traderdannorcini.blogspot.com / By Dan Norcini / Thursday, January 24, 2013
Yesterday I mentioned that gold had stalled out at its 50 day moving average, which just so happens to come in very near the psychological resistance level of $1700. Today it was knocked lower and hit its 200 day moving average on the downside which has stopped its descent, for now.
There looks to me to be a couple of things going on here. The first is a technical failure with its inability to get a handle of $17″ in front of it. That must occur for momentum based buying to come in, buying which I might add is necessary if this thing is going to to anything to excite the bulls. The Swap Dealers and Bullion Banks are selling very heavily at this level and are absorbing all of the bids coming into the market.
The second is that I get the distinct feeling that what we are seeing is disenchanted short term oriented traders who are are giving up in disgust at gold’s lackluster performance and are looking for more fertile grounds elsewhere. And why should they not at this point seeing that it is the equity markets that are attracting all the hot money flows.
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