Tronlink Wallet Airdrop: GOLD TREND March 12

March 16

04.00 P.M GMT

WITH LONDON having done the job of pull down today---the COMEX will be looking at 1655-1659 as first resistance of the day and then followed by 1665-1673.

Support for New York looks to be 1641-1643.

India's proposed budget calls for the import tax duty on gold to double, from 2% to 4%, on standard gold and from 5% to 10% on non-standard gold. Although downplayed by some in the industry, this should have a dampening effect on gold demand, as Indian jewlry demand is significant. India imported 993.4 metric tonnes in 2011, of which more than 500 million went towards jewlry production.

China has recently outpaced India in gold demand for jewlry. (NOTE-- We're spelling Jewlry WRONG because it is a major spam word --- and filters in your email could block this update -- so we miss-spelled in on purpose)

The big story for gold still seems to be that US Fed does not appear to be inclined to implement another round of quantitative easing, thus undermining a major argument for buying precious metals. Every bit of positive US economic data supports this case, as does the strengthening dollar.

Longer term, inflationary concerns are still out there, especially considering how much liquidity has been thrown into the market over the past few years.

It appears that the break in gold prices has not dampened ETF gold holdings, which suggests that the long-term bulls are holding steady. But as long as the current optimism about the US economy holds, the equity markets could continue to draw investment away from safe-havens like gold.

US DATA

The CPI number came in at 0.4% for February and 2.9% year over year. US Factory output increased .0.3% for a 1/1% gain. Industrial production was little changed in Feb---but January was revised .from unchanged to up 0.4%

Consumer Sentiment index came in at 74.3----less than the 76 estimate.

Asian equity markets were mixed overnight, except for the Shanghai Index, which was up 1.3% on a arise in property shares that had been hit hard all week over Chinese government attempts to tamp down speculation in that industry. India's stock market was lower on disappointment that the Finance Minister's proposed budget for next year projects a deficit of 5.1% of GDP versus a previous target of 4.6%. European stock markets were flat, but debt rates moved higher. US equity markets are overnight after reaching new highs for the year yesterday. The Dow has been up for seven days in a row and the S&P closed above 1400 for the first time since 2008.

The dollar and crude oil were both slightly higher overnight.

The daily chart shows the two red dotted trend lines---that have been containing price for the last two days. The upper line is where we got our resistance price for last night 1665-1674. Reader David S—a Gann follower gave me 1665 as a key number to watch this week and it’s been a key number. The Green area in the 1644-1654 area is basically neutral territory. Price needs to close above the 1643 area today and really above 1655 in order to at least maintain some neutrality. Any close below 1640 would keep the trend down into Monday. For today, resistance is the 1563-1569 area for the remainder of the day.

The 1655 area is where equality meet today and its possible that gold will trade plus or minus 10 dollars on either side during the session. We were looking for a bounce on Friday to the 1664-1674 area and that price point once again came in early as we hit 1665 going into the London session. About 15 mins into the session price began a hard sell-off that lasted until the 1643 low just before the New York Comex open. Since then, price has bounced back up to the 1650-1655 area.

In summary, the downtrend is still in play but a short term trend change is due next week. We netted $ 38 dollars per ounce in our trade this week and we’ll look for a set-up early next week. The 1637-1655 weekly number for support did hold this week. Any close below 1640 today leaves the downside open for next week. The market will be trying to get above 1655 today and that number will be the focus of today’s trade. The last 6 Friday’s have yielded 5 lower price days, so remain defensive. Overall, price will most likely trade between the two dotted red trend lines again today.

WITH LONDON having done the job of pull down today---the COMEX will be looking at 1655-1659 as first resistance of the day and then followed by 1665-1673. Support for New York looks to be 1641-1643.

04.00 A.M GMT

Friday should have support at 1641-1649 and resistance at 1665-1673

The weight of the evidence points to the odds favoring the downside.

Long Term=Up (major resistance held the uptrend – Need monthly closes above 1767-1804)
Medium Term=NEUTRAL (Major Resistance 1767 Monthly Close)
Intermediate Term=Down---The North American Winter seasonal correction in play.
Short Term=Down – short term cycles in play. Getting close to a bottom
Support and Resistance for Friday
Initial Resistance for 1665-1673 and 2nd tier 1681-1688
Initial Support 1643-1652 and 1605-1612

RECAP

Gold moved higher on Thursday, rebounding from yesterday’s steep sell-off and so far the low of 1635 was within 2 dollars of weekly support (1635-1654) we’ve been watching for. The only significant news we saw was Bloomberg reporting on increased Indian demand and that may have helped push the market higher. The Euro rebound helped as well as a bounce from the big move down in Bonds yesterday. Bonds have really been socked recently and things have been very different since the Yen strength against the dollar reversal we’ve seen recently. US stocks were up again in a market that is getting stranger by the day. Volume has dropped incredibly and all the volatility is gone (for the moment). It’s almost like the trading public is gone and there are only computers left----and they’ve neutralized themselves. While I don’t know the reason for sure, it’s usually not a good sign.
Economic reports continue to flow that shows improvement. Analysts point out the inconsistencies and all the measurements that have been changed but its like mainstream doesn’t care and would just as soon ignore the perils that are everywhere. There is no doubt that the amount of stimulus being thrown at this has the potential to continue longer. This really has been going on since 1980. From 1980 to 1988, the deficit in USA TRIPLED from 1 to 3 trillion dollars. Those where great bull market years and the current recipe is the same---triple the deficit.

