Gold price falls through its 200 daily moving average to $1670, down 2% for the day – watch the $1677 level into the close today

This morning we put out a note saying:

This morning however we’ve seen the price once again drop below $1700 – today’s close will be vital in getting an indication if we’re going to see lower prices. If gold can come back this afternoon and close back above $1704 it should mean that gold has ‘bottomed’ around these levels.

Whilst its possible that gold could rally back to $1704 by the close it is looking unlikely – the last line of good support is now right at the $1677 level. Not only is this the lows from back in November 2011, it’s also right where the 200 daily moving average is sitting at – a level that the gold price has been above since January 16th this year.

So why the sell-off again? Take your pick! Although oddly enough some of them are actually positive for gold so this is looking more like the market across the board throwing their collective toys out of the pram as they desperately need to hear from their ‘pusher’ (one Ben Bernanke) that he’s standing by ready to shoot them up with as much ‘liquidity’ as they demand.

After-all today we learnt that the ECBs balance sheet is now north of €3tn –  which should be positive for gold. We also leant that that Leon Panetta (Secretary of Attack – sorry Defense) seems on board with attacking Iran ‘preemptively’ – code for ‘start a war’. Again something that should generate swarms of investor into gold as the ultimate ‘safe haven’ play. And Greece is looking more and more certain that it will use the CACs and the ISDA will have no choice but say that a credit event has occurred (explained here this morning) – again something that carries huge uncertainty and should get people rushing into gold.

But instead or to put it correctly, despite all those things, where gold really should be taking a slingshot to the moon, the price has fallen some 2% today. The only rational explanation is that the junkie-market, so used to getting its liquidity fix, is doubting that Ben Bernankie will come through for them – acting paranoid and jumpy, just like all good addicts do. There is simply no way that Bernanke comes this far and discovers Hayek along the way in some Damascusian moment of clarity. When printing is needed he will oblige – after all that’s what his proven track record shows he is best at.

Gold is currently trading at $1670 – we really need to see a close put in around that $1677 level tonight, otherwise it’s $1650-30 very quickly. We’ve got a few hours yet until the close today, so keep your eye on that $1677 level – it should help us decide the appetite of the bulls.

Gold $ – level to watch:

(click for sharper image)


Link to this article: : http://www.goldmadesimplenews.com/gold/gold-price-falls-through-its-200-daily-moving-average-to-1670-down-2-for-the-day-watch-the-1677-level-into-the-close-today-6307/

Posted by on Mar 6 2012. Filed under Analysis, Gold News, Markets. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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