Will Bullion's Dive Turn Out To Have Been Gratuitous?

May 1, 2015

We’ll probably know before the opening bell whether Thursday’s nasty, $34 selloff was merely gratuitous. Rumor had it that some big sellers clobbered gold yesterday because they felt like it, but we’ll reserve judgment until it has been confirmed by the Times (take your pick which Times). Notice, however, that the 1253.50 rally target we’ve been using this week is still valid, albeit barely, since the low of yesterday’s hit-job left the point ‘C’ low of the rally pattern intact. My bias was mildly bearish shortly before midnight, but I’m not going to lay any odds. If bears should triumph, look for support and a tradable bounce from 1264.50 (daily chart, A=1224.50 on 4/6). 

The world’s gold supply increases by 2,600 tons per year versus the U.S. steel production of 11,000 tons per hour.

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