Outlook for Friday

The Wednesday low may have been it for this week. Price will try and continue the bounce we favored from Thursday but we think 1665-1673 will be tough resistance. Friday's have ended up with a lot of down days in the past five weeks, so keep that in mind. We'll favor a bounce to that price area. On the downside 1644-1651 should be good support.

What Next?

Going into Friday, the bounce from Thursday should find resistance at 1665-1673 as the most likely point for a high. THE OTHER BIG AREA to watch is the 1684-1688 area, where the FEBRUARY lows reside.
Mid week Wednesday looks to have provided the low for the week. Another consideration is we are now arriving at MID-MONTH and next week is a strong candidate for a price low as far as time is considered. So, we’re getting close. Our supports from last night 1637-1644 held and that should be good support on Friday. The 1654 area is also a very important number on Friday and we might see a lot of action near that price point. Watch 1665-1675 that should be the key price point on the upside.

The weight of the evidence points to the odds favoring the downside.

We got our bounce to the red dotted downtrend line at that turned out to be resistance for the day. Friday’s high should either be at this line or the middle green zone on the chart. We favor the red dotted line as resistance, but it will depend on how strong the market is. The red dotted downtrend line was support on Thursday on the downside. Thus we have the two lines as the area of support and resistance. Short term cycles are getting closer to a price low and the technical statistics are very oversold. If we don’t get a price low here at the 1637 area, then the next potential is going to be 1605-1615.
It’s possible to keep the bounce we favored on Thursday in play on Friday. But the red dotted trend line at 1665-1673 AREA is RESISTANCE FOR FRIDAY.

Support is favored at either 1650-1655 or at 1639-1644. We’ll look for a bounce into Friday – but 1665-1573 is the favored high points.

Gold Daily Price Chart with Gann lines and angles

00.10 A.M GMT
"Overall, the [ Gold Price ] looks rather vulnerable with a likelihood of testing lower levels before it

resumes it upward run,"
It may attempt a test higher again to 1666 after which weakness may set it

to a drift down to below 1640

Supports / Resistances
Res 2   1,683.8500
Ex-High   1,666.5500
Res 1   1,670.7700
Pivot   1,653.4700
Sup 1   1,640.3800
Ex-Low   1,636.1700
Sup 2   1,623.0800

Economic Events for March 16, 2012

Time Currency Event Forecast Previous

13:30 CAD Foreign Securities Purchases 6.27B 7.38B

Foreign Securities Purchases measures the overall value of domestic stocks, bonds, and money-market assets purchased by foreign investors.

13:30 CAD Manufacturing Sales (MoM) 0.60% 0.60%

Manufacturing Sales measures the change in the overall value of sales made at the manufacturing level.

13:30 USD Core CPI (MoM) 0.2% 0.2%

13:30 USD CPI (MoM) 0.4% 0.2%

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

14:15 USD Industrial Production (MoM) 0.4% 0.0%

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

14:55 USD Michigan Consumer Sentiment Index 75.7 75.3

The University of Michigan Consumer Sentiment Index rates the relative level of current and future economic conditions. There are two versions of this data released two weeks apart, preliminary and revised. The preliminary data tends to have a greater impact. The reading is compiled from a survey of around 500 consumers.

March 15

04.00 P.M GMT

Thursday is usually a bounce day and the 1635-1640 area offers first support for today. Resistance for the remmainder of the day is the 1654-1662 area. In summary, the market is choppy and consolidating and we'd look for a bounce today towards resistance listed. In summary, look for a bounce towards 1654-1662. It's too early to tell if the downside is complete, but this is one area of potential. For the moment,

The trend is still down but gold should bounce

today towards 1666.

04.00 A.M GMT
All cycles are now in play and the potential BIG move down is in full blossom. It’s possible to bounce here, but the red dotted trend line at 1661-1666 AREA is RESISTANCE FOR THURSDAY.

Long Term=Up (major resistance held the uptrend – Need monthly closes above 1767-1804)
Medium Term=NEUTRAL (Major Resistance 1767 Monthly Close)
Intermediate Term=Down---The North American Winter seasonal correction in play.
Short Term=Down – short term cycles in play.
Support and Resistance for Thursday
Initial Resistance for 1654-1665 and 2nd tier 1678-1683
Initial Support 1625-1635 and 1605-1612

RECAP

Gold futures were crushed again on mid week Wednesday but not before prices rallied to 1683 in the first 45 minutes of the day (Eastern Std time). This was the exact price that gold dropped from once the fed meeting notes came out on Tuesday. So although we did not trade BEFORE the fed meeting, the order we entered last night to short on the signals trade page at 1681.50 played out perfectly as we caught the very top.
The realization that the “spin” at the moment is that everything is ok in the economy and the LONG BOND market suffering yet another drop which now is pointing to long term interest rates beginning to rise. Whether these trends have changed or whether this is just a bounce doesn’t matter at the moment. The exit out of the long bond and gold has been a move back to the stock market as the view is that the economy is turning and stocks are going much higher and will be the place to be.

