Wednesday, March 21, 2012

Algos Controlling Gold & Silver

Live 24 hours gold chart [Kitco Inc.]For the 3rd day in a row, silver is practically walking in the shadow of yesterday's morning price action, clearly a sign of a freely traded market, right?  It will be interesting to see whether the algos continue the tight correlation and pattern yesterday's afternoon raid coinciding with Bernanke's indoctrination of GWU students on the problems with gold, or if silver is allowed to consolidate for a day in the $31.80-$32.50 range.  Perhaps the cartel will wait for Part 2 of Bernanke's lecture tomorrow for the next PM smash. 
With support at $32 broken yesterday, don't be surprised for silver to test $30-$31 again, and should support at $30 give way, the lower end of the downtrend channel near $28.  Sentiment is again becoming negative, but has not yet reached the extreme nadir reached recently, although SD Bullion is seeing an increase in calls looking to SELL phyzz.
While we're not ready to declare the risk completely over for a Greek CDS domino collapse, the fact that we have made it 3 days without signs of an extreme liquidity freeze up is very encouraging. 

Live 24 hours silver chart [ Kitco Inc. ]

Gold is also clearly being run by the algos currently, as Monday, Tuesday, and today's price charts could almost literally be superimposed on each other as a single chart. Gold bounced off of support at $1650 right at the COMEX open rather surprisingly, and has since worked its way up to $1660.  Historically thoughout this bull market in gold, any purchase of gold below its 200 day moving average is money in the bank.  Gold continues to provide this accumulation opportunity, but how many stackers are taking it?  Professionals RESPOND TO PRICE WEAKNESS!

Live 24 hours gold chart [Kitco Inc.]