Wednesday, September 8, 2010
Gold This Morning - At the Brink --J
Overnight volume was modest and we have had a $6 trading range. Open interest as of the close on Friday was marginally lower ~580,000 contracts. The GSR is currently firm ~63.0 and at the market option vols remain very cheap ~14.5. If you are not aware yet that silver traded above $20.00 yesterday...welcome home. RSIs for both silver and gold (basis DEC) are in the low 70s so we can officially declare overbought territory. Furthermore we are on the cusp of all-time high USD prices in gold but...not even close in Swissys, EUR, AUDs, or even GBP. The not so 'invisible hand' of our government price managers is certainly quivering because irrespective of text-book congestion at new highs there is a momentum building and to modestly refresh you on the A******* principle...You can only manipulate a market in the direction it wants to go...On the way to work the local Starbucks is getting the equivalent of $8.00 a gallon for regular while DEC coffee has hit a contract high in all currencies. So today: high volatility expected with a lot at stake.