Outlook for Thursday

The Wednesday low may have been it for this week. Price will try and consolidate back to 1654-1665 on Thursday. Regardless of the bounce, this is a dangerous market on the downside.

Short Term – Down
Cycles

the cycle drop is hard and the Wednesday day low was right on our support line.
The outlook is the same---with bounces aside, the downside has the advantage.

We are at one of the two likely lows for the week---one of the two yellow zones. The next support is the 1605-1612 area and we’d expect any drop from here to bounce from that area on Thursday. So we are either down going down for the week with a bounce or the lower yellow line will be the other potential. The cycle down remains in play.

Gold Daily Price Chart with short term cycles

It would take a close above 1692 (Spot) to neutralize the downtrend.
Looking towards the upside, first WEEKLY resistance is now the 1683-1693 area and daily resistance is now 1654-1666.

What Next?

Going into Thursday should have price trying to bounce into Friday from our 1637 support area.

The potential that mid week Wednesday HAS MADE the low for the week is a HIGH CONSIDERATION, where we would bounce for a few days and resume the downtrend next week. However, when the trend is down this hard it’s best to favor lower overall.

With the current condition, we could see a low late Wednesday or early Thursday, with a bounce moving into Friday. Look for support at the 1637-1654 area and for resistance to be the 1654-1666 price point.

The weight of the evidence points to the odds still favoring the downside.

Today’s breakdown hit just above the lower dotted red downtrend line and found support. With So much time left in the short term cycle, it probably best not to try and get long yet. We’ve discussed the Feb 15th-April 15th time as when the long term waves we’re in play and that the final cycle for the short term began on March 8th. All cycles are now in play and the potential BIG move down is in full blossom. It’s possible to bounce here, but the red dotted trend line at 1661-1666 AREA is RESISTANCE FOR THURSDAY.

Gold DailyPrice Chart with Channel lines

HERE’s WHAT TO WATCH FOR MONTHLY RESISTANCE POINTs NOW.
THE FEBRUARY LOW ---- IS 1688. THUS 1683-1693 IS VERY IMPORTANT RESISTANCE NOW. As long as price is below there, the trend is down.
Thursday has first resistance at 1654-1665.

Bottom Line
We can bounce here for the next day or two, but the trend is down into next week.

02.00 A.M GMT
Gold, Still Short But Nearing Support At $1621/26

Gold plummeted on FOMC minutes and an address by Chairman Bernanke, both saying the overall US economy was on the mend, slow, but mending nicely. With that there are little hopes of any QE or additional monetary intervention at this time. Investors are also less stressed now that the EU has finalized the bailout agreements with Greece. Gold is trading at 1637.25 down 56.95 joining most of the commodities trading lower .
Gold should find a bit of support around the 1625 level, but will most likely break through, especially if there is a strong jobs report on Thursday.

Fed Chairman Bernanke today said again that the pace of the economic recovery has been “frustratingly slow.” Bernanke said that “the condition of community banks is improving” despite economic uncertainties. “Profits of smaller banks were considerably higher in 2011 than in the previous year, nonperforming assets were lower, provisions for loan losses fell appreciably, and capital ratios improved,” In his address Bernanke said. The Fed is trying to listen and understand small banks’ concerns about regulation.

Economic Events Scheduled for March 15, 2012

09:30 CHF Interest Rate Decision 0.00% 0.00%

Swiss National Bank (SNB) governing board members come to a consensus on where to set the target range for the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

10:00 EUR ECB Monthly Report

The European Central Bank’s (ECB) monthly report contains the statistical data that policymakers evaluate when setting interest rates. The report also provides detailed analysis of current and future economic conditions from the bank’s perspective.

11:00 EUR Employment Change (QoQ) -0.2% -0.1%

Employment Change measures the change in the number of people employed. Job creation is an important indicator of consumer spending.

13:30 USD Core PPI (MoM) 0.2% 0.4%

13:30 USD PPI (MoM) 0.5% 0.1%

The Core Producer Price Index (PPI) measures the change in the selling price of goods and services sold by producers, excluding food and energy. The PPI measures price change from the perspective of the seller. When producers pay more for goods and services, they are more likely to pass the higher costs to the consumer, so PPI is thought to be a leading indicator of consumer inflation.

13:30 USD Initial Jobless Claims 356K 362K

13:30 USD Continuing Jobless Claims 3416K

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.

13:30 USD NY Empire State Manufacturing Index 17.4 19.5

The Empire State Manufacturing Index rates the relative level of general business conditions New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York State.

14:00 USD TIC Net Long-Term Transactions 29.3B 17.9B

Treasury International Capital (TIC) Net Long-Term Transactions measures the difference in value between foreign long-term securities purchased by U.S. citizens and U.S. long-term securities purchased by foreign investors. Demand for domestic securities and currency demand are directly linked because foreigners must buy the domestic currency to purchase the nation’s securities.

15:00 USD Philadelphia Fed Manufacturing Index 11.4 10.2

The Philadelphia Federal Reserve Manufacturing Index rates the relative level of general business conditions in Philadelphia. A level above zero on the index indicates improving conditions; below indicates worsening conditions. The data is compiled from a survey of about 250 manufacturers in the Philadelphia Federal Reserve district.

March 14

02.00 A.M GMT

On Wednesday, resistance is going to be the 1683-1693

area and support is 1637-1650.

