Tronlink Wallet Airdrop: GOLD TREND March 19

March 23
11.00 P.M GMT

Gold futures climbed again today, reaching 1665.85 up +23.45 for the day, ending the week 0.4% for the week. Gold finished higher for the week as a decline in the U.S. dollar fed a broad rally in commodity markets. Looking ahead, analysts were a bit downbeat about the prospects for gold prices. Traders are expecting less liquidity injections (bond buying) by the federal government and as a realization of that permeates less active traders’ landscapes,

We’ll see further declines in gold.

01.00 P.M GMT
Volatility and fluctuations are highly possible especially with lack of critical fundamentals from major economies and as this week comes to an end, where some investors may close their position and accordingly the effect will be revised and markets might end up with slight gains today.

02.00 A.M GMT
The trading range of 1644-1666 is still in play but the first close above or below will indicate which side the market favors next.
A close above 1666 will neutralize the downtrend
IF we get a push to 1600 on Friday, it should provide the short term cycle low.
Watch that trading range and let's see which way it wants to move. The downside still has the advantage.
It may attempt a test higher to 1650 after which
weakness may set it to a drift down to 1629
Warning: End of trend

Supports / Resistances
Res 2   1,671.6200
Ex-High   1,656.6500
Res 1   1,658.2200
Pivot   1,643.2500
Sup 1   1,629.8500
Ex-Low   1,628.2800
Sup 2   1,614.8800

01.00 A.M GMT

Gold hit a low of 1627.75 as investors moved back to the safety of the USD, gold began to fall. A strike by Jewelers in India over the governments doubling of the import duties again after just increasing it a short time ago, has upset manufacturers and buyers in India one of the major consumer of gold.

Gold has dropped almost 9% since late February when it traded at USD 1790.00 and is about 15% below the all-time high of USD 1,920 of September 2011.

The News the markets have been waiting for and hoping for. The number of Americans who filed requests for jobless benefits fell by 5,000 last week to 348,000, the lowest level since February 2008, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 353,000 from 351,000.

Applications for weekly unemployment benefits set a new four-year low, the government reports Thursday, in another sign that the U.S. labor market continues to gradually improve.

In the week ending March 17, the advance figure for seasonally adjusted initial claims was 348,000, a decrease of 5,000 from the previous week’s revised figure of 353,000. The 4-week moving average was 355,000, a decrease of 1,250 from the previous week’s revised average of 356,250.

Although worries about the slowdowns in China, also helped the fall of gold, behind India, China is the second largest importer of gold.

Economic Events for March 23, 2012
01:01     GBP    Nationwide Consumer Confidence    49    47
Nationwide Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism
10:30     GBP       BBA Mortgage Approvals      39.1K      38.1K
The British Bankers’ Association (BBA) Mortgage Approvals measures the number of new mortgages approved by BBA-backed banks during the previous month. It includes more than half of the total U.K. mortgage market. It provides information about the buyers in the housing market in the U.K.
12:00     CAD      Core CPI (MoM)      0.3%      0.2%
12:00     CAD      CPI (MoM)       0.5%      0.4%
CPI and Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.
15:00     USD      New Home Sales      325K       321K
New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated.

March 22
05.00 A.M GMT
The trading range of 1644-1666 is still in play but the first close above or below will indicate which side the market favors next. Watch that trading range and let's see which way it wants to move.

The downside still has the advantage.

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 is about complete
Short Term=Down – short term cycles call for a bottom this week.
Support and Resistance for Thursday
Initial Resistance for 1657-1665 and 2nd tier 1677-1682
Initial Support 1638-1648 and 1605-1612

RECAP

Gold has been trading in a range of 1640-1665 where it is trying to establish a low point from which to attempt a rally. There has been no earth shattering news either way. Price steadied on Wednesday and has been in corrective mode since price touched 1717 two Monday’s ago. US treasuries have declined sharply over the last week dampening demand for commodities in general. The China slowdown has also affected commodities so far this week.

