Wednesday, May 9, 2012

Market Nuggets: Mitsubishi: Gold Hit By 'Another One Of Those Tsunamis Of Selling'

Tuesday May 08, 2012 2:45 PM
Gold’s weakness was exacerbated by “another one of those tsunamis of selling,” says John Howlett, division vice president with Mitsubishi International. “Supposedly upwards of 14,000 lots of gold were sold in the 5 minutes from 8:20 to 8:25--the old open-outcry opening time,” he says. “After the 7,500 that went on April 30, it may be safe to say that somebody’s system is telling them to abandon ship. And that somebody has some substantial volume to chuck around.” He cites two technically bearish items for gold: “the market is significantly through and closing belowthe 300-day moving average for the first break since 2008 and the market is also ‘under the cloud’ on the ichi moku chart for the first time since Q1 2009. The caveat on the second item is that it’s best on a weekly chart and it’s only Tuesday.” Meanwhile, a trendline back to November 2008 puts support in the area from $1,595 to $1,605, he adds. As of 2:10 p.m. EDT, Comex June gold was $34.40, or 2.1%, lower at $1,604.70 an ounce.

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