Gold is a Volatile but Safe Commodity

All the volatility in the gold market doesn't leave much time for commentary due to all the trading activity! Gold follows the US equity markets higher as does the euro which sparks further short covering the Comex. It can be very difficult to make any future calls thanks to ongoing liquidation concerns and deleveraging, but it can be safely said that when the US equity market bottoms, gold will move higher. And if cookies are getting dumped, so is everything else including gold although to a certain extent it has separated itself from the rest of the commodity complex and is holding relatively well compared to that sector. Grains are all higher which is a positive sign for the entire commodity complex. Watching that sector clearly gives the impression that when the grains bottom, gold and the rest of the sector will follow.

Fundamentals are still good for both gold and silver, as well as the rest of the commodity sector. Rallies in other currencies in the face of modern day economic events are simply being jawboned her by world financial leaders but have no fundamental basis for rising in price. This is the main reason and motivation for owning gold and silver; they are an insurance policy, and the only reliable currency in a post OTC derivatives world. The US dollar will receive many short-term rallies but these are merely bear rallies in the middle of a crucial break down for the currency itself, which can be seen in comparison to other currencies of the world, including and especially the Japanese yen, which is not declining in value. The United States is fast approaching the same situation which Japan faced in the early 1990s with no obvious solution.

Technically the price action is constructive and gold as the market is attempting from a technical bottom after Friday's huge range in which prices rocketed off of the momentous levels. The next step is to determine if it can hold above these levels for at least one full day. Once it's able to do this, technical traders will take that as a huge signal of a short-term bottom. These markets are very volatile and not for the amateur gold trader. Trading gold and silver in the past few years has become an utterly and completely complex science which is not kind to the average gold investor, or anyone who does not trade professionally.