Our call for a trading range is still in play but we think that this is about to end on Thursday.

Futures settled below the 50-week moving average. This only adds to the list of significant moving averages gold has traded below in the past month: the 20-day (now 1703), the 50-day (now 1707), the 100-day (now 1700), the 200-day (now 1684) and most recently the 50-week (1656). Open interest is falling, volumes are weak, and stochastic on the weekly chart suggest Gold may be slipping away from overbought territory.

Gold price suppression is so aggressive and blatant now, that the world financial system's problems must be far worse than generally understood, Sprott Asset Management's John Embry told King World News on Tuesday.

Outlook for Thursday

Look for gold’s first resistance area to be 1657-1667 on Thursday. Since the short term cycle window is open, a trend change is due this week. The ideal date is tomorrow, the 22nd (plus or minus 72 hours). On the downside the 1635-1644 area is support. So far that area has held the price lows this week. We’re not sure yet if gold has one more dip on this current correction or whether we are basing and ready to move higher into the first week of April. A close above 1675 would be the first indication that the short term cycles have turned up. With Mid Week Wednesday past us, its possible for gold to turn down into Thursday. The advantage is to the downside. Watch that 1635-1644 area that is key support.

What Next?

Price has been inside our trading range (1644-1665) for three full days and we suspect that the FIRST CLOSE above or below this range will set the pace for the remainder of the week. With commodities in general rolling over on the short term, and with Mid Week Wednesday now complete, the advantage on Thursday is still to the downside.

The chart below shows the two black arrows of support and resistance. The red mini line above price is the first spot to watch for resistance as it held resistance today. The lower down trending red dotted line is support. For Thursday that works out to be the 1625 area. The lower green highlighted area in the 1644 area is where price is trying to forge some support. Any close below that area will keep the pressure on. It's going to take a move above 1670-1675 to neutralize the downtrend. This trading range we've discussed should be complete and if there's another dip down, Thursday is the day most likely to encounter price pressure.

Gold Daily Price Chart with support and resistance levels

Bottom Line

The trend is still down but short term cycles are due to bottom this week. If we see a set up, we’ll look to take a short term trade. The downside still has the advantage. A close above 1676 will neutralize the downtrend and favor that the short term cycles are having effect. Thus look at 1644-1648 as first support at the lower green highlighted area. That will be followed by the down trending dotted red line at 1625 and finally, should we get a hard break lower, the 1579-1605 will be major support. A cycle low is due this week and favors the 22nd as the ideal day where price is due to bottom, but there's a 72 hours standard deviation so the potential to move lower into Friday would still be within the 'window.' A close above 1675 will be the first clue that the cycles are kicking in. In summary, the trend is down. We may get one more dip, so it’s best to be patient. Now that Mid Week Wednesday is complete, we have to be cautious that this range trading was not the highs being put in for the week.

The trading range of 1644-1666 is still in play but the first close above or below will indicate which side the market favors next. IF we get a push to 1600 on Thursday or Friday, it should provide the short term cycle low. Watch that trading range and let's see which way it wants to move. The downside still has the advantage.

01.00 A.M GMT

Gold made a modest advance today, regaining some of the ground lost from the prior day’s selloff as bargain hunters snapped it up at cheaper prices.The yellow metal added $3.30, to close at $1,650.30 an ounce.

Gold is likely to remain range bound this week with nothing much to move it. With light volume, few market-moving headlines and reports on the horizon, and no “fear-trade out of Europe,” gold should remain flat.

It was a surprising day, usually when Fed Chairman Ben Bernanke speaks or testifies markets go crazy, he has a way of moving the Gold markets like a puppet master.

While the reduction in financial stress in Europe is a welcome development, more needs to be done to fully resolve the crisis, says top U.S. central banker Ben Bernanke. Treasury chief Tim Geithner’s also to deliver congressional testimony.

