April 6
Markets are closed for April 6 ~ Good Friday, No Daily Reports.
NEWYORK Will open on April 09
LONDON Will open on April 10
Gold futures rebounded Thursday after investors bought into metals beaten down in the previous session on dashed expectations of further U.S. monetary stimulus.
Although gold prices may soon bottom if macro hedge funds or other investors sense that the market is becoming oversold, analysts believe that bullion prices rebound only on emerging-market demand or fresh official-sector buying. A gold price drop below $1,600/ounce could attract such buying,
Although gold prices may soon bottom if macro hedge funds or other investors sense that the market is becoming oversold, analysts believe that bullion prices rebound only on emerging-market demand or fresh official-sector buying. A gold price drop below $1,600/ounce could attract such buying,
Gold sank $57.90, or 3.5%, on Wednesday, ending at its lowest level since Jan. 9, while silver sank 6.7%, closing at the lowest level since mid-January.
The losses followed market disappointment that the Federal Reserve is unlikely to launch a third round of liquidity-boosting asset purchases.
Thursday’s gains, however, also came as some analysts said the Fed’s policy remains accommodative enough to support gold prices, even in the absence of further easing.
“Policy is already ultra-accommodative by conventional monetary standards and therefore gold-friendly. This may be overlooked or underestimated in the current selloff, we believe,” HSBC analyst James Steel wrote in a report.
April 5
05.00 P.M GMTGold Trading Higher as Euro Slumps, India
Tightens Import Controls, Vietnam Bans Monetary Use
PRECIOUS METALS rallied from yesterday's late 3-month lows in London on Thursday, with Gold Trading 0.7% higher vs. the Dollar as stock markets fell with energy prices.
Silver rallied 2.2% from Wednesday's bottom, but remained one-third below the 3-decade peak near $50 per ounce hit at Easter 2011.
The single Euro currency meantime slid near $1.3050 this morning - down 3¢ for the week - after Wednesday's weak auction of new Spanish debt was followed today by news of a sharp decline in Germany's industrial output.
Losing 1.1% against Gold Bullion on Thursday, the Euro also dipped briefly through CHF 1.20 - the floor set by the Swiss National Bank last September, and defended by selling Francs to buy Euros in a bid to prevent the currency-zone's debt crisis further hurting Switzerland's export-heavy economy.
Going into the long Easter weekend - which will see London's wholesale Gold Trading market closed until Tuesday - Spanish bond yields jumped again, erasing the dip seen since the European Central Bank began lending Eurozone banks more than €1 trillion in December.
The Dax index of German stocks today slid 0.9%, extending this Easter week's losses to 3.2%.
Bullion-market analysts and professionals Trading Gold have "turned bearish for the first time this