Spot gold surged this morning in reaction to Bernanke's speech, which was and is being "translated" as an overture to keep rates very low and Fed policy very accommodative for the forseeable future. In other words, to "create" the environment that will be most conducive to fostering job creation.

Be that as it may, traders and investors interpreted Bernake's remarks as supportive for current easy money policy, but also as a primer designed to help the markets manage their expectations about the future of current policy.

Spot gold did not waste a moment before it took off to the upside to begin to discount more easy money, perhaps inflationary expectations, and most importantly, the unintended consequences of Bernanke's policies. This morning's thrust points spot gold directly at a confrontation with its next key near term resistance zone at $1692 to $1700, which if (when?) hurdled should trigger a "panic-type" surge that should propel prices to revisit the 2/29 high at $1791.16.

Only a sudden reversal and decline that breaks and sustains beneath $1659.20 will compromise my current bullish outlook for gold and the SPDR Gold Shares (GLD).

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

© 2002-2012 MPTrader.com, an AdviceTrade publication. All rights reserved. Any publication, distribution, retransmission or reproduction of information or data contained on this Web site without written consent from MPTrader is prohibited. See our disclaimer.

Mike Paulenoff Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.