Gold Continues to Attract Buying at the Bottom of its Trading Range

Gold has once again attracted strong buying down near the bottom of its broad 8 month trading range and has now bounced higher for the day. Strength in the yellow metal has pulled silver up a tad which was sinking under the weight of a collapsing copper market.

While some are ready to pronounce gold DEAD as a safe haven asset, the chart picture denotes otherwise, especially given the broad weakness in the commodity sector as a whole and the rallying Dollar, which continues its technical march towards the 84 level on the USDX. Whenever I see gold moving higher alongside Treasuries and the Dollar, it tells me that all such talk about gold being useless as a store of wealth, is simply false. The chart will tell you more than all the pontifications of the short-sighted analysts and pundits.

To get any sort of excitement going beyond the continued value based buying of gold, it will need to push through the $1600 level and not falter.

The mining shares are defying the general trend of equity selling today which is aiding the cause of both metals. Note that for the last two weeks, it is the mining sector which has been the bright spot in the otherwise dim US stock market.

 

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