The Short term Rate for 90-Day T-Bills have dropped by 8% today ($IRX 4.13% now) and was down as much as 10% at one point. Money Markets are tightening up very quickly it appears. The "dash for cash" is on and the action in the gold shares today speaks volumes about where the gold price could be headed very soon...
As expected, we got some major fund liquidation across the entire metals complex today. Even though the selling was very severe, gold and silver have rebounded quite a bit from the lows already. GCZ has rebounded close to $9 and Silver about $0.60 from the lows. The XAU/GOLD ratio hit a level this morning that I have been keeping my eye on for many months now which now corresponds to a LTBH (Long-Term,Buy-Hold) opportunity for those that believe the precious metals are likely to move higher over the coming seasonal months. Re-entered GCZ today in anticipation that today was a major, major low in gold...
XAU:GLD Ratio hitting a major BUY point today. Matched .187 going right back to the May '05 low in the gold shares...
Do you mean a buy point for gold or gold stocks, or both? Thank you for your commentary. It's been spot on.
Can be for both gold metal and the shares. It appears that the $SPX and $RUT had very nice upside reversals while the $INDU printed an impressive hammer as well. The Yen reversed from hitting 111.98 to 114.20 in a matter of minutes. I also find a supportive factor that the $SPX held its March low and had a monster reversal to close the session. Lately the metals are moving along with the broader market so if the equity indexes have established some type of important low here, then this will be very beneficial for the metals and gold shares too. If the carry factor is still in play, then we likely need to bail out of all new positions on a breakdown of 112 dollar-yen.. Watch this level as it holds the key to everything from a liquidity standpoint!
Yeah, I'm figuring that with the nice steep yield curve we suddenly have, we have a very nice environment for gold and gold stocks all of a sudden. Huge swing on the gold stock indices today. Sometime soon I'm figuring there's going to be a big rally.
I also have a Silver thread as well posted under SIU7... Silver was bot near the lows yesterday for basis December. The lows should be in for the rest of the year but one really never knows. I have stops set below to at least lock in some profit if I am wrong.
Today's rebound in the metals complex is quite encouraging. Still have about 3hrs. left in the pit session but so far the buying looks good. The Fed's announcement today sets the precedent for fed funds rate cuts in the near future as the USDX looks to resume its downtrend. I find it quite interesting that the DX hit 82 right on the nose this week before backing down to under 81.50 now. If the COT report for the the DX show commercials bailing out of their long positions this week, then i will be even more confident that we have seen a very important low for gold this week. The June low took gold down to 638 cash while yesterday's low went down to 641. So if we hold this level then the series of "higher lows" will remain intact from the October 575 low of last year. Ideally, I would like to see gold break and hold 662 in the coming days..