The downtrend remains in play.

Long Term=Up (major resistance held the uptrend – Need monthly closes above 1767-1804)
Medium Term=NEUTRAL (Major Resistance 1767 Monthly Close)
Intermediate Term=Down---The North American Winter seasonal correction in play.
Short Term=Down – short term cycles in play.
Support and Resistance for Wednesday
Initial Resistance for 1678-1683 and 2nd tier 1693-1701
Initial Support 1637-1651 and 2nd tier 1600-1625 & 3rd Tier 1581-1585

RECAP

Gold futures and bullion we’re crushed on Tuesday afternoon following the FED meeting which basically said nothing. We favored a trading range right up into the meeting, and the 1683 low (and initial support listed last night) held up until after the meeting.
Then after three pm New York time, JPMorgan announced plans to raise its dividend ahead of the Federal Reserve's release of the results of the latest bank stress tests and the “hint” was in-----the stock market exploded higher and gold was pummeled.

Outlook for Wednesday

The damage is done for gold. Now we have to look for a set-up. I know some of you don’t particularly like it if we short gold, and we just want to say, we’re following the trend and it is nothing personal about gold. It is merely trading the trend. And trading is not the same as accumulating positions your looking to hold. That we’re still doing and when it’s time to add some again, we will.

The 34 week average at 1705 and the February support gave way and that is now resistance going forward. The market is now poised to move towards the 1627-1650 area next. In addition, gold is now below the February lows and closed just below the 200 day moving average and that keeps our outlook the same as it has been all week---we favor the downside. With mid week Wednesday due, there’s a potential that we could bounce, but with the trend down hard, it is not something we should count on, regardless of if it happens or not.

On Wednesday, resistance is going to be the 1683-1693

area and support is 1637-1650.

The North American seasonal is in full play and the trend remains down.

Short Term – Down
Cycles

Last night’s view of the short term cycle chart had the blue cycle placed at the top for a “downtrend” view---and turned out to be the correct outcome as price collapsed and the hard move down is in play. Any bounce back should be temporary and resistance should be strong at the 1688-1693 area. Even the 1675-1680 area is going to become a difficult point as the 200 day average resides in that price zone.
The outlook is the same as Monday and Tuesday---bounces aside, the downside has the advantage and with today being a buttonwood weekly/daily cluster date, it adds to the bearish case that we’ve been listing that keeps growing. The downtrend remains in play.

What Next?

Going into mid week Wednesday, usually has the price favoring the high for the week. With the current condition, we could see a low late Wednesday or early Thursday, with a bounce moving into Friday. The trend remains down. Look for support at the 1637-1654 area and for resistance to be the 1678-1683 price point and the 1688-1693 zone.

The weight of the evidence points to the odds favor the downside.

Today’s breakdown hit just above the lower dotted red downtrend line. The 1650-1654 area shows support as does the 1600-1625 area. While this area could be a low, with so much time left in the short term cycle, it probably best not to try and get long yet. We’ve discussed the Feb 15th-April 15th time as when the long term waves we’re in play and that the final cycle for the short term began on March 8th. All cycles are now in play and the potential BIG move seems underway. Any bounce back to 1683-1693 should be resistance.

Gold Daily Price Chart with channel lines of support and resistance

Economic Calendar March 14, 2012

10:30     GBP      Average Earnings Index +Bonus      1.9%    2.0%
10:30 GBP      Claimant Count Change       6.0K       6.9K
The Average Earnings Index measures change in the price businesses and the government pay for labor, including bonuses. Claimant Count Change measures the change in the number of unemployed people in the U.K. during the reported month. A rising trend indicates weakness in the labor market, which has a trickle-down effect on consumer spending and economic growth.
11:00     EUR       CPI (YoY) 2.7%       2.7%
11:00 EUR       Industrial Production (MoM)       0.7% -1.1%
11:00     EUR       Core CPI (YoY)        1.6%        1.5%
This is a triple report covering all of the eurozone. The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.
13:30     USD       Current Account      -114.0B      -110.0B
The Current Account index measures the difference in value between exported and imported goods, services and interest payments during the reported month. The goods portion is the same as the monthly Trade Balance figure. Because foreigners must buy the domestic currency to pay for the nation’s exports the data can have a sizable affect on the USD.
13:30     USD       Import Price Index (MoM)      0.6%       0.3%
The Import Price Index measures the change in the price of imported goods and services purchased domestically.
15:00      USD       Fed Chairman Bernanke Speaks
Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to speak. As head of the Fed, which controls short term interest rates, he has more influence over the U.S. dollar’s value than any other person. Traders closely watch his speeches as they are often used to drop hints regarding future monetary policy.

Mar 13
13.30 P.M GMT

The markets will now look beyond the retail sales report to the afternoon US Fed statement. but it's possible that no significant announcement will be made from the Fed today as the economy is still thought to be moving forward, but perhaps at a pace that is slightly less than what the Fed had hoped for. However, with the housing market still fragile and falling, and with the Euro situation, he probably won't be threatening rate increases either.

12.00 P.M GMT

The euro zone finance ministers' meeting is to continue today; however, the focus will shift into Spain after the euro-area ministers reassured that Greece will obtain the second bailout package since the nation met all the requirements set by international lenders.

