gold, page-2143

The COT report is a whole different ball game and you won't find many using it as a timing tool. I suspect at this stage since understanding and using the COT is outside my scope currently, is that Commercials are passive hedgers and not interest in timing the price of what they produce but to be guaranteed a price to match their opex economics.

I can only read short term charts intraday depending on the news. Take for instance last night as the bears rushed out of USD on that jobs figure and then got smashed. I didn't think at the time the price action warrant such aggressive rally in the risk FX pairs but I don't go butting head with the market even short term. That initial spurt now looks engineered as the MM wanted to either square off their net positions or add. One never know how they operate exactly but they cannot hide price.

One thing of worry is that gold until recently never did garner much publicity. This is good as it slowly bubble away. Then all of a sudden Gold Sach I think recomend buying gold and billionaires like Duckmiller are recommending a rush into gold. I take that as these big fellas want the price to ramp up so they can take a much more value shots. That is the USD quoted perspective

I am more interested in AUDUSD and here is where the fate of valuation in Oz goldies depends.

AUDUSD D1

Inflection level on the Aussie. The pull back this week was very mild. 'Normally' I would expect price to pullback to the new resistance where it broke out from before rejecting and heading south. The fact the pullback is so minot is saying bears are in control. You can read all the bearish fundamentals from rate cuts to RBA's recent opinions on inflation etc but the direction is bearish. I suspect eventually the bears of which I suspect RBA is one of the market participants will be attacking the swing lows where you "know" LT bulls could be trailing their stops. There is a lot of space for AUD to continue to sell down potentially in the bigger picture but whether it will get there is anyone's guess.

Fundamentally it does make sense that our economy is no different to the consensus developed economies all trying to stoke growth in an ever decreasing capacity of what their respective CB can achieve. If the China effect do a big wobble, we will get buried in the exit on a small door. I am not sure if gold valuation will hold unders such stressed scenario because fear does not look at fundamentals until the dust settles!

This is why I cannot understand why goldbugs are 'praying' for market crash scenario making an assumption it is a binary event on gold. And this is the reason I do not hold down trending goldies or the specs explorers. Yesterday's darlings should have much higher valuation since the cost of money is cheaper and XAUAUD is somewhere in the levels on 2011 gold price spike. However in reality the unmatched valuation currently on massive hair cuts to these fallen angels should be raising all the red flags! Specs will always remain specs requiring euphoria in general.

There is no guarantee that this gold price swing is not a much bigger dead cat bounce. Despite what bias here is on the DXY, very much will depend how the numbers on US data will be and I am not prepared to just assume that they cannot hike rates. When they do, we will see who is swimming naked once more.

Will be following tonight's US data release..Meanwhile I can only speculate with logical reasons.