Economic Events schedule for March 22, 2012

09:00 EUR French Manufacturing PMI

09:30 EUR German Manufacturing PMI

10:00 EUR Manufacturing PMI

The European, French, and German Manufacturing Purchasing Managers’ Index (PMI) measure the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

10:30 GBP Retail Sales (MoM)

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.

11:00 EUR Industrial New Orders (MoM)

Industrial New Orders measures the change in the total value of new purchase orders placed with manufacturers. It is a leading indicator of production.

13:30 USD Initial Jobless Claims

13:30 USD Continuing Jobless Claims

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.

17:00 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.

March 21

11.00 A.M GMT

The focus returns to Europe once again with investors have their eyes focused on the United Kingdom and the budget announcement expected at 12:30 GMT today, with expectations the Chancellor of Exchequer might present new adjustments to budget including a tax-cut targeting those who earn more than 150,000 pound annually.

Gold is fluctuating heavily ahead of U.K.'s budget announcement and also ahead of the Bank of England Minutes, where investors will be tracking whether Adam Posen and David Miles are still calling on other lawmakers to expand the capacity of the assets purchases program (APF) or any of the Monetary Policy Committee members joined them and responded to their calls.

However, the main focus as mentioned we earlier will be on 2012 budget-announcement, where markets are wondering how British lawmakers will allocate government spending and adjust the budget to balance between boosting growth and trimming deficit.

With the lack of major fundamentals from Europe and the world's largest economy today, the United Kingdom pulls all the attention, where in terms of critical economic data; the royal economy will provide markets will government debt figures today, where the report consists of public finance, PSNB ex interventions and the public sector net borrowing figures are expected to reflect surplus in February, especially when the exchange rate of the sterling pound almost settled after the incline seen in January.

In general, we expect metals to remain volatile during the session today, with expectation gold might rebound to the upside in case optimism returned to European markets once again after the United Kingdom budget announcement and also after the Bank of England Minutes.

08.00 A.M GMT

Gold attempts now to settle above the main resistance of the downside movement, but at the same time the metal doesn’t provide stability above the critical EMA 20 at 1656.00. Stochastic attempts to confirm the positivity by trading above the 50-point level, but RSI is still stable below this level and provides no signs of positivity. Therefore,

we remain neutral today

due to the high risk associated to our expectations.

Support: 1650.00, 1638.00, 1629.00, 1624.00, 1610.00
Resistance: 1656.00, 1662.00, 1673.00, 1681.00, 1688.00
Recommendation Based on the charts and explanations above, we remain neutral awaiting more confirmations

01.00 A.M GMT

GOLD has carved out wide swing patterns yesterday and overnight before eventually finishing near the bottom of the multi-days trading range of 1634-1666 at around 1650, extending the sideway movement for the 5th session. While gold's weakness yesterday was largely in response to a strengthening USD index as the price of 10 year US treasury is set to fall for the 10th consecutive trading day indicating higher interest rate prospects for the greenback, the lacklustre demand for gold is also seen in a 56,000 ounces reduction of holding in the world's largest ETFs. We have seen much more change of tones recently in regard to the gold prices prospect from bullish on a variety of reports, showing market players disappointment in seeing gold underperform compared with other commodities and the equity market. Traders still need to look out for the trading range of 1634 to 1666, a break on the downside of which could give the precious metal another bearish run.

As worries began to surface over a slowdown in China, commodities including Gold began to tumble. Gold moved in step with weakness in global stock markets and lower commodity prices, as concerns about a slowdown in China flare up. Over the past two weeks Chinese economic data has been mostly negative and the Chinese PM announced that China was revising their growth rate for 2012 to 7%.

