Tuesday April 08, 2014 08:29
As mentioned often over the past few weeks, the Ukraine unrest, although not always brimming, will continue to create bids when tensions escalate. Gold held its 200-day moving average yesterday, as the equity weakness continued to parlay capital allocations away from the stock market. After the close, the networks carried scenes of violence and massive demonstrations in Eastern Ukraine, which added to the momentum in prices on the safe-haven trade. I am again not seeing capital flight away from the Euro, but it is a dynamic worth watching to determine a possible escalation of Russian intervention within Ukraine. The jerky movements in gold are indicative of light volume and conviction. Traders are reacting to headlines, not positioning against a trend signal. The rise overnight, has again given gold a more positive technical look but as we have seen, this can change in a heartbeat.
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