Which is why I occasionally post the 3 month chart. See chart below this MW article - in which you should note the demand and bank situation described in bold...
Haven't sold a share of AURC.
Gold futures end with a gain of almost $10 Last Update: 4:20 PM ET Sep 18, 2006
SAN FRANCISCO (MarketWatch) -- Gold futures climbed nearly $10 an ounce Monday to close at their strongest level in three sessions as traders with an upbeat outlook on the precious metal took advantage of last week's losses to buy back into the market at lower prices. "Gold is bouncing thanks to a deeply oversold condition," said Peter Grandich, editor of the Grandich Letter. "The difference now is traders are looking to sell rallies versus buy dips," he said, adding that "gold will need to close above $610 to confirm the recent big slide was indeed just a correction."
For now, gold seems to be keeping "a keen eye on the hoped-for return of the life preserver it most needs at this time -- the physical buyers from key traditional consuming nations in Asia," said Jon Nadler, an investment products analyst at bullion dealers Kitco.com.
"Although we remain convinced that such demand will once again be a part of the balance in the gold market, the proverbial jury is very much 'out' on just what price level will satisfy the value-conscious jewelry crowd," he said.
Gold for December delivery closed up $9.80 at $592.80 an ounce on the New York Mercantile Exchange, its highest closing level in three sessions. Earlier, the contract touched a high of $594.40 following a loss of nearly 6% last week.
"The odds of a consolidation above $575 have increased with the bounce off last Friday's lows," said Nell Sloane, analyst at NSFutures.com, in daily commentary.
However, "to shut off the selling pattern over a series of days will require a persistently lower dollar or a persistently higher equity market," she said. "Without some strong wave of Indian buying, news of resurgent Chinese activity or some other major fundamental revival, we doubt that December gold will be able to rise above significant overhead resistance up at $600," she said. Nadler recommended that traders exhibit "patience and calm," since "the coming weeks will tell where such market-shaping factors intersect."
Meanwhile, a fall in homebuilder confidence to a 15-year low likely helped gold's climb Monday, he said. See Economic Report. "Most of the signs in the U.S. economy now point to a deepening stagflation scenario," said Nadler.
That could be bad for gold, in terms of luxury spending on jewelry, but it can be good as well, if the dollar crumbles, he said.
Gold sales deadline looms Likely adding more support for prices is market speculation over the potential for a rise in European central bank gold sales, ahead of a deadline next week. "With next week's deadline for the European central banks to complete their 2006 gold sales and lending, gold's volatility could amplify in the coming days due to uncertainty over what the 15 banks will do," portfolio managers at U.S. Global Investors wrote in a weekly newsletter issued Monday. The latest estimates indicate that the banks have sold less than 350 metric tons of their 500 metric-ton quota for the year ending Sept. 27, 2006, they said. "Contrary to some opinion, the central banks are not heavy sellers of gold at the moment, nor have they been," said Julian Phillips, an analyst at GoldForecaster.com. "Demand is rising strongly for physical gold now, from the East and from the West," he said, adding that lower prices will "incite this demand too." "There has been no change in the gold and silver tide, which is still flowing," he said. "The question is, is this a remarkable opportunity or is there a bit further down to go?" Trading in the U.S. dollar provided little hint of a direction for gold, with the greenback strengthening against the Japanese yen but weakening against the euro. See Currencies.
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