Whoa! Both Gold and Silver initially traded lower when the electronic trade opened Tuesday night. At 0840 central time, indescribable buying power came into the metals and rallied Gold to the biggest single day rally in history. Gold finished the day session $70 higher at $850.50 and is currently trading in the extended e-trade near $870, an outrageous $90 higher on the session. Silver closed the day $1.15 higher and is currently $1.50 higher. Allendale will look to stand aside on metals for the remainder of the week as the financial crisis plays its way out.
On a side note - The Gold/Silver ratio is currently around 72:1. This ratio moved in Silvers favor today and could continue to do so once industrial metals begin to perform better. Historically this spread has not gotten much wider than 80:1. Keep your eyes open as we may look to Buy Silver and Sell Gold as a spread trade in the near future.
Technical Commentary: Support in December Gold is now seen at $850 and again just above $825. Resistance is found near $874 and again at $895.
Crude oil finished Wednesday up $6.01 at $97.16. The markets found strength Wednesday from the timely bailout of AIG with an $85 Billion injection of taxpayer money. This soothed investor concerns that an AIG failure would send big ripples through commodity markets, as AIG would be forced to unwind positions. That fear has subsided, at least for today. Wednesday is the first day in nine sessions that Crude Oil did not make a new low for the move. Allendale will recommend standing aside in the energy markets for the remainder of the week, as these markets are still extremely volatile.
Technical Commentary: Support in October Crude Oil is now seen at $94.75,
$92, and last ditch support is the low for the move at $90.50. Resistance is now $97.50 and $100.00.
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