Gold guru Leonard Kaplan's comments on today's action. I consider him among the most useful gold analysts because he tries to be as objective as possible with no bullish or bearish axes to grind.
GENERAL COMMENTS:
"On Tuesday, the gold market in New York was up a dollar, and today it was down a dollar. We remain firmly held within the well-known and well-recognized trading ranges, which is great news for the short-term traders. Speculative and physical demand emerges in the market whenever we approach the $271 level in spot and we see speculative fund selling, with some bullion bank selling as well, each time we get close to $275.00. This is quite healthy as gold has always been a "back-and-fill" market. We are building an excellent base and goldbugs should be pleased. I do look for this trading range to carry on for a bit until some outside influence pushes us out, in one direction or the other. My bet is on the upside but my expectations are moderate at present.
If I had to pick any one external stimulus that could do it, it would be the USD and it remains imperative to keep a watchful eye on that market. A declining USD, especially against the Euro, Aussy Dollar, Indian Rupee, and the South African Rand, could elicit greater demand and curtail forward selling and supply. A further drop in US interest rates would also be bullish for the gold market, although not markedly, as contangos would drop further giving producers a greater disincentive to sell forward. Bullishly for gold, both of the above scenarios look much better than even odds at present. " |
