$Gold Daily

Following the ECB announcement, gold prices jumped, but it was business as usual the day after. Bearish appraisals continue, with no real respect for apparent technicals, but empty and ad hoc technical lines drawn in the sand.

The technicals are unequivocal here, showing that this is not a co-ordinated bottom, as it was last year, which was a technical and price bottom.

More likely that we are just at the end of a (ii) down wave, part of a (3) upwave. You have to dial back the chart to see why, though the weekly chart will give the best overall view.

http://scharts.co/TmzBxf

Euro Area Yield Curve

Why the ECB resorted to negative rates would have to be because their short term yield curve is within a hair of deflation. Nobody really takes a look at it, but U.S. Treasury Bill rates are within the same ballpark.

There is no stronger fundamental for cash on hand or bullion than negative rates.

Very likely this will cause a re-appraisal of profitable short selling strategies which now hold much more risk than the day before the ECB announcement of negative deposit rates.

Allow the yield curve data to load, it may take a minute. Run the cursor over the short end of the curve to see where interest rates are at for the Eurozone:

http://scharts.co/TmzBxf

via INO.com - Jun2014/Dec2019 Spread

This spread trade, which you can probably roll over as the months advance, has the least risk profile in gold futures, rather than just shorting, or shorting the near futures and buying the long end.

You would be buying the short end of the curve and selling the long end. There is a very long upside in terms of leveraged trades, since 120 points, or more of headroom is available.

There has been discussion of how gold prices are in backwardation, but the real test of backwardation in gold prices would be the spot price is higher than the furthest futures contract, as had occurred in crude and copper.

http://quotes.ino.com/charting/index.html?s=NYMEX_GC.M14_Z19.E&v=d12&t=l&a=0&w=1

via TMXMoney - Delayed Market Depth By Summary

My guess is that $10k will buy you a strong position compared to the outstanding float. There were times when ~1m. shares were available on offer, but traders need to employ the cash you bring to market.

My guess is that short positions in GBN.V have probably not diminished, given the persistent sell-offs and huge bid under the market. The last time it was available, Bloomberg quoted a ~-70% number, which corresponded with all of the publicly available float.

Delayed Market Depth

- F6