Unrest in Egypt Fueling Rally in Gold
Unrest in Egypt putting the fear factor back into the gold trade—at least for today.
Ashraf Laidi, CMC Markets says today’s gold rally is “safe haven buying” and can also be seen in U.S. treasuries and oil. “Intensifying violence in Egypt” has “implications for MidEast policy & oil flow,” he says
Volume in April gold futures contract was about 35 to 40 percent above normal today, trading well over 200-thousand contracts.
According to traders, short covering by speculators is fueling more buying by computer-driven models that track order flow and momentum. “The market is definitely short in gold—you are definitely running some of the shorts out of the market today,” says Kevin Grady gold trader with MF Global. And that short-covering demand is fueling more buying by algorithmic systems that are programmed to look for volatility in the markets. “There is so much panic, the moves are not $5 or $10 moves but $30 or $40 moves,” says Kevin. » Read more