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Dan Norcini continues:


“Most of the commodity markets are either lower today or not particularly strong.  So you are seeing selling coming in today and you have a little bit of hesitation on the part of traders to plow additional money into the commodity sector right now.  This has given traders a reason to book some profits and they are basically saying, ‘Ok, I’m going to go ahead and bank some of this money right now.’


Traders are waiting for any additional news that would confirm the idea that we are going to have enough liquidity to override any concerns regarding sovereign debt related slowdown issues.  I think Chairman Bernanke’s comments yesterday were very significant....


Continue reading the Dan Norcini interview below...  




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“What people need to take away from Chairman Bernanke’s statements is there is such a stark contrast between his guarded comments regarding the state of the US economy and the spin we saw in the financial press, here in the US on Friday after the payroll numbers were released.


That report had everyone talking about the US economy improving and expecting higher employment in the future.  Chairman Bernanke’s comments threw water on that.  What his comments basically did was confirm for people, who were suspicious of the payroll report, that yes, your suspicions, your concerns about that report were well founded. 


Also, based on the data the Fed is examining, the US economy is going to require this very low interest rate environment well into the future.  That’s an environment in which there is little to zero opportunity cost in holding gold as an asset.  Gold thrives in a situation where real interest rates are negative and that’s basically what the Fed is signaling.  That’s why you have such a firm bid in the gold market.


With this backdrop, gold will continue to attract buying support on the dips.  Right now gold needs a bit of a kick to get it through the resistance level at $1,750, but keep in mind Chairman Bernanke is telling us the environment going forward is going to be gold friendly and dollar negative in the long-run.


Once the focus shifts away from Europe and back onto the US economy and the US dollar, that will engender selling in the dollar which, of course, is bullish for gold and also bullish for silver.”


© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.


Eric King

KingWorldNews.com

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