The conflict between Spain and the rest of the euro zone nations continues, where the euro zone finance ministers in their first test to impose targets on individual countries except Greece seem to be unable to force Spain to revise its budget plans, noting that Brussels as a start imposed deficit targets of 4.4% of GDP this year; however, Spain clarified that the Spanish target will be 5.8%, which in result made finance chiefs to revise their targets to 5.3%, but till now both parties reached no deal.

Major fundamentals are to be released from Europe and U.S. today, where the focus will be on the United Kingdom's trade balance figures, with expectations the deficit could have widened in January.

After then, the euro area region and Germany will provide markets with the critical ZEW Survey, which measures the economic sentiment and the confidence in the current situation. We expect the confidence to improve again this time, where according to the European Central Bank President Mario Draghi the Bank sees signs of stabilization and an improving level of confidence.

The retail sales figures from the world's largest economy will attract all the attention with the start of New York session, with expectations the advanced retail sales could have improved by 1.1% from 0.4% in February.

After the release of the this heavy load of fundamentals, markets will hold their grounds, awaiting the Federal Open Market Committee (FOMC) rate decision with no surprises expected this meetings, where policy makers are projected to leave rates at the virtually zero level (0.0%-0.25%).

Furthermore, the Federal Reserve isn’t expected to add further stimulus this meeting due to the flow of upbeat macroeconomic fundamentals in addition to the rebound in the labor market, which showed that U.S. returned on the right track of recovery, the thing that might add strength to the U.S. dollar and therefore force downside pressures on metals and commodities in general to trade lower, but ahead of the meeting gold might remain slightly biased to the upside.

03.00 A.M GMT

Let’s get ready for the FED. Tuesday favors a trade range of 1688-1712. Bounces aside, and FED movement, the downside has the advantage.

Long Term=Up (major resistance held the uptrend – Need monthly closes above 1767-1804)
Medium Term=Up (Major Resistance 1767 Monthly Close) CLOSE TO GOING NEUTRAL
Intermediate Term=Down---The North American Winter seasonal correction in play.
Short Term=down – First Resistance at 1717-1722 – MAJOR CYCLE TURN MAR 8th – 12th

RECAP

Gold futures traded lower on Monday with the biggest news being a 22 year high Chinese trade deficit of $31.48 billion for February. Commodity markets reacted lower in lieu of lowered Chinese demand and the global economic implications. Traders have U.S. retail sales and a FOMC Rate decision and meeting. No change will come, but it’s the danger they present when they speak and the ‘control boyz’ are ready with the finger on the button.
Gold sold lower on Monday, closing below our key important 1705 area (FEB SUPPORT AND 34 week average).
Last night’s bottom line favored a trading range day in front of the Fed meeting and both the upside resistance and the downside support number were hit on Monday with price closing right in the middle.

Outlook for Tuesday

With Retail sales and the FOMC meeting, gold should be in a trade range of 1688-1715 into the reports. Depending on retail sales, and then what the Fed statement is, will most likely get this market moving its next short term trend.

Tuesday has the 1712-1717 area is first resistance. Until we move above 1717---the downside has the advantage.

Short Term – Cycles

Tonight’s view has the short term cycle placed at the top for a “downtrend” view. This position has the blue cycle where it has been appearing since the August highs, at price highs. IF we were to remove that 100 dollar down day, we’d have the chart looking like a cycle high.
While we’re still not sure which way the cycle wants to play out, it seems that the downside still has the advantage as the moving average trends are down on the intermediate term, we still have the seasonal weakness for March in play and the chart pattern peak at 1717 today kept gold inside the bearish “look” on the chart.
The Friday reversal at 1675 is an important point because the traders who took positions on a “reversal” bar will be bailing out should we take out that low. For now, the bottom line is until we MOVE OUT OF THE 1675-1725 range – the cycle can still play out either way. I still have to favor the downside due to all other indications suggesting lower is still the bias on the short term. With Bernanke and the FOMC meeting on Tuesday, making plans however, can be hazardous to your wealth!! The safest thing is to wait until the meeting, and then try find a setup.

So far we got the peak on the open at 1717 last night and we’ve drifted lower ever since. Thus the first move since the “cycle” window closed has been down. The pullback was 25 dollars lower on Monday, but it did end up holding the FEBRUARY key support we’re watching --- 1682-1692--- and today’s low at 1693 kept price inside the February range.
In summary, we need a bit more evidence to favor either side. The chart lost a lot of its bullish look on Monday. It would take a close above 1717-1722 (Spot) to neutralize the downtrend that started on Monday.
Looking towards the upside, overhead resistance remains the 1717-1727 area. We mentioned last night that the 38% Fibonacci retrace is 1712---and so the 1705-1712 area is probably where we will either make SUPPORT---OR---RESISTANCE.

What Next?