Economic Events March 21, 2012
10:30      GBP       MPC Meeting Minutes
The Monetary Policy Meeting Minutes are a detailed record of the Bank of England’s policy setting meeting, containing in-depth insights into the economic conditions that influenced the decision on where to set interest rates. The breakdown of the MPC members’ interest rate votes tends to be the most important part of the minutes.
13:30     CAD Leading Indicators (MoM)
The Leading Indicators Index is a composite index based on 10 economic indicators, that is designed to predict the future direction of the economy. The report tends to have a limited impact because most of the indicators used in the calculation are released previously.
15:00     USD      Existing Home Sales
Existing Home Sales measures the change in the annualized number of existing residential buildings that were sold during the previous month. This report helps to gauge the strength of the U.S. housing market and is a key indicator of overall economic strength.

March 20

04.00 A.M GMT

Look for gold’s first resistance area to be 1666-1676 on Tuesday. If successful, a test of up to 1675 and potentially 1685 could come into play. Since the short term cycle window is open, a trend change is due this week. The ideal date is the 22nd (plus or minus 72 hours). On the downside the 1635-1644 area is support but the 1651-1655 area is also a price point that price is trying to find support.

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 Tuesday
Initial Resistance for 1665-1675 and 2nd tier 1685-1692
Initial Support 1625-1644 and 1605-1612
In last night’s update resistance was listed 1665-1675 and the high was 1669. Support was listed at 1625-1635 and the low was 1651.

RECAP

We Favored a bounce to the 1665-1675 area on Monday and price reached 1669 during the New York session. Gold has had declining open interest, lower volumes and the 200-day moving average (1683) looks to be an important resistance area. Today’s bounce suggests that the 50-week moving average (1656) could potentially be attempting to establish support on a closing basis. In fact, gold traded below this average only 4 days in the last 2 years.

Outlook for Tuesday

Look for gold’s first resistance area to be 1666-1676 on Tuesday. If successful, a test of up to 1675 and potentially 1685 could come into play. Since the short term cycle window is open, a trend change is due this week. The ideal date is the 22nd (plus or minus 72 hours). On the downside the 1635-1644 area is support but the 1651-1655 area is also a price point that price is trying to find support.

Short Term – Down
Cycles

the short term cycle turn window is in play and a low is due this week. This price line at 1635 has held the lows so far but we can’t rule out a test of 1600. Price is trying to form support at 1644-1655 – (the 50 week moving average is 1655).

A CLOSE below 1635-1640. So even though there is a low due this week, it doesn’t mean we are done going lower.

What Next?

We were looking for gold to test 1665-1674 on Monday and price got as high as 1669 before pulling back a few dollars. Tuesday and Wednesday’s usually are days where the upside has the advantage. However it will take a move above 1670-1675 to favor higher into Wednesday.
The chart below shows the two black arrows of support and resistance. The red mini line above price is the first spot to watch for resistance as it held resistance today. The lower down trending red dotted line is support. For Tuesday that works out to be the 1625-1635 area.
The lower green highlighted area in the 1645-1654 area is also an area where price is trying to forge some support.

Bottom Line

The trend is still down but short term cycles are due to bottom this week. If we see a set up, we’ll look to take a short term trade. The downside still has the advantage. A close above 1676 will neutralize the downtrend and favor higher into Wednesday. Thus look at 1645-1655 as first minor support at the lower green highlighted area. That will be followed by the down trending dotted red line at 1625-1634 and finally, should we get a hard break lower, the 1579-1605 will be major support on Tuesday. A cycle low is due this week, with the ideal day on Wednesday. A close above 1675 will be the first clue that a potential low has been made. Until then, the trend is still down.

Gold Daily Price Chart With Key Gann line support and resistance points

March 19

04.00 P.M GMT

Watch 1670 on the upside and 1644 on the downside.

Nothing dramatic or critical has occurred in the geopolitical sphere over the weekend, but the tone seems to be a little guarded at the beginning of the week, which might provide an underpin to the gold market following the sharp sell-off last week.
Most of the financial markets are running steady to slightly counter to how they performed last week, nothing remarkable. Asian equity markets were mixed to a little easier overnight, and Europe was slightly weaker. The US stock market looks as if it will open mostly unchanged this morning. Crude and gasoline prices are easier. Bond prices are higher in Europe and the US, and the dollar is up slightly. North Korea announced plans to launch a satellite next month, a move which has been condemned by the UN and the US and has even drawn comment from China. A launch could threaten the US food aid package. Traders will be looking at the NAHP Housing Market Index at 10:00AM EST today. Other housing related data scheduled for later this week include Housing Starts tomorrow and Existing Home Sales on Wednesday.
There are estimates that central banks bought anywhere from 4 to 6 tons of gold bullion on the recent break. Traders are still expressing concern that India's pending increase in gold import duties will hurt physical demand for gold. The trend higher in crude oil and gasoline prices are putting a damper on the recent optimism about the US economy and the stock market's buoyancy of late. It seems that Europe's debt situation is creeping back into the limelight, with renewed concerns that Portugal will become the new Greece. North Korea's announced rocket launch is also raising geopolitical concerns.
LAST WEEKS big rise in interest rates is beginning to gain interest in all markets. The mass exodus to stocks need to be watched carefully this week as that market looks fully price at the moment.

Gold enters the week in a range where the 1665-1675 area is upside resistance at the red dotted trend line and higher black arrow on the chart. On the downside, the lower black arrow points to the down trending red dotted trend line and is first support for the week at the 1635-1644 area and price is most likely to trade inside this range today. The overall downtrend is still in play but short term cycles are due to bottom this week. The ideal day is Wednesday but overall but there’s always plus or minus a few days. As long as price is below the 1665-1675 area the downtrend is still in play and that’s the upside area to watch today.
On the downside, there are two main area’s to watch today and that is the lower dotted trend line we discussed and the lower GREEN HIGHLIGHTED area which covers 1644-1654. As we discussed on Friday, the trade for the moment is hovering 10 dollars above or below the 1655 price point.
On the upside, the 1665-1675 area is also the key, especially the 1665 area. As long as price closes are below 1665, the downtrend is still in play. We FAVOR A NEW YORK TEST OF THAT AREA today.
IN summary, gold and other markets are quiet so far and seem to be not sure which direction they want to take just yet. Even the stock market is more or less an “APPLE WATCH” as the fate of the stock market seems to rest on the fate of a new IPAD. Just doesn’t sound right to me. The market seems ripe for a short term pullback. Each day it seems to get a bailout just as its correction time. Last week it was the JPM buyback and this morning it’s the discussion on Apple and the dividend discussion.
In summary, gold is in a trading range today and it looks like once again the 1655 area will be the CENTER of trade and the swings averaging 10 dollars on either side. A short term trend change is due this week---but until price closes above 1665 its best to remain cautious. Watch 1670 on the upside and 1644 on the downside. WE TEND TO FAVOR A NEW YORK TEST OF 1665 at some point today.

06.00 A.M GMT
Look for gold to attempt to get above 1665 -1674 on Monday. A failure near 1665-1667 will favor a test of 1644-1651 in early New York trading
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 Monday
Initial Resistance for 1665-1675 and 2nd tier 1685-1692
Initial Support 1625-1635 and 1605-1612

Outlook for Monday

Look for gold to try and break above 1665. That is the key first resistance on Monday. If successful, a test of up to 1675 and potentially 1685 could come into play. Since the short term cycle window is open, a trend change back to up is due this week. The ideal date is the 22nd (Wednesday). On the downside the 1635-1644 area is the favored support point for the day. The 1651 area is also one of interest on a closing basis.

