Tuesday, July 12, 2011

Wednesday Commodity Round-Up

In uncertain times, gold benefits -- which is exactly what has happened the last week.

The five minute charts shows prices moving up strongly, gapping higher at the open several times and maintaining upward momentum throughout the last week.

Prices have advanced through key resistance areas and are now ready to move too record highs.

We've had a short term bullish crossover as the 10 day EMA has moved over the 20. The A/D line shows new money has been flowing into the market, although the CMF shows the move has been a bit weak. Momentum declined as prices consolidated, but the MACD has now given a buy signal.

Prices have spent the last few months consolidating in a sideways pattern. Now they stand to move higher.

Two events move gold higher: inflation and uncertainty. Inflationary pressures are diminishing as commodities move lower in price. That leaves uncertainty as the primary driver of the gold trade.