I must offer my apology for not having updated the weblog recently. Due to circumstances beyond my control, I have been unable to keep up with my regular posts. I have added this item to my New Year's resolutions so, hopefully, I'll be more consistent in the New Year.
The following comments were transmitted to Myra Saefong, Financial Writer at Marketwatch.com, this morning at 8:11 AM EST.
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The daily chart on Gold is almost identical to the daily chart on the Dollar/Yen as both have taken a pounding the last 3 days. Obviously, traders are watching the $500 level very closely as Gold continues its decline. The Gold market is well known for these sharp retracements and it was just a matter of time before traders pounced on the opportunity to ambush the markets again. With volatility now reaching extreme levels I'm expecting the markets to quiet down somewhat as we head into the New Year. With the FEB GOLD contract testing the 20-day MA this morning we'll have to see how the market reacts to this first area of support. If Gold manages to hold here, then the market could just turn and make new highs before the year ends. Although the Precious metals markets have managed to come well off their extremely overbought condition, Gold could pull the entire metals complex lower if it manages to log consecutive closes below the $500 mark. If that were to happen, we could be in for an ugly end to, what so far has been, a stellar year for these markets.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
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