Halloween in the Gold Market

It’s Halloween in the Gold market. What costume will you wear? Let me give you some hints, so you will be dressed correctly for the big day.
Let’s get started. You wake up and see Gold open interest up over 20,000 contracts in the last couple of weeks, so you reach for your Bull costume.

Then later on in the day, you hear that the Fed might raise interest rates in December, so you take off your bull costume and put on the bear costume. Feeling you got the right one?

Then you pick up the newspaper and read that central banks continue to buy gold, darn it, I have to put back on my bull costume again.

Then your colleague calls you and says he spoke to this gold technician who charts the progress for gold and he says that Gold is trading under the 200-day moving average, bear costume again? Oh this is getting nuts. Can’t take it anymore? You might just skip this holiday. And to think, after the madness a couple months ago when no one had candy to sell, now it’s free for the taking and nobody wants it.

Get the point?

I want to give special thanks to the Fed for creating such a “ball of confusion.” How can anyone expect the producers and the refiners to get it right?

Today I decided just to shut off the TV and put the newspaper in the pail and just listen to soft music to clear my head.

Just to let you know, I wrote this comment on Thursday and since then everyone heard the FED bear growl loud, causing us to break out of the recent trading range. Now the new bull open interest participants have to reevaluate their positions and we now them running for the hills, looking for some safe territory to settle in.

Trick or Treat

Don t eat too much candy. By the way if anyone has extra, I love tootsie rolls. Have a wonderful weekend

Walter Pehowich is the executive vice president of precious metals investment services for Dillon Gage with over 38 years of experience in precious metals investment services. His career began in 1977 at Bache (which evolved to Prudential-Bache Securities and then Jefferies Investment Bank). While at Jefferies, he served as senior vice president with oversight of investment grade precious metal products. Pehowich holds a National Futures Association (NFA) Series 3 license, authorizing him to advise and sell alternative investments in commodities and futures markets.