Gold – 25 Oct

Gold closed up on a big white candle, very near the high of the day. Volume was good, but not astonishing. The chart is now neutral with a breakout of the current downtrend and the swing high at 1696 taken out. The Bollinger band serves as resistance up to the 45 day moving average (blue) currently at 1732. Another close above 1680 will confirm a breakout and should embolden the longs for a run to 1775. Support is at 1600. Any swing lower confirms the neutral position of the chart until it takes unless it takes out 1604 and makes a lower low.

Gold is acting more as a risk hedge and a safe haven than a risk asset. Don’t worry, take a walk and it will flipping around as the algorithms and hedge funds create churn. The problems cannot be fixed in Europe, or here in America for that matter. The EU will have to change the ECB’s mandate to enable it to inflate. Otherwise they must standby and watch the debt collapse, taking down the shadow banking system of derivatives with it. Doing nothing is not an option.

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