The big story is once again the collapse in the Euro – it actually registered some prints BELOW the worst levels seen back in late 2008 at the height of the credit crisis inception here in the US. It looks to me like the only ones seeing “Shock and Awe” are the European monetary authorities who today look like total buffoons after all their grandiose comments that were uttered when they first announced that they would defend the Euro at all costs. The phrase, “at all costs,” is going to be taken literally. What are they going to try next, direct intervention in the Forex markets? That ought to be good for at least a one day pop before the sellers smash it lower again as it would rightly be seen as an act of desperation.

The result of this – Euro priced gold missed the magical €1,000 mark at today’s PM fix by less than 2 euros as it made a brand new all time high again. That did not seem to deter the bullion banks and the official sector from doing their worst to window dress the price of gold at the Comex. Yep – we get it – the Euro is falling apart, the Pound is under severe pressure, even the Australian Dollar is getting whacked, and that means that we should all sell gold. Nice try boys – the days of rigging the gold price are coming to an end because to believe that gold would be lower under such circumstances if left to trading on its own merits requires one to also believe in the Tooth Fairy.

Open interest fell rather sharply last Friday on the spike towards $1250 which looks to me like it was a case of both shorts getting spooked and running while some of the shorter-term oriented trading crowd booked profits on the second approach towards that level which failed to penetrate it. I also suspect that some of spreader positions were reduced and that caused more of the drop than the former.

It is evident from the price charts that the price rise is being resisted above $1240 by the usual suspects. Bulls need to push through this area and hold price above it to kick off another leg higher. Support beneath the market is rising and is now coming in initially near the $1215 level. I am watching to see whether the market bull flags here which is a short term consolidation pattern before a market moves higher. We will know if that is the case based on the price action the next few days and whether or not it holds near the $1215 level on any dips lower. I would not mind seeing such a pattern forming for it would indicate that while the selling cap is in place, buyers see value just below the market. Based on the longer term charts, the market is in a bullish posture so the advantage to such a pattern is that the odds would favor the resumption of the uptrend once price closes strongly above $1242 – $1245. We will have to wait and see.

The HUI is once again of no help to gold whatsoever as it appears that the hedgies, after unwinding a good portion of those infernal ratio trades, are back at it again. The index has touched its rising 10 day moving average which so far is holding but it will need to stay above this level to keep from seeing further weakness in price. A push through along with a close above 487 would signify that bulls are going to take the shares higher. A close below 460 would cede short term advantage to the bears.

I find it ironic that on a day in which the equity markets are falling hard and the currency world is in turmoil, that the bond market seems to be having trouble moving higher. They are acting as if reluctant to extend much to the upside right now. I am not sure what this means but it is most strange market action. Maybe some bond bulls are getting concerned about all this unease in the Forex markets and the proliferation of what now seems to be quadrillions in debt issuance. Let’s keep a close eye on the price action there to see what the next move will be. Rising bond yields at the same time stocks are dropping off would signify a return to stagflation.

The Dollar put in another yearly high today as it still looks on course to make a run towards the 89 level on the technical price charts. It does look as if it might be taking a rest here however based on the way it is currently acting, namely, the fall off in price from today’s session peak. Of course, the day is yet young and it could recover closer to the session high later today but for now that is what I am seeing as I prepare these comments.

Crude oil is getting hit quite hard today and has fallen below the psychological support level of $70. This has been the area in price which has served as the bottom end of its price range for the entirety of 2010, so if it cannot soon recapture the $70 level and move away from it, it has the potential to drop as low as $65 on the charts before another layer of support might emerge.

The S&P has now fallen in the last three sessions after having moved back to the level at which it was trading prior to the big collapse last two week ago. The price action indicates a lack of trust by investors in the overall health of the market. We now have a range forming with the price prior to the collapse serving as the top side (let’s call that 1170) and the spike low (1056) made the next day serving as the bottom. A breakout in either direction on good volume will now serve to reveal which way the next move is going to be in the equity world.”- Dan Norcini, More at http://www.goldseek.com/email/lt/t_go.php?i=2455&e=MzM0MTg=&l=-http--www.jsmineset.com/">JSMineset.com