Sellers Sabotage Gold's Celebration

The guy in the picture has been shuffling around the pedestrian mall in Boulder, Colorado, for the last few weeks, but he should try hanging out in front of the COMEX in New York if he’s serious about buying gold and silver cheap.  It was there, at the tail end of last week, that bullion was not merely “unwanted,” but positively despised. Exchange traders couldn’t dump the stuff fast enough, judging from the way prices plummeted early in Friday’s session and barely bounced for the remainder of the day.  When the dust had settled, August Gold was sitting at 957.50, down 24.80. July Silver got hit nearly twice as hard in percentage terms, diving 64 cents, or 4 percent, to close at 15.25. (Incidentally, traders can stay apprised by clicking here to join our free daily briefings each morning just before the NYSE opening.)

Some attributed the selloff to disappointment over gold’s inability to push above $1000 last week after hovering briefly above $990.  In that regard, we must confess to have been somewhat disappointed ourselves, since we had predicted a surge to at least $1008, followed by a quick consolidation, then a follow-through to $1066. Now it looks like we’ll have to wait. But for how long? Our suspicion is that the sellers got some help from Friends on High. Although we’re not big on conspiracy theories, it seems doubtful that disappointment alone could have accounted for the drubbing bullion received on Friday as it revved up for a move past $1000 that had seemed a foregone conclusion. It felt more like a shot across the bow – a warning to any speculators who fancy themselves getting rich effortlessly as they dance on the dollar’s grave.

A Resurgent Dollar?

Not last week, they weren’t. The U.S. Dollar Index recorded its biggest one-day leap in months on Friday, rising 1.24 points to end the day at 80.67. We can’t say we were surprised by this, even if gold’s weakness caught us unawares. Rick’s Picks has been tracking the NYBOT Dollar Index dollar very closely since May 29, when it broke beneath a key Hidden Pivot support at 80.04. That appeared to contradict our deflationary scenario of a strengthening dollar, a globally unexpected event that would have the effect of putting many debtors deeper in the hole. Still, we didn’t give up on the dollar when it cracked the support and fell thereafter to a so-far low of 78.33. Now, with Friday’s rally and Monday’s bullish follow-through, the dollar warrants even closer scrutiny, since an emerging, bullish trend could have grave implications for all who owe dollars. We’ll be watching closely. Incidentally, you can stay closely in tune by clicking here to join our free morning briefings for traders just before the NYSE opening.

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Calling All Traders…

Ever found yourself sitting on your thumbs after the opening bell, waiting for the dust to settle?  If so, then you know how much harder it becomes to trade profitably as the day wears on. That’s because once a market has established an opening range, trading becomes essentially a frustrating game of second- and third-guessing other traders who are trying to second-guess you.

But suppose you were able to predict the high or low of the opening range beforehand?  Using your crystal ball, you could be waiting at the bell with your bid or offer, ready to pounce on what will later turn out to be at the high or low of the day. Wouldn’t that be a trick!

That is exactly what we attempt to do each morning, using the Hidden Pivot Method to spot predictive price patterns that may have occurred overnight. If you want to see how this is done, and how precisely, please join me for The Morning Briefing each day before the opening this week and next. Beginning on Monday, June 8, these 20-minute sessions will commence online sharply at 9:00 a.m. EDT. Our goal will be to identify trading opportunities for that day, with a particular emphasis on Comex Gold futures and the E-Mini S&P.  The Morning Briefing will be open to all, but to sign up you will need to click on a link at the bottom of the free commentary that I send out via e-mail each day. If you are not already receiving this publication, click here to have it delivered starting tomorrow. 

See you Monday morning!

Rick Ackerman

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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company.

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