After hitting a high of 1337 overnight, gold sold off steadily all morning yesterday before crashing lower at the US open, slicing through all but one of the support levels we highlighted in yesterday's blog update with barely a pause for breath.
Gold hit a low of 1282, some $55 lower than the overnight high, before finally stabilising, though the chart damage is significant and the market is closing in on key support at 1272 this morning.
The dramatic sell off came amid weak equities and a tumbling dollar, usually supportive factors for gold, and the Government shut down is giving no support to gold at all. As we pointed in our videos to subscribers earlier in the week, those commentators claiming the Federal Budget deadlock would be supportive to gold "just like in September 2011" are confusing correlation and causation - just because last time there was a Budget deadlock gold rose dramatically doesn't mean that the deadlock was the reason for the rise!
Equities are down sharply again this morning and the dollar is also weak, holding just above 80. It is clear that the Budget debacle in the US is hurting the dollar and the reputation of the US in the process.
Oil is falling sharply along with gold and silver, $100 a barrel is the next target, whilst gold needs to hold 1272 to avoid a swift return to 1180. We aren't banking on it.
Today's video for subscribers looks at yesterday's dramatic trading action in more detail and our strategy for our current (short) trade.
Gold hit a low of 1282, some $55 lower than the overnight high, before finally stabilising, though the chart damage is significant and the market is closing in on key support at 1272 this morning.
The dramatic sell off came amid weak equities and a tumbling dollar, usually supportive factors for gold, and the Government shut down is giving no support to gold at all. As we pointed in our videos to subscribers earlier in the week, those commentators claiming the Federal Budget deadlock would be supportive to gold "just like in September 2011" are confusing correlation and causation - just because last time there was a Budget deadlock gold rose dramatically doesn't mean that the deadlock was the reason for the rise!
Equities are down sharply again this morning and the dollar is also weak, holding just above 80. It is clear that the Budget debacle in the US is hurting the dollar and the reputation of the US in the process.
Oil is falling sharply along with gold and silver, $100 a barrel is the next target, whilst gold needs to hold 1272 to avoid a swift return to 1180. We aren't banking on it.
Today's video for subscribers looks at yesterday's dramatic trading action in more detail and our strategy for our current (short) trade.