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BLOG WATCH
As a follow up to our 9th
May Blog Watch where we
reported on the demand
situation The Perth Mint was
(or was not) experiencing,
Commodity Online report Edel Tully
(UBS) as saying that they saw “some physical buying on Tuesday, but the response
wasn’t heavy, suggesting buyers may want even
lower prices.”
That accords with what we are experiencing. Edel thought that good demand may return if prices went “as far back as $1550”, at which point, “given that physical
demand has been so underwhelming of late, its return (when that happens) could well trigger a greater reaction from leveraged players.”
The Fundamental View
is more pessimistic, saying that if the $1,535 “level is breached
on a closing basis, or if it
falls significantly through that level, then the next potential stopping point for gold could be at the $1,300.00 level.” That is
not out of the ballpark as $1,300 is just on the bottom range of gold’s 10
year log trendline.
He says that
“the
inverse head and shoulder
pattern is still in play but is admittedly
looking uglier and less proportional as each day passes. Although I feel it is unlikely
to play out, gold cannot fall below $1,535 if we are to keep that pattern in play.”
But he notes that
the death cross - when
the 50 day moving average falls under the 200 day moving average, which it did
mid-April - “usually implies that the trend has officially reversed indicating that further declines are very likely. Not until the 50 day cross back above the 200 day in what is known
as the golden cross, will I be
going heavily
long.”
Sunshine Profits disagree, concluding that since “the
situation in the general stock market
is mixed for the long term
and a bullish scenario seems a bit more likely than the bearish one for crude oil” it means that
gold “seem to be a
bit more bullish than not
at this time.”
Download today’s full
Blog Watch (pdf 234kb) for more reviews:
DON’T FIGHT THE ALGORITHM
Michael Kosares (Centennial
Precious Metals) feels the algorithms have taken over.
INDIAN JEWELLERY MARKET
The Economist
has an article on a move by large Indian business
to set up jewellery chains
in competition with the traditional local small jeweller. Why?
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