Gold's Record Monthly Close: Technically Significant

Gold: Gold is down slightly this morning but still continuing to knock on the door and consolidating near the psychological $1,000/oz mark. The gold market will probably be relatively quiet until the release of US non- farm payroll data this afternoon. Depending on the figures, which are expected to be quite poor, an aversion to risk should further bolster gold's appeal. Gold's record monthly close (COMEX close at $1,008/oz) was significant from a technical perspective and will embolden the bulls again. It is the highest monthly close in history in US dollar terms (the monthly close in January 1980 was only $668/oz - London PM Fix).

Federal Reserve chairman, Ben Bernanke's comments regarding the risks posed by China and Russia's proposal for a new global super currency may weigh on the dollar. He said that "it would weaken the dollar, and we would have to watch for any inflationary consequences of that." Meanwhile, European Central Bank head, Jean Claude Trichet warned that large currency fluctuations could derail economic revival. He warned that "excessive volatility" and "disorderly movement in exchange rates" would have "adverse implications for economic and financial stability."

Silver: Silver is currently trading at $16.29/oz.

Platinum group metals: Platinum is currently $1,275, palladium is $289/oz and rhodium is $1,575/$1,675/oz.

Disclosure: no positions

Comments

[Boot:]

I have to admit I am getting used to seeing gold spot hovering around 1K now. Should be interesting going forward with the reserve currency bring questioned by Russia and China. Thanks for the article. Nice web site by the way. Boot

Oct 02 07:01 AM

[Hmm?!:]

" Meanwhile, European Central Bank head, Jean Claude Trichet warned that large currency fluctuations could derail economic revival. He warned that "excessive volatility" and "disorderly movement in exchange rates" would have "adverse implications for economic and financial stability."

I don't think so.....excessive volatility is the result of fundamental issues. The reason this comment irks me.....is that it plants the seed for blaming currency traders later on. It shifts focus away from the root cause......... all the various government entities that routinely falied to do their jobs for quite some time.

Oct 02 12:40 PM

[Laurence Hunt:]

$1000 gold in late 2009 is a very different phenomenon than $1000 gold in early 2008. We now have room to move to $1300 in the uptrend channel. I never know if a move will be sooner or later, but there is no reason here why it couldn't be sooner.... We're still somewhat overbought short-term, but there is no shortage of bearish sentiment - and obliviousness. These are certainly the makings of a bull market, and $1000 is now looking more like a floor than a ceiling to me....

Oct 03 02:15 AM

[yellowhoard:]

I'm in wait and see mode until we either close at a new high on a Friday, or test the 200 day moving average.

Oct 04 09:53 AM