Sellers last night have suddenly taken control of the recent ruffled state of gold trading driving prices down with the largest volume we have seen in weeks at this time of the morning. The size and persistency of the selling is redolent of serious liquidation from someone needing immediate dosh or readys. Why? Perhaps it's the TED spread, suddenly elevated, which gives us a whiff that certain formerly friendly banks are not leaving the light on for their neighbors and those in search of a night-cap have to head for their local Motel 6. We also have anecdotal evidence of ME sellers who are squeezed by margin or redemptions from the long-running Cairo Stock Exchange closure. Bottom line: it's suddenly not as pretty a picture as we have become accustomed to recently. The facts: GSR is ~40.20 and well within the liquidity range. Relative strength is easier again ~57.80 and while providing a modest upside signal it equally is in danger of now failing a test of it prior launch pad. Gold open interest was up ~1,000 contracts and option vols are suddenly back to their lows of the year...maybe suddenly no one cares? Today: Irrespective of how we categorize the selling so far, it has clearly disrupted recent support and of course brought out the usual crackpots with feeble and clumsy climactic scenarios, so expect continued interim weakness and hopefully we won't have to deal with dire predictions of $1400 giving way.
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