An Oddity

While silver chugs toward $38 and crude sits solidly at $106, gold is stuck in the mud. Not only is it stuck, its been in a weird, $4 range since noon yesterday.

This simply can’t and won’t continue. Unless there is suddenly a rush from “risk assets” like last week, silver and crude will maintain their footing and continue even higher. Under that circumstance, gold will not stay in its current location. Take a look at this chart:
3-24amgold.jpg
The only explanation is that crude is essentially the same price as it was 24 hours ago. But silver isn’t!
And why would gold and crude be suddenly tied at the hip? It just doesn’t make much sense. Like I said above…an oddity.

Something tells me that this is about to change, however. Gold will not stay here at 1440 indefinitely. It will either break UP or down very soon. Take a look at this chart:
3-24amgold2.jpg
That short-term trend has been in place for a week. That’s pretty good. The duration increases our chance of gold breaking higher.
On the flip side, crude seems to be hesitating to burst through the old highs near $107. It could pull back toward $105 without violating its short-term trend. If it does, gold could trade down toward 1434 or 1433.

One quick note about silver…it appears to have taken on a life of its own. It is moving independent of gold and crude and this is very, very interesting. I’ll discuss this in greater detail in the next post.

Have a fun day! TF

http://tfmetalsreport.blogspot.com/2011/03/oddity.html

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