Today King World News is reporting on incredibly important developments taking place in the gold and silver markets. Acclaimed commodity trader Dan Norcini spoke with KWN about the amazing action in both of these key markets and provided four tremendous charts. Below is what Norcini had to say in his interview.
Norcini has been stunningly accurate in his predictions of the movement in the gold and silver markets. Now the acclaimed trader discusses these incredibly important developments in both of these markets: “Gold appears to have successfully retested its former spike low down in that important support level between $1320 – $1340 and held. What is important from a technical analysis perspective is that the volume completely dried up as price worked its way back into that critical support zone noted on the 4 hour price chart.
Bears were hoping to be able to recruit a wave of fresh converts to their side and give them the firepower to pressure the market down through this level, thereby touching off another wave of sell stops and setting up a fresh new leg lower in price. Obviously, there appears to have not been a large contingent of traders interested in selling gold aggressively down at these levels right now. That gave some would-be longs the excuse they were looking for to re-enter the market plus stirred some mild, but not aggressive short covering on the part of the bears. However that all changed rather abruptly!
As you can see on the following two minute chart below, after the initial fireworks that occurred in early Asian trading last evening, volume died off in the Comex gold futures and continued to remain lackluster until around 11:00 AM CDT. Out of nowhere, the market surged $32 higher in the matter of a mere six minutes on huge volume. Notice that volume leaped to over 10,000 contracts trading hands in one 2 minute interval. That is short covering and some serious short covering at that.
There does not appear to have been any particular catalyst for the move higher other than the fact that the US Dollar was weaker. However, I noticed a couple of things that merit some mention. The first of these is the performance of crude oil. It was lower early in the session but as the stock market continued its one way trip into the outer regions of space, crude reversed those losses and moved higher. At one point is was up over 1% on the day reaching a peak of $97.11 before drifting a bit lower.
Also, the bond market, which was also higher early in the session, lost those gains and began moving lower with interest rates moving up correspondingly. I am very hesitant to say this, but maybe, just maybe, we are watching some incipient signs of a shift towards inflation on the part of some larger traders. Honorable mention must go to copper which also refuses to break down. Strength in copper is generally beneficial towards silver….