higher.
You must think that I’m losing my mind, but I’m not alone as there are some impatient large Wall Street Gold spec traders just dying for some action. It’s been a long time since I have seen these guys in the market. The summer is over and they are back, but the market continues to stay steadfast and trade range bound.
Real volatility in the price of Gold is absent in this market. Physical secondary market selling that was abundant just a few months ago, pushing premiums to new lows, has dried up, so where will the action come from?
Markets just don’t stay dormant forever. One can’t argue that this run up in equities is just short of amazing. So we look to the horizon for some hope. And all I see in the distance is a sign that says the mid-term elections are right around the corner.
Right now there are no other signs within view.
Have a wonderful Wednesday.
Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.