Going into Tuesday we have the FED FOMC MEETING where interest rate policy will be discussed so anything goes as regards to gold. Depending on what he says can send the markets in a tizzy. Our natural tendency is to want to trade in front of such a meeting. The opportunity for profit is great. BUT so is the risk. If we’re going to make money in this market, we have to have an accumulation plan for holding (buy zone button) and if we’re going to trade, then it can only be about making money and nothing else. It always sucks getting out of a trade just for the FED meeting, but since I’m not long, it is not as bad. So from a trade perspective, I’m not in a hurry to go stand in front of the FED.
With that said, the weight of the evidence points to and odds favor the downside. There are no absolutes, especially on FED DAY, but the odds favor the downside. As long as we hold support---we can't rule out a mid-week Wednesday high point first. With the Fed meeting---for me anyway, I most likely will wait and then look for a set up. If we get a push up to 1712 --- traders can look at that area as a potential high on Tuesday.
It is possible that we could move higher depending on what the FED says. Regardless, the “control boyz” will twist the news (as it was on the 100 dollar day) to make the fundamental news fit the price they move gold too. We already know they can do what they want and two weeks ago was a warning to us all. Be careful how much leverage you use. If price gives way to the downside, this chart favors the 1650 area.

HERE’s WHAT TO WATCH

THE FEBRUARY LOW ---- IS 1688. THUS 1683-1693 IS VERY IMPORTANT SUPPORT. Whenever we are below the FEB low, the downside has the advantage. Today’s lows was right at 1693. TRADERS CAN USE 1683-1693 AS THEIR KEY TURN POINT. Above February lows, favor the long side. BELOW 1683, favor the downside.
Then there’s the 1705 area. This is where the 34 week moving average resides and where the FEBRUARY SUPPORT USED TO BE. As long as we are below the 1705 area---the the “BULLS” are in retreat. They must regain the 1705 area (February’s support) to have any chance of a move up.
IN SUMMARY – we have 1683-1693---the Feb lows and we have 1705-1712 the Feb old SUPPORT---This is like the neutral zone where the bulls and bears decide WHICH WAY. That is the resistance and support for Tuesday.
Finally ---- 1717-1727 would be the point where price has a potential to move higher to Wednesday. Above 1727 would favor the 1736-1740 area.

Bottom Line

The chart below cuts to the chase. The two yellow lines represent the trading range. The lower Gann line at 1688-1693 is in line with the FEB lows so it is KEY resistance. WHEN EVER we are below 1688, the potential to move lower is in play. We can see how important this area is. There should be a price bounce at this area initially if we touch it on Tuesday but a break there FAVORS LOWER PRICE. From there, I’ll look for a set up.
Let’s get ready for the FED. Tuesday favors a trade range of 1688-1712. Bounces aside, and FED movement, the downside has the advantage.

Gold Daily Price Chart with Gann Overlay and Angles

00.00 A.M GMT

Supports / Resistances

Res 2   1,726.2700
Ex-High   1,715.9300
Res 1   1,713.4100
Pivot   1,703.0700
Sup 1   1,690.2100
Ex-Low   1,692.7200
Sup 2   1,679.8700

Gold fell below the crucial 1700.00 range today. As investors position themselves for Tuesday FOMC statement and Fed decision. Investors have also been slowly moving to riskier assets now that Greece is dealt with. There has been little in the way of economic news from around the world, except for the disappointing numbers out of China over the past few days. Oil is also trading down today.

Last week China released several economic reports, all having negative sentiments or lacking strong support. These included,

China’s consumer price index rose at a weaker-than-expected rate of 3.2% in February from the same month a year earlier. The producer price index for February came in at 0%, also weaker than expected and slowing from January’s 0.7% year-on-year increase. Also China’s industrial production and retail sales growth weakened in the first two months of 2012 from the year-earlier period, an official data release showed Friday. Industrial production for the January to February period climbed 11.4%, falling short of a 12.4% increase anticipated.

This data culminated over the weekend when China posted a trade deficit of $31.48 billion in February after reporting a $27.28 billion surplus in January, according to data released by the General Administration of Customs on Saturday.

China’s central bank governor says the yuan is approaching fair value against foreign currencies, while also pointing out it is too early to tell if the nation’s trade deficit in February is the start of a important trend.

Scheduled Economic Events for March 13, 2012

US
13:30     USD     Core Retail Sales (MoM)      0.8%      0.7%
13:30     USD     Retail Sales (MoM)      1.0%      0.4%
(Core and ) Retail Sales measures the change in the total value of sales at the retail level in the U.S., excluding automobiles. It is an important indicator of consumer spending and is also considered as a pace indicator for the U.S. economy.
19:15     USD     Interest Rate Decision     0.25%      0.25%
19:15     USD     FOMC Statement
Federal Open Market Committee (FOMC) members vote on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation. Along with the Decision the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) statement is the primary tool the panel uses to communicate with investors about monetary policy. It contains the outcome of the vote on interest rates, discusses the economic outlook and offers clues on the outcome of future votes.

Europe
01:01 GBP      RICS House Price Balance -14%      -16%
The Royal Institution of Chartered Surveyors (RICS) House Price Balance measures the percentage of surveyors reporting a house price increase in their designated area. A level above 0.0% indicates more surveyors reported a rise in prices; below indicates more reported a fall. The report is a leading indicator of house price inflation as surveyors have access to the latest price data.
09:15     CHF    PPI (MoM)      0.3%     0.0%
The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation
10:30     GBP      Trade Balance      -7.8B    -7.1B
The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported.
11:00     EUR     German ZEW Economic Sentiment     10.5    5.4
11:00     EUR ZEW Economic Sentiment      3.8      -8.1
The Zentrum fur Europaische Wirtschaftsforschung (ZEW) Economic Sentiment Index rates the relative six-month economic outlook for the euro zone. On the index, a level above zero indicates optimism, below indicates pessimism. It is a leading indicator of economic health. The reading is compiled from survey of about 350 German institutional investors and analysts.
13:30     EUR      ECB President Draghi Speaks
Mario Draghi (born 3 September1947) is an Italian banker and economist who has been governor of the Bank of Italy and succeeded Jean Claude Trichet as President of the European Central Bank starting November 2011. As head of the ECB, which controls short term interest rates, he has more influence over the EUR value than any other person. His comments may determine a short-term positive or negative trend.

