GDX Reversal day?

[Pascal]

We might have a reversal day today on GDX.
The story behind is not known, but it is probably some large funds buying gold at the double bottom after the shakeout during the night.

It might be a reaction to the continued selling pattern in the treasuries and also the fact that even though the yen reversed up after the Japanese authorities declared that it was "down enough," traders are not buying this reversal.
In other words, QE carries the inherent risk of destroying a currency, which is positive for gold.

You will note that there is not much selling on the US$, which is another indication that the move is due to funds buying and starting a short covering rally.



Pascal

[Billy]

Great comments on yesterday's action in PM:

http://kingworldnews.com/kingworldne...r_Markets.html

[Pascal]

After an initial down-gap, the gold and Silver futures show that money is moving back into the PM sector, consolidating our view of a sector turnaround.


Pascal

[Timothy Clontz]

Whoever's running GDX needs bipolar meds by now...

[Pascal]

Whoever's running GDX needs bipolar meds by now...

If you consider gold as a currency, you can see that the US$ has regained much strength, mainly against the JP Yen, while the Euro is also down but less than the Yen.

However, gold is "flat" for the day.
All of them moved closely to Bernanke's testimony.

Since the US$ is regaining strength, in general, that would be negative for gold and the PM sector in general.

On the other hand, there has been accumulation in the Platinum futures for the past days/weeks.
As the US$ gets stronger, platinum might be under pressure, but I would buy a PPLT position on a pull-back to support. Not before, because of the US$ strength.


Pascal