-- Posted Wednesday, 26 November 2008 | Digg This Article | Source: GoldSeek.com
For years now, the Thanksgiving holiday in the U.S. has been a very favorable two-day period for the gold price as shown below - this year is not likely to be an exception.
While anything could happen later this week, a number of conditions have developed that would favor a higher gold price by the weekend, perhaps much higher.
First, due to the closure of the Comex in New York on Thursday and light trading on both Wednesday and Friday, there will be less selling than usual coming from New York bullion banks - this has probably played a big role in the steady gains over this two-day period in recent years as shown above.
Second, the gold price has surged recently, up almost a hundred dollars an ounce in just the last week, and this has undoubtedly caught the fancy of "momentum traders" around the world who may now set out to push the price higher.
[Note: If you go back to the day or two before Thanksgiving last year, you'll see that the price of gold has actually risen since then - from about $795 last year to about $815 as this is written for a modest 3 percent gain. Are there any other assets (aside from the U.S. dollar) that sport a year-over-year gain today?]
Lastly, there are those shrinking short positions for both gold and silver and the unknown number of holders of December futures contracts who, on Friday, will announce their desire to take delivery of the metal next month rather than having the contracts settled in cash.
Over the last eight years, the biggest moves have come on Friday, so try not to go into the day with too big of a Turkey-hangover.
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