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James E. Sinclair,
Chairman & CEO,
Tanzanian Royalty Exploration Corporation |
| | December 26, 2002
Gold/Major Cross Currents Indicate Gold to Chop on the High Side Before Taking Out $354.50 & $373.00 & $400.00
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| | VIP Technical Review
December 26th, 2002
There is no question that gold on the Daily technical picture is both extended and has moved from positive to neutral. Normally that would have resulted in an immediately rain of gold on the Comex beyond demand and a downward reaction in the price. However this time there is a difference that can be easily understood.
That difference is in the US dollar as measured by the USDX. Firstly, the dollar has now concluded its second day under the key 104 level so fiercely fought for maintenance of by the Exchange Stabilization Fund (Uncle Sam Inc.). It is not only the fact of a confirmation of the 104 breakdown by a second session below the 104 key level that is so telling. It is more so the lack of a significant presence today able to wrong the right by taking the dollar back above the key 104 level as measured by the USDX. By that I mean the Exchange Stabilization Fund did not succeed in putting Humpty Dumpty Dollar together again. They have not succeeded because it is clear the next defense level is 100 on the USDX.
In light of this the weekly gold chart and the month gold chart have no diminishment of their Might Joe Young muscular look of strength. The Bull Market in gold medium and long term remain all out, a go situation.
Conclusion: Gold had eight days from it Asian quote at $354.50 bid to $355 offered in which a reaction should have occurred below the low point set on the next US Comex trading day. Rather buying came in on the Comex itself (Comex = "Manipulation or Stabilization Central" according to your perspective) at just above the $340 level, which I understand was demand from the Gold Cartel members. I can only assume having seen gold at the arithmetical level of $354.50 may have been enough pain for some Commercial participants. I wonder if the Position of Traders devotees will admit now that Commercial Interest just like private interest can be dead wrong from time to time? The commercial interests are the buyers then and today closing out by offsetting whatever degree of risk they can.
I believe that a move above $354.50 will give us a definite $372.00 but in truth clearly a close above $400. Gold appears to me to offer a last opportunity for entrance on this chopping action in the high-end level of the recent rise before it moves smartly towards the $400 level.
Because of this I issued December 25th, 2002 a Special Christmas to New Years Heads up for the share traders. Personally, I have no doubt whatsoever that gold is going to better $354.50 and $400. -
What have you done for gold? Consider taking physical delivery of one Comex gold future contract or purchasing some newly minted one-ounce bullion gold coins. Then you have done something for gold and have a right to expect gold to do something in turn for you.
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| | You can view the Previous Chairman's Corner item: Fri Dec 27, 2002, Heads Up: "Expect the Unexpected"
You can view the Next Chairman's Corner item: Mon Dec 23, 2002, The Gold Cover Clause/The Deflation Solution
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