What is Euro Gold telling us?

Gold priced in terms of the Euro continues to be most impressive on the chart as it creeps ever closer to its all time high. This move upwards is a visual telegraph that there remains deep-seated concerns over the European sovereign debt situation, especially on the Continent itself, in spite of the recent euphoria over “free money” for the next two years.

While the Fed has given the markets, and in particular, the wild-eyed hedge fund community, the green light to buy “risk assets”, there is an underlying current of palpable worry which remains in our global markets. Short-term oriented players are betting that they are faster than the next guy and can exit any risk trades if something goes wrong. Longer term players are more cautious but also do not want to be sitting on the sidelines missing potential profits. Expect some wild swings in price even on an intraday basis as we move forward. “Conviction” is not something that we will see much of.

Author: Trader Dan, specialized in commodities like gold & silver

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