The overnight session was active for gold. The GCZ20, December futures contract traded between a high of 1,917.90, and a low of 1881.80, a 36-point range, nearly 2%.
Gold is now off the lows and testing its overnight highs.
From a regular session standpoint, we’ll be watching the 179.43, GLD level covered in the last update.
If that high is penetrated it does not mean that gold will continue on higher immediately.
It would mean that probability is now about even to greater, higher prices are ahead.
From the Junior Mining index, the GDXJ standpoint, there’s a Fibonacci level located at approximately 56.80.
Looking at the big picture, the short squeeze in bonds looks like it’s getting underway in earnest.
There was just one more downward thrust that was not able to penetrate the TLT, 156.75 lows from the week of October 19th.
The overnight move higher in bonds was a serious hit to the shorts. It’s now time to see if this move feeds on itself … higher.
These dynamics, the dollar, gold, interest rates, the four-standard-deviation-short in bonds are all operating simultaneously.
We’re sitting in the background and quietly observing everything.
The choice at this point (not advice, not a recommendation) is to sneak into a significant short position on the Junior Miner index, GDXJ (via JDST).
We’ll see how it works out. Obviously GLD and the 179.43 high, is being watched closely.