Dear Friends,

Keep your eyes on the gold price in terms of both Euros and the British Pound. Gold is holding very well in terms of both those currencies. It is interesting to note that even with the reflexive panic into Treasuries today and the subsequent move higher in the Dollar as a “safe haven” (excuse me while I try to contain my laughing here), the Japanese Yen is holding remarkably well. The Yen carry trade is over and is unwound so its strength tells me that traders/investors want to own Asia as they see it as the place of future economic might. Are we seeing Asia becoming the “safe haven”?

I would have to see a closing push above 79 in the USDX to get the least bit concerned about any change in the Dollar’s downtrend.

In terms of the mining shares, I would like to see the HUI hold above the 400 – 397 level on a closing basis to move it into more of a consolidation pattern. A failure there could see it move down as low as 386 before some buying comes in.

Support in gold has been emerging near the $995 level with much stronger support near $990 – $988. We will need to close above yesterday’s high to generate some stronger buying enthusiasm from the momentum crowd.

Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini