Gold and a large range of commodities got belted last night
But the Gold price and the prices of many commodities along with markets would have seen a much larger unwind obviously imo. Much larger. if it wasnt for the FED
Even though its a bug belting, the FED saved a an even worse correction IMO,
we have a new record,
an absolute stunner in requests for cash from the overnight window from what appears to be also the largest number of participants. Just over THREE QUARTERS OF A TRILLION DOLLARS
If this sort of money was being borrowed in the commercial overnight money markets, one can only imagine the headline interest rates on show this morning and the prices of many commodities including gold, they would be much lower and equity markets would be also. Fed definitely cushioned the blow to cover what appears to be alot of leveraged positions getting blown out
I think alot of front running of some of these commodities by some promoting the super cycle ( commodities required by alot of government sponsored global infrastructure projects still to come online) just got blown out of the way -
View attachment 3287051talk about some need to cover obligations -
So with so many commodities, (not all ) taking a hit on headline price, inflation data should ease.
Governments all over the globe will get a better price for inputs required for all their building projects and alot of front running commodities traders looking to profit from planned global building projects by building speculative positions are going to need stitches at least in the short term.
Clearly a lot of leverage in the system just started getting crushed and many a bank needed cash last night to pay for obligations, theirs and their clients.
Gold push immediately from the open(1809) yesterday to over 1818 to 1826 held the gold miners quite well during options expiry here however it unwound shortly after Asian trade and 1818 (old 2011 closing high) faded.
1803 the low from the previous evening was tested and held for a while but failed to hold along with 1800...
Previous simple support on the chart 1793 ish held for a time as it bounced around to recover 1800, but that all failed within hours and she fell back to lower simple support of 1770.
Fall in AUD cushioned the blow to AUD gold price but it still took a beating down to 2350aud representing some big margin compression
With the immediate bounce in Gold yesterday from open all the way to the close, it will be interesting to see who loaded up and how holds today after such a savaging to gold prices overnight.
Could have been much worse though if the FED hadn't readily handed out 775 Billion imo - quite amazing
Good luck
