I have an Inflation Expectations Indicator that told me a couple of weeks ago (and I know I said something about it then) that flashed a buy signal on gold. It has taken that long to finally put to bed most of the moronic Federal Reserve price capping shenanigans but between yesterday’s violent multiple whipsaws and today’s bear retreat I would have to say that the current situation is playing out exactly as my indicator told me it would.
Gold closed on the Globex on Thursday at $1657.45 per ounce up more than $12 over yesterday’s close and it did it during the COMEX session. While the price is still bounded by the three moving averages I believe circumscribe its current reality I also note that if you pull up a daily chart that the 50% line on the RSI has been rebuffed 6 times in a row. Hmm, do you think someone is using that line to sell the rally? While at this point I am loathe to use any traditional technical analysis of the price of gold I have to say that a follow through tomorrow towards the convergence of the 55 and 144 EMAs would be a very good tentative signal that the current price-capping policy is now in managed retreat mode as opposed to slam it until the bulls’ spirit is broken mode.
If tomorrow’s close is above the 55/144 EMA point convincingly, say at $1675 or so, I will be very comfortable in saying that the Gold bull is back on and the manipulators are in full retreat.
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