NEW YORK -- It was a glorious day for gold bulls who have lately been punting an increase in the gold price based on the metal’s 8-week cycle. It’s still a little early, but if this is the precursor, then the real thing should be something. It was certainly one of the most remarkable intra-day power trends in the gold spot market that we have seen. A clear base was formed in the spot price at noon yesterday with buyers gently soothing it to $352 where hovered from 1am to 6am New York time.
Then someone made a play that forced the price to $354 where a battle raged for two hours before a decisive break came; battled against before another deliberate thrust through $355 where intense trading took place to defend the position before a buyer broke out above $356.
That saw the contest continue at that level, but serious sellers appeared well beaten by noon where they rested until an hour later when more intense skirmishing broke out before the close of Comex, but buyers retained the upper hand and enjoyed an easy run from $358-$360. Thereafter some high altitude ping-pong set in as traders batter the price back and forth between $358-362.
Wednesday was easily the most impressive open-to-close action since mid-May when a nearly identical spurt took gold from $355 to $366 which eventually produced a tilt at $375 before the rally broke down.
Chief among the bulls is Jim Sinclair who has been promoting the technical prowess of Kenny Adams. He sent out a note today saying $400 was all but assured. “Because gold accelerated to the upside this morning, probabilities now support that we are entering into an upside gold price runaway situation that presently indicates a sustained 3 to 4 week run (with very little pullback time) up to $395 minimum and $430 maximum.”
As if that isn’t good news, silver also grabbed attention with a run at $5 per ounce after several desultory months. Spot silver prices went as high as $5.06 today after starting below $4.80.
Precious metal stocks made impressive gains including Hecla and Minefinders which added more than 10%. Among the higher priced stocks, Randgold and Royal Gold put on nearly 8%. They were chased by other intermediate stocks like Goldcorp, Bema, Agnico-Eagle and Meridian which all gained nearly 7%. Glamis Gold was noticeable off the pace with a still handsome 5% pop; likewise IAMGOLD.
Harmony led the major gold producers with a 6% rise followed by Gold Fields, Newmont, Placer Dome, AngloGold and Durban Deep with +5% gains. Behind them came Ashanti, Barrick and Kinross with Bueneventura languishing in last place with a tame 2% improvement
