Gold price smashes back above its 100 day moving average on bad but ‘good’ US unemployment data


A couple of weeks back during the US government shutdown we noted the absurd position the Federal Reserve found itself in. We wrote the following in an article titled “The Fed’s flagship monetary policy is tied to a piece of statistical data that doesn’t even exist”:

So we now have the utterly preposterous situation where the Fed says it will keep rates at zero, unless the unemployment rate falls below 6.5%, and when the Fed tries to find out what the unemployment rate is in the US, you-know, so it can decided the rather fundamental ‘thing’ of how much money it’s going to print, it can’t, because the arm of government responsibly for publishing the unemployment rate isn’t even collecting the data! You just can’t make this stuff up, and sometimes all you can do is sit back and laugh at the utter insanity of it all.

The Federal Reserve’s flagship monetary policy is tied to a piece of statistical data that doesn’t even exist. Re-read that sentence a few times and let it sink in just what a mess the whole thing is right now.

The absurdity of the above is now over and the government has got back to work, which means we can be treated to more government goal-seeked data. The most watched, and the one that the Fed has explicitly tied monetary policy to, is the US unemployment number, which we got earlier today.

The number came in much worse than expected, but nobody cares anymore, as long as it shows that the Fed wont taper, ever, then every asset goes bid. And that is exactly what has happened today, with gold jumping $20 in a matter of minutes.

Gold $ (4hr):

gold $ 22 october 2013 a(click for sharper image)

Note that the gold price is some $60 higher than Goldman Sachs ‘slam-dunk’ gold sell recommendation – more muppetering from the muppet-masters, as no doubt Goldmans was lifting any and all offers from their own clients they just told to ‘sell’. When Morgan joined Goldmans in their gold sell reco we wrote:

Bloomberg is reporting today that Morgan Stanley is now expecting to see lower gold prices through 2014 – Morgan now joins Goldman, who earlier this week said that lower gold prices are now a ‘slam-dunk’ – which is a very interesting use of verbiage in our book, George Tenet said the evidence that Saddam had WMDs in Iraq was a ‘slam-dunk’ as well, and that didn’t exactly turn out as planned…

…The US economy will be much worse than is currently predicted, and the Fed will never, EVER, stop printing money – it’s all one giant bluff, which the big banks (who get all that free-money from the Fed lest we forget) are all too willing to park sanity at the door and aid them in their giant bluff – don’t let them con you.

Like we said, that was when the gold price was $60 lower than it is today.

The move up in gold has now taken the price back through it’s 100 day moving average, something regular readers will know we’ve been watching carefully the past few months (see this and this).

Gold $ (daily):

gold $ 22 october 2013(click for sharper image)

Keep an eye on that 100DMA to offer support going into the day’s close, it is currently sitting at $1326 – a close above that should be enough for gold to retest the 55DMA, which is currently sitting at $1341 – If/when gold breaks through the 55DMA we can start to look forward to the bullish head and shoulders bottom being confirmed, which will paint a very bullish technical picture as we head into the end of the year.

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-price-smashes-back-above-its-100-day-moving-average-on-bad-but-good-us-unemployment-data-12056/

Posted by on Oct 22 2013. Filed under Gold News. 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.

1 Comment for “Gold price smashes back above its 100 day moving average on bad but ‘good’ US unemployment data”

  1. I was tempted to buy an M&S jacket emblazoned with 2 large labels saying ‘Yorkshire Tweed’ both on the cuff and on the inside lining. A tiny label buried deep in an inside pocket said ‘Made in China’. For some reason I remembered that the ‘Challenger’ disaster was caused by what, at the time, was considered to be an insignificant rubber ‘o’ ring component. Could that same insignificance herald an impending financial disaster in the West? When China decides to pull the plug (or deliberately snaps the ‘o’ ring!) I hope I’m a watcher and not an occupant of the exploding spacecraft mayhem.

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