This week we see the Santa Claus rally in Gold, and are now back to that 200-Day Moving Average mark that was cracked last week. A close there or above signals a technical rebound.
Gold gained traction Tuesday after Spain raised more than 5-B Euro in its latest debt auction, there was strong demand at lower costs. The news lifted the Euro, weakened the USD, and boosted the Gold price. Greece also raised more than 1-B Euros for 3 months at stable borrowing costs.
Investors looking to buy Gold at cheaper prices stepped in to take advantage of Gold's 7% decline last week. Strong physical demand for Gold came in overnight, and will provide support in here.
Shayne and I still believes Gold will tap 2,000 oz + in Y 2012.
Players are look at Y 2012 for a new asset allocation strategy and Gold looks appealing considering its attractive price levels
From a fundamental POV nothing has changed. they are working to solve the problem in Europe, the US debt situation is the same and growing as it has always been, hence the fundamental drivers of Gold are all still in place.
Folks should know that Gold is a thinner market than other asset classes making big swings like last week's correction are more dramatic. But, in January that things will start getting back to normal.
Gold should continue to trade inversely to the USD as traders flock to the fiat (paper) currency in times of panic and has been the case seen in the wake of the headlines that have been coming out of Europe. Anyone who believes the news media's commentary that the EU is on the verge of collapse is in the Ozone, it is absurd.
Gold mining stocks rose Tuesday. Barrick Gold(NYSE:ABX) rallied almost 4% at 46.38 while Newmont Mining(NYSE:NEM) added 2.33% at 62.47.
Other gold stocks, Goldcorp(NYSE:GG) and NovaGold(AMEX:NG) were running to at 45.90 and 8.88, respectively. Stay tuned...
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.