Wednesday, April 6, 2011
Gold This Morning: We Threw a Party and No One Showed Up --Jon
Vigorous overnight trade pushed June gold above $1460 and provided only a few bleak windows for grim shorts or cheerless new buyers to climb on board at lower levels. Yesterday's $20+ buck romp to the upside spontaneously came out of the text book so please do not dwell on those describing gold as in bubble or driven by convulsive hysteria.... The facts: On Monday, COMEX gold open interest fell ~5,000 contracts to near a seasonal low ~488,000; it's clear that shorts are closing and simultaneously the option ring is attracting doughty interest, pushing vols this morning close to 15% for at the market near months. GSR is currently at a new low on this move ~36.90; I think it's time to stop cannonballing into the liquidity pool and recognize that silver truly has physical shortage issues driving GSR lower and you can expect as usual that this will ultimately be unfairly resolved by those who make the rules...bottom line: do not succumb to fuzzy thinking that silver will pull gold higher. Today: Yesterday provided us a cornucopia of all we could have asked and we'll focus on the next measured move in the mid-$1470s as we enter the planetary orbit of the next big round number.