The Battle To Control The Trend Is Fierce

Weakness disguised as strength in the labor market had very little to do with gold’s trading on Friday. A surge in shorts by connected money foreshadowed weakness well before the labor report.

Gold London P.M Fixed and the Commercial Traders COT Futures and Options ZScore Weighted Average of Long & Short As A % of Open Interest


While the public is (re)directed towards meaningless short-term economic noise (i.e. better than expected labor report), they miss what likely be an important technical juncture of the secular advance in gold. The battle to maintain the linear trading channel is fierce. Smart money knows that the computer buying will be difficult to control (dilute with paper supply) once the upper channel is broken. The following chart illustrates the “closeness” of this outcome:

Gold, London P.M. Fixed (Gold) and Z Scores from Primary Trend:


When the parabolic train leaves the station, it will do so with the least amount of passengers as possible.

Silver broke the linear trend first. Gold will follow silver's lead.

Silver, London P.M. Fixed (Silver) and Z Scores from Primary Trend:


Headline: Gold falls after strong jobs report

After ending the first quarter at a new high, gold prices took a hit Friday as investors opted for stocks after a strong reading on U.S. jobs in March.

Gold for June delivery fell $11 to $1,428.90 an ounce at the Comex division of the New York Mercantile Exchange. Gold traded as high as $1,437.80 and as low as $1,413.50 while the spot gold price was losing $4.40, according to Kitco's gold index.

Source: http://money.msn.com/market-news/post.aspx?post=90ed2844-f350-4d85-aa28-95cd990312ed