Active overnight trade with ruthless selling forays that began after yesterday's COMEX close continuing to pressure gold. One source of the selling is structural which stems from annual rebalancing of commodity index funds and clearly impacted gold and silver due to their moves last year. Another may indeed involve position trimming in anticipation of the dithering CFTC finally dealing with the totally unnecessary position limit ecstasy. However these technically wholesome and in many ways invigorating events have clearly attracted the robust fringe of those of whom Sir Alan Greenspan once said, "An almost hysterical antagonism toward the gold standard..." Yes there is a lot of selling that has pushed the price of FEB gold just a little over 4% off its all-time high, boo-hoo. The technicians tell us there is some strong support around $1357. The facts tell us that GSR is slightly elevated ~48.00 given the volatility and hardly a matter of concern. Open interest is virtually unchanged and I would note that last weeks COT showed significant large spec liquidation (the commodity indexers?) more or less offset by commercial buyers (typically sellers of futures). RSI has slipped to ~41.0 this morning close to the lows of last July which launched a $200 run higher. Toss into this mix this morning's consumer price index, for what it's really worth in the event you haven't tanked-up lately, and while the gold price is clearly pressured and unpredictable the basic case is hardly on the precipice of some great chasm. http://www.biiwii.blogspot.com