Short Term – Down

Cycles

the short term cycle turn window is in play and a low is due this week. This price line at 1635 has held the lows so far but we can’t rule out a test of 1600. We’ll look for a low to establish itself and as soon as we get some bottoming action, we’ll look for a set-up. A BREAK BELOW THE TREND LINE FAVORS LOWER. So even though there is a low due this week, it doesn’t mean we are done going lower.
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 below 1630 to favor the lower yellow. We’re looking for a cycle low, but we need to see some sort of reversal before we can claim the low is in. Odds favor it will either be this blue dotted trend line near 1640 or the lower yellow at 1605-1612. Let’s see if Monday can hold the channel line convergence.

Gold Price chart with short term cycle turn points

What Next?

Look for gold to attempt to get above 1665 -1674 on Monday. A failure near 1665-1667 will favor a test of 1644-1651 in early New York trading. Another day of range bound trading is the likely scenario. The chart below shows the two black arrows of support and resistance. That red mini line above price is the first spot to watch for resistance. Pullback should be contained at the lower black arrow red dotted line. The lower green support at 1644-1651 is also a candidate for a low.

Bottom Line
The trend is still down but short term cycles are due to bottom this week. If we see a set up, we’ll look to take a short term trade. Favor a trade range on Monday.

Gold Daily Price Chart with Gann support lines

Gold Daily Price Chart with Gann support lines

01.00 A.M GMT
The metal range bound today between 1634 and 1667

GOLD prices were range bound on Friday finishing at around 1660 and just marginally higher than the opening price that morning. Last week we saw the bullion price drop as much as $80 as a slew of positive US economic data and a more optimistic Federal Reserve lowered market expectations of further easing and, surprisingly, strengthened the greenback, before recouping some $25 of the loss as the price failed to penetrate key support levels. The lower than expected monthly core CPI of US that was announced on Friday also checked the upside of the USD thus containing any further fall of the gold price. We won't be surprised to see The metal range bound today between 1634 and 1667 and to remain so for the next few days ahead as a light economic data calendar week could reduce the chance of any large USD movements. Still, our suggestion remains that, for patient traders,

Wait for gold to show further signs of weakness

before taking action.

Daily Gold Fundamental Analysis March 19, 2012

Gold fell to log a weekly loss of 3.3% as mostly upbeat economic data throughout the week lowed demand for the metal but concerns over inflation limited declines. Eventually investors will realize that gold can do well in both a deflationary environment as well as an inflationary environment, and the trend will turn significantly higher.

Minimal data was available in the US today

U.S. economic data showed continued improvement, but with inflationary pressures starting to rise, [the Fed] may not be able to maintain its ultra-accommodative monetary policy for much longer. Today’s U.S. CPI data could prove to be the main catalyst for trade if it rises above the key 3% level on a year-over-year basis.

U.S. consumer prices increased 0.4% in February, owing mainly to the surging cost of gas, the Labor Department said Friday. The government also reported that inflation-adjusted hourly wages, on average, fell 0.3% in February as higher prices outstripped a 0.1% gain in earnings.

The output of the nation’s factories, mines and utilities was flat in February, the Federal Reserve said Friday. This was well below Wall Street expectations of a 0.4% gain.

Consumer sentiment in March declines for the first time since August, as rising gasoline prices cause a downturn in expectations, according to a key gauge released on Friday.

Economic Events for March 19, 2012
01:01     GBP      Rightmove House Price Index (MoM)
The Rightmove House Price Index (HPI) measures the change in the asking price of homes for sale. This is the U.K.’s earliest report on house price inflation, but tends to have a mild impact because asking prices do not always reflect selling prices.
01:01     GBP    Nationwide Consumer Confidence
Nationwide Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.
13:30     CAD      Wholesale Sales (MoM)
Wholesale Sales measures the change in the total value of sales at the wholesale level. It is a leading indicator of consumer spending.

For the coming week

we enter the week with the short term in bearish mode but with the North American Winter Seasonal pullback due to bottom the week of the 21st of March or the week of April 7th. We favor this coming week as a price low. The favored targets for a price low this coming week is the 1605-1612 area or the 1627-1644 area. We will try and hone in on the low when it arrives on the daily page.

The upside is a little more difficult to discern, as there are more resistance points, First resistance is 1675-1688 and a close above that point for more than one day would tilt the odds towards the upside and that the next short term uptrend is underway into the first week of April. The other area of interest is the 1712-1725 area as key resistance on a rally attempt. A close above 1736 would greatly increase the odds that price has regained its uptrend and would favor the “North American Spring Rally ATTEMPT is in play. Odds favor a price low on the 22nd (Plus or minus 72 hours) and a rally attempt to be in play.

The seasonal chart gave us the warning of this correction and once it’s complete, the price data for this bull market shows that the April/May time frame is not the longest rally but it is the ONE THAT IS LEAST CHOPPY and overlapping and the fastest rising. In other words, a trend we want to be on and one that is the easiest to hold on to as the pullbacks are not usually deep.

Thus it is time to refocus on the upside for a 45 to 60 day period as soon as this correction ends. This coming week --- or that last dip we saw at the 1637 area has us very close to “the” low for the seasonal correction.

Numbers to watch this week
On the downside, support resides at the 1561-1575---1600-1606---and the 1637-1644 area on a medium term basis.

As to exactly when the seasonal low takes place is a lot like saying when spring or summer begins. During a hard cold winter, spring weather arrives late by a few weeks. During a mild winter, spring weather arrives early. It is much the same way with the seasonal. In other words, there’s a standard deviation of time depending on the strength or weakness in the market. During an average season the low for the seasonal will be the week of March 21st or if you’d rather the week of the spring solstice.

I offer you the chart below as a curiosity. A curiosity that is if you’ve not studied the works of Gann and a few others. The Green highlighted areas are the four seasons of the year. Look how all the major moves and lows or highs of significance occurred during the week of the seasonal changes ---Mar 21st---June 21st ---Sept 21st and Dec 21st ---every major low last year was at a seasonal change and so was every hard price drop. Once again gold has reacted in the same manner as we move into the week of the spring solstice this coming week.

This chart highlights the 1570-1605 area as a price low potential. But it also shows us that since this correction is on a long term time frame, the entire pink range on the chart below cannot be excluded as a price correction if we have a close below 1570. We don’t favor it, but we will not eliminate it either. Be sure to read our MEDIUM TERM report which discusses the interest rate scenario and the price points to watch. The charts show how gold has been correlating with interest rate movement.

APRIL AND JULY/AUGUST

are the best times.

When price is at the lower channel lines during the SEASONAL LOWS --- you want to strongly consider ADDING POSITIONS TO LONG TERM HOLDINGS. This is the time to do it, when price is low. But how low can it go?

Now that we know WHEN the best buy points are during the year (APRIL and JULY/AUGUST)
what we want to do is check the chart to see WHERE we should be buying.

At the moment the price points to add to long term holdings are listed below. They are by far our best view of where the two price lows for the year can occur. There is not BETTER PROJECTION that the chart itself. And the least arbitrary technical tool is the price channel because PRICE ITSELF is the input. If you’re a long term investor --- you have four buy points right now in 2012 and they are listed below.

Buy considerations are right NOW at 1637 and at 1580, 1400 and 1320. Thus whatever you want to allocate for 2012 you should put 25% of it to work right now in gold. If you are a long termer, you’ll add only as much right here where you’ll be comfortable to add at the other three points.

There are four buy points for gold---1637 – 1580 – 1400 – and 1320. There are two optimum TIMES to buy---April and July/August.

The depth of this correction will depend on how high interest rates rise.

Gold Weekly Price Chart with long term channel lines of price support and resistance

We think the scenario will be that gold bottoms here next week or two weeks from now and the North American Winter Correction will be over and the “Spring Rally” will come into play.

Gold and the seasonal turns

When winter, spring, summer, and fall begin, it’s the 21st of March, June, Sept, and December. The chart below shows the price of gold and I’ve highlighted the areas where the big moves or important lows and highs have occurred. It’s fascinating how those green highlighted areas are the week of the seasonal solstice and equinox turns. Once again, we are at a point where gold stands to make a potential major low as the spring solstice arrives.

While the seasonal was a big factor in the analysis, I usually keep my eyes on the seasonal changes that occur. Some years, gold arrives a bit early or a bit late. But for the past six quarters, a major price point has occurred right on the week of the seasonal solstice and equinox weeks.
Once again we are at the MEDIUM TERM seasonal next week and gold is arriving at an important price support zone on the charts. Since it’s a medium term view, there is a standard deviation of 2.5 weeks on each side where about 75% of the turns should occur. The seasonal price chart we looked at earlier shows the best time to

Buy gold is in April and again in July/August.

Since we are at the time and since price is at the lower end of the trend lines, long term accumulation in this area is a strong consideration to add some if you’re a long term investor.

The thing we want to look forward to now is what usually happens in April and May. We say usually because there are no absolutes. The data shows that the April and May time period is usually a strong period for Gold and average expectations should be for about a 10% price move to develop as soon as the current seasonal pullback ends. So now we want to focus on the upside over the next two months. If the rally is weak, we’ll know there is still the potential for a final low in July/August. With the Armstrong turn point due the first week of June, and if we get our North American Spring rally, the target for a peak will be the Last week of May or first week of June.

To everything there is a season---even Gold

Next week will be the first change of season for 2012. And it may sound strange to you, but gold (like all commodities) have a pattern for each season. While the actual change of season will take place on March 21st on the calendar, each season fluctuates as to its start date. For example, we had a very mild winter in Northeastern USA. One of the mildest I’ve ever witnessed. So while Spring officially starts on the 21st, in reality, spring arrived early, very early.
I’ve seen the opposite also. Some winters never want to end and it stays cold until May. At the extreme, there is about a maximum variance of about 2 and ½ weeks---maybe three weeks on either side of March 21st where winter ends and spring begins. But it ALWAYS begins. The 21st of March is the official date as that is when the Earth’s northern hemisphere’s side of the equator.
For some reason, the speculator or analyst inside of us is always looking for EXACT DATES to put our cycles in. And if they are not exact, they are dismissed as a hit and miss sort of thing or that cycle doesn’t always work. As we have demonstrated with the season’s changing, the market cycles are the same. They have a deviation. And that deviation is affected by the VELOCITY extremes that occur. In other words, a strong trend will end late and a weak one will end early. And that is just like a cold winter that ends late or a mild winter that ends early. Thus the cycle is tossed to the side as unreliable.
we are in the market to make money, then we have to follow the trend. THERE IS NO OTHER METHOD that can make money. Even if you’re a 5 minute trader, the “trend” has to be with you in those five minutes to make money. There is no escaping it. That is why it is the most important rule in trading and is often referred to as the trend is your friend. By keeping our focus on “what usually happens” we avoided being long on trades and once this seasonal ends,

it will be time to add a bit of gold for longer term holding.

Government Bond Auctions (this week)
Mar 19 n/a Greece CDS Auction
Mar 19 10:10 Slovakia Bond auction
Mar 19 10:10 Norway T-bill auction
Mar 20 09:30 Spain 12 & 18M T-bill auction
Mar 21 10:10 Sweden Nominal bond auction
Mar 21 10:30 Germany Eur 5.0bn Mar 2014 Schatz
Mar 21 10:30 Portugal Eur 0.75-1.0bn 4 & 6M T-bills
Mar 22 10:10 Sweden I/L bond auction
Mar 22 10.30 UK Auctions 0.625% 2042 I/L Gilt
Mar 22 15:00 US
Announces auctions of 2Y Notes on Mar 27, 5Y Notes on Mar
28 & 7Y Notes on Mar 29

If it is to escape the downward trend in the short term,

it will have to overcome the price resistance

at $1726 per ounce...

only then will it begin moving up again.