GOLD UPDATE

Yesterday I updated Silver and some newer theories I'm toying with, but if anything seems to be clear (as it was before and again this morning)  it is that inflationary data seems to be driving precious metals which are starting to act like they use to before the F_E_D intervention, which is to say, move opposite the $USD.

I still have concerns about an all out asset class sell-off as the catalyst for stocks would be the same that would potentially hedge back inflation, therefore precious metals, but there's a very large base to be unwound if that's the case and it can't be done this quickly (year or so long base).

As for this morning, if you want to see what leaked data or smart money making a decent bet looks like (which if not leaked was certainly based on the inflationary trend that Yellen calls "noise"), look at gold futures below.

As mentioned earlier, just about 10 minutes before the CPI data was released this morning there was a dump of nearly $400 mn notional in gold futures, at "B" CPI was released and gold jumped 12 points to $1316, a nice pay day if you facilitated and then accumulated the pre-CPI dump.

 It looks like that's exactly what happened, gold futures were accumulated in to the pre-CPI dump and rode 12 points higher and then distributed for a quick morning trade.

 Here Gold futures are moving inversely against the $USDX as is their normal correlation that we haven't seen while the Bernanke put has been in place.

As for GLD itself, it looks like it will be coming down, there was a clear negative divegrence in to yesterday afternoon so this morning's action isn't too much of a surprise.

The 5 min chart shows a larger negative divegrence along the lines of a pullback divergence and a flag in GLD, the bottom of the flag is what I'm interested in now to see whether Gold is accumulated there or not.

The larger 30 min chart is similar to what we saw in Silver yesterday so one of the primary questions I'm looking to answer is whether the initial GDX base and higher trend we expected is still on track or whether the cure for inflation (rate hikes) will see an across the board asset class sell-off in both equities and the PMs.