Mar 12
Monday favors a trade day in the 1695-1725 trade range

Gold Daily Update for Monday March 12 2012

Long Term=Up (major resistance held the uptrend – Need monthly closes above 1767-1804)
Medium Term=Up (Major Resistance 1767 Monthly Close) CLOSE TO GOING NEUTRAL
Intermediate Term=Down---The North American Winter seasonal correction in play.
Short Term=down – First Resistance at 1692-1712 – MAJOR CYCLE TURN MAR

8th – 12th Close to going Neutral.
Support and Resistance for Monday
Initial Resistance for 1717-1727 and 2nd tier 1737-1744
Initial Support 1692-1702 and 2nd tier 1675-1682 & 3rd Tier 1654-1667

The reversal day on Friday looks bullish on the chart and any move below the 1670 area will favor lower prices. On the upside, any new high above 1736 would tilt the odds to favor the upside. But we need to be very careful. It looks like Friday was the “CLEANOUT” day where they flushed as many longs and shorts as they could. When looking at this chart, it favors higher if gold moves above the yellow zone.

A lot of players will probably go long above 1720 and again at 1727 as that is the recovery high so far since the big down day (Above chart). That would probably lead to the test of 1736-1744. If we get a pop to that area, DEPENDING on how the pattern looks, it may be the high for the week. On the downside, if we hold 1683 on a pullback, and then exceeded the dotted trend line, it should tilt the odds higher. In summary, we need a bit more evidence to favor either side.

If we close below 1665, then 1625-1650 becomes support. Even a close below 1682 leaves the action open to the downside.

What Next?

Felix Pinhasov penned this article at Seeking Alpha that sums up the coming week. The question is---do you want to be long or short a futures contract in front of this meeting after what happened two weeks ago?
The FOMC board will meet on Tuesday March 13 to announce its interest rate policy and also issue a communication statement. The board can move stock, bond, currency and commodity markets through its ability to set the overnight lending rate and is therefore an important monetary event. The Fed has made it very clear in the past that interest rates are to remain at current ultra low levels until 2014 and that phenomenon is well priced into the markets. However, it seems that many out there, particularly in the gold (GLD) market, are banking on the idea that an additional liquidity program (QE3) is seriously being considered by the committee. Although some members of the committee are likely to remain in favor of an additional unsterilized bond buying program, recent events can guide us in assuming what message the FOMC board will release on Tuesday.

With the Fed meeting on Tuesday if favors pretty much a trading range for gold on Monday. Based on past meetings, odds favor the 1727-1737 area should be maximum upside potential, and probably more likely the 1718-1726 area will be resistance. On the downside, the 1688-1692 area looks like good support. There is minor support at 1702-1711 area as well but we don’t know how strong that area is.

Gold Price Chart with Gann Line support and resistance price points

Bottom Line

Gold’s rebound from 1675 on Friday was a saving note for gold as price closed above the weekly 34 week moving average keeping the medium term in bull mode. The two green areas are the support and resistance to the current trading range. As you can see by the action, its only one day’s range.Until we move out of this area---price is in neutral ground. On the upside, it looks like a move above 1727-1732 would favor 1736 and up to 1750.On the downside, the low from last week at 1666-1670 is support
We can make a case for either side. As long as price maintains above lows of last week and the daily reversal bar on the chart from Friday, the upside potential has a slight edge. ANY MOVE below that area favors lower gold prices.

THE yellow zone on the chart is the cycle window. A new trend should be ready to take place for the next two weeks. Whichever way it moves out of the green neutral zone, should set the pace for trend. I’ll be looking for a set-up but I don’t know if I want to be in a trade in front of the FOMC meeting. It may mean giving up some ground, but making money is the goal, and not having to be in a position at all times. I consider myself lucky to not have taken a loss on the 100 dollar day.
If price fails to get above resistance on this bounce, and turns back down the first target will be the lower up trending mini red dotted line near 1650.

Watch 1717-1727 area---that is the key resistance for Monday. If price plays out like it usually does the day before an FOMC meeting, then the price range should (and I say should)---be contained. Monday favors a trade day in the 1695-1725 trade range.

Gold Daily Price Chart with trading range price points

Gold Daily Price Chart with trading range price points

The gold markets fell for much of the Friday session,
only to turn around and bounce back up.
The resulting candle was a hammer,
and it shows that perhaps the bulls are coming back
into the market in order to push prices back up.

Gold continued a third straight session, after falling in early trading it moved up tied to positive U.S. jobs data to join oil and other metals in a commodities rally.
Gold ended the day up $12.80; at $1,711.50 an ounce Prices increased 0.1% on the week. The old adage, gold up dollar down is not holding true this week. Gold should begin to start to fall as investors move to more risky trades and away from safe havens. This week should be a down week for gold. Last week gold moved between a high of 1725.40 and a low of 1662.50.

