So Much For Strong Resistance At $1200

In an earlier post, I gave a thumbnail motivational description behind the technical analysts' term "resistance." As it turns out, there was little at US$1200: after spending a fair part of yesterday just below it, gold went though it last night with little trouble. As I write this post, spot gold's at $1209.80.

This Globe and Mail report by Jan Harvey points out that gold has also set price records in euros and British pounds. One interesting fact embedded therein: "In the physical market, the flow of scrap gold re-entering the Indian market – which usually increases when prices rise – tailed off as sellers sought higher prices, dealers said."

In other words, Indian sellers aren't coming out of the woods anymore: they're staying with what they got. When potential suppliers hold off supplying because they themselves think the price is going up, a jump in demand can give a real kick to the price.

I haven't read any report of seller reluctance in North America. Those cash-for-gold ads are still running; from what I've read, people in this continent are still sending in their gold. Once sign of a real bubble in progress would be a scale-back in those ads, as people hold on to what they've got, combined with a proliferation of ads from gold sellers.


Reuters has provided a timeline of gold prices here, which covers the entire bull run up to now.


Update: Adam Brochert, a gold bull, has assembed charts of gold in several currencies. They show break-outs in almost all major currencies. His article's over at the Market Oracle.

As I write this update, spot gold's at $1213.50


Update 2: Gold bull Jim Rogers has an answer for why gold's rallying in all major world currencies: deficits.