Regarding gold, of course it is strong: War is in the air and when war is in the air gold goes bid. What else can gold do? Capital is fleeing to the safe corners of the world, and when that happens it flees to gold. So we begin our discussion this morning noting this simple fact.
We note secondly that this shall be an important day for gold and for gold's future, for whoever or whatever has been the seller of gold on Fridays in recent days, weeks, and months cannot allow gold to trade upward through $1,325 and certainly it cannot allow gold to trade upward through $1,350 for that would send an inflationary fright through all other markets in all other places.
Hence -- and let's call this group The Force -- The Force will have to work very hard today to defend its authority. The question shall be: Will it?
The Force has already lost one very important battle: it has lost the battle at E975/oz., with gold trading now at or near E982 and with the truly psychologically and technically important E1,000/oz. level only just a bit ahead.
Once E1,000 is taken out -- and we think that it shall be, if not today, then next week if the geopolitical events unwind as badly as we fear they might -- then there is nothing that stems the advance until E1,100, noting that the peak for gold in euro terms was E1,350 back in late 2012.