There is a major line of support at 1650.00 and I would expect Gold to fall to that level this week

Supports / Resistances

Res 2   1,738.5700
Ex-High   1,714.2500
Res 1   1,725.4200
Pivot   1,701.1000
Sup 1   1,687.9500
Ex-Low   1,676.7800
Sup 2   1,663.6200

Gold high for the last week 1726 --- low 1663 --- close was 1714.

Gold moved back up the charts , trading at 1713.05 up 14.35. As the US jobs reports were released Gold cascaded down falling as low as 1683.15 but then bounced right back up. Simultaneous with the jobs release was also the US trade balance which came in much higher than expected, giving the markets some negative news.

The U.S. trade deficit widened sharply in January, driven higher by record imports of autos, capital goods and food, government data reported. The trade gap expanded 4.3% in January to $52.6 billion from $50.4 billion in December.

The U.S. created 227,000 jobs in February and more people found work in the prior two months than previously reported, suggesting the economy’s recent momentum is likely to continue.

The unemployment rate, meanwhile, was unchanged at 8.3% as nearly half-a-million workers reentered the labor force in search of job, the Labor Department reported Friday. That’s usually a good sign because it means people believe more work is available.

The deal is done, finally. Greece finished their debt swap with private creditors. Bondholders representing some 85% of Greece’s outstanding private-sector debt, well above the government’s minimum threshold, have agreed to the swap, easing pressures on the eurozone.

Conditions are in place for Greece to get its second bailout, said Eurogroup President Jean-Claude Juncker in a statement released Friday. “I welcome the significant progress achieved in the preparation of the second Greek adjustment program,” said Juncker, after a teleconference between euro-zone finance ministers on Friday.

Upcoming Economic Events

06:45     EUR      French CPI (MoM)
The French Consumer Price Index (CPI) measures the changes in the price of goods and services purchased by consumers.

08:15     CHF      PPI (MoM)
The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation.

09:30     GBP     Current Account
The Current Account index measures the difference in value between exported and imported goods, services and interest payments during the reported month. The goods portion is the same as the monthly Trade Balance figure. Because foreigners must buy the domestic currency to pay for the nation’s exports the data can have a sizable affect on the GBP.

19:00     USD      Federal Budget Balance
The Federal Budget Balance measures the difference in value between the federal government’s income and expenditure during the reported month. A positive number indicates a budget surplus; a negative number indicates a deficit.

Government Bond Auction Schedule (this week)

Mar 12 10:30 Germany Eur 4.0bn new Sep 2012 Bubill
Mar 12 18:00 US Auctions 3Y Notes
Mar 13 09:30 Netherlands Eur 2.5bn-3.5bn re-opened Apr 2015 DSL
Mar 13 10:10 Italy BOT auction
Mar 13 10:30 Belgium Auctions 3 & 12M T-bills
Mar 13 15:30 UK Details gilt auction on Mar 22
Mar 13 18:00 US Auctions 10Y Notes
Mar 14 10:10 Italy BTP/CCTeu auction
Mar 14 10:10 Sweden Auctions T-bills
Mar 14 10:30 Swiss Bond auction
Mar 14 15:30 Sweden Details nominal bond exchange auction on Mar 21
Mar 14 18:00 US Auctions 30Y Bonds
Mar 15 09:30 Spain Obligacion auction
Mar 15 09:50 France BTAN auction
Mar 15 10.30 UK Auctions 4.5% 2042 conventional Gilt
Mar 15 10:50 France OATi auction
Mar 15 16:00 US Announces auction of 10Y TIPS on Mar 22

Gold Weekly Update March 12-16, 2012

Long Term – Up -But failed at key resistance of 1767-1804 and pullback in progress
Medium Term – Bullish (almost Neutral) – correction in progress since August
Intermediate term – Bearish (price below the moving average trend)
Short Term – Neutral – In a trade range of 1666-1736 – next trend begins this coming week
Resistance for this week 1727-1737 /2nd 1755-1767
Support for this week 1664-1675 /2nd tier 1625-1637

It seems to get harder and harder each week determining the direction of the markets. We feel most of that is due to the choppy and overlapping conditions that occur during a correction and that there are long term wave cycles that are taking place in this time frame that is also having an effect on prices. Until we move above the key price points of 1767-1804 on a closing basis, the potential for this kind of action can continue. The big question is whether the March seasonal has completed its work and the current short term cycles which are due to begin this week will give us a two week rally or whether the correction will provide one more leg to the downside.
The long term trend is up, and so is the medium term. However, a close below 1670 this week will put the medium term in a position where the trend could move to neutral in its reading. The intermediate term trend is neutral/bearish and needs a close back above the 1744-1755 area to put it back in neutral mode.
Once we got our move above 1744, price quickly over took 1755 and then 1767. We were expecting 1799-1812 on a break above 1767, and we still think that is in the cards in the coming week. The trend remains up. The next potential time to look for a turn will be the March 4th – 10th time frame where the potential for an intermediate term pullback will come in play. For now, we have it on our radar, but will wait for price to show signs of weakness before full consideration.