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December 20, 2005

Fast market alert on gold, Tues., Dec. 20, 2005, 12:48 PM

Shortly after 10:00am ET today, the spot gold price collapsed. It has now fallen well below the $500 mark.

My initial response was that this is a shake-out of the weak hands before going much higher. I had been awaiting a test of the support level, but I did not expect this extreme weakness. I suppose the "Gold" man needs some breathing room. I'll have to investigate.

Interesting timing on this MarketWatch article: "Gold futures climb as much as $3 Analyst sees prices continuing climb - MarketWatch, Dec 20, 2005 10:05" That was the time the market crashed. Why can't I access the MarketWatch story now?

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I see that the USD is on a rocket today. The Trade-weighted USD is up about +1.1 pct on the day. Could this be entirely due to PPI data? Or, to the inverting Treasury yield curve?

Posted by Posted by Bill Cara on December 20, 2005 12:48:16 PM | Category: Bullion

Discourse

I am suprised you haven't noticed that selling both yesterday and today started at the same time-11.00A.M..
That is when London market closes for the day.Yesterday's selling wasn't as successful as today's. Buyers are gonna show up when the Asian markets open.This is a very consistent pattern and Comex traders continue to get away with it.

Posted by: Marp [TypeKey Profile Page] at December 20, 2005 2:21 PM [link]

Ditto Marp, A very consistent pattern that is clearly not trying to get the best sale prices. The pit locals jump on board and help out the shorts. It's been easy money for so long, one day they will be carried out of the pits by their clearing house risk managers. It can't happen soon enough for me.

BTW, I must of commented a dozen times (too much for some people, I am sure), that when the uptrend line breaks to the downside, watch out. This is a very consistent pattern also, so if you are remorseful now, please don't forget to watch your trendlines in the future and stick to your trading plan. KISS.

Posted by: g034 [TypeKey Profile Page] at December 20, 2005 2:32 PM [link]

I forgot to mention, watch the new downtrend lines for entry points. It works both ways.

Posted by: g034 [TypeKey Profile Page] at December 20, 2005 2:34 PM [link]

Marp-
Yes, chart pattern has been the same for 3 days straight. Could set your watch by it. Sellers finally got the upper hand today. Yes, there will be buying by Asia-- at much lower prices. But half of the potential buyers will be wondering if the bull is over and should they get back in, half will believe they are getting a bargainso now is the time. So I would not be surprised if volume is not there and that the table is set for the Bears to push this well past support as they seem inclined to do.

Posted by: MarkM [TypeKey Profile Page] at December 20, 2005 2:34 PM [link]

g034-

I have mine clearly marked but am still not expecting it until January. If it comes quicker than that I am going to be VERY cautious with it. I would likely scale in more slowly if this thing totally collapses here. No remorse after seeing THIS chart. I felt wimpy to get out before the top like I did but when things go vertical there is way too much risk for me to sleep at night. A man's gotta know his limitations.

Posted by: MarkM [TypeKey Profile Page] at December 20, 2005 2:42 PM [link]