Got Gold Report - Gold Selloff Not Supported by Some Indicators
By Gene Arensberg
10 Jun 2007 at 02:38 PM GMT-04:00
resourceinvestor.com
ATLANTA (ResourceInvestor.com) -- In a second consecutive weak trading day gold selling pressure largely attributed to U.S. dollar strength tripped sell stops and long trailing stops sending the cash market gold price as measured in U.S. dollars into the lower $640s Friday 6/8.
In action reminiscent of what some traders termed “selling raids” in the summer and fall of 2006, the trading Thursday-Friday took out multiple sell stops along the way to the lowest intra-day gold price since mid March. By the end of trading Friday gold showed a last trade on the cash market of $648.95, a two-day plunge of $21.14 and a one-week drop of $22.03 for the yellow metal.
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Interestingly, the sharp down move for gold really isn’t supported very well by some of the indicators followed closely by this report and that condition prompted this supplemental update to the Got Gold Report, the last offering of which appeared one week ago.
In particular consider that at one point Friday with gold off over $14 the ounce the AMEX Gold Bugs Index [AMEX:^HUI] could only manage (at its worst) a decline of 6.36 points (as low as 319), but more importantly the popular collection of unhedged miners staged an impressive comeback by the Friday close (back up to 326.14 which is 0.78 points ABOVE its Thursday close). That action suggests that investors were in a bargain hunting mood for mining shares into the significant dip for gold metal at least as of the end of the week. It also means that for whatever reason mining shares failed to leverage to the downside the sell-down for gold metal, undoubtedly a disappointment for those on the gold short side.
The next full Got Gold Report is scheduled for next weekend, but for our regular readers below are links to most of the technical charts used regularly in the report with updated technical and market commentary on the charts themselves.
Until next time, as always, MIND YOUR STOPS.
Got Gold Report Charts:
Silver 1-year daily
Gold 9-month daily
Gold 2-year weekly
HUI 9-month daily
HUI 3-year weekly
HUI:Gold Ratio 1-year weekly
HUI:Gold Ratio 2-year weekly
U.S. dollar 1-year daily
U.S. dollar 2-year daily
The above contains opinion and commentary of the author. Each person should study the issues carefully and, as always, make their own informed decisions. Disclosure: The author currently holds a long position in streetTRACKS Gold Shares, iShares Silver Trust and holds various long positions in mining and exploration companies. |
