Panning For Gold
A volatility burst to the downside in silver (see
yesterday’s Mid-Day Futures
Alert), a relatively strong dollar, and disrupted demand
in one of the largest consumer markets of bullion (India), have all conspired
fundamentally to undermine gold prices. Technically,
April gold
(
GCJ1 |
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PowerRating) was set up in a double-top fractal, a setup
charted in yesterday’s Futures
Recap.
April gold gapped down and plunged nearly $4, a contract
low. Gold has recovered from the previous 20-day low in a Turtle Soup Buy setup,
a pattern that occurs on the same day rather than on the following day, as in the
screened-for “Plus Ones.”
The first increase in unemployment since 1997 in Germany
and weakening manufacturing figures from the United Kingdom are providing latent
signs that Europe’s economy is being adversely affected by the slow-down in the
US. Exports to the US have accounted for as much as 10% of the growth, recovery and
relatively better performance of European economies. These signs
of economic weakness are pressuring
euro FX futures
(
ECH1 |
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PowerRating),
Swiss francs
(
SFH1 |
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PowerRating) and British pounds
(
BPH1 |
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PowerRating) all from the
Pullback From Lows List.
March dollar index futures
(
DXH1 |
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PowerRating), naturally, are rallying in
response to weakness from European currencies and are up .75 at 110.70. As
mentioned above, weakness in gold often occurs when the dollar rallies because
most gold transactions are denominated in dollars. Dollars accelerated after
trading above the high of the low-bar Pullback From
High, day seven of the pullback.
A new edition to the Momentum-5
List,
Dow futures
(
DJH1 |
Quote |
Chart |
News |
PowerRating), are trading on the top of a handle of a cup-and-handle, rallying quietly but steadily as traders continue rotating into blue
chips but also buy into tech. Dow futures are up 34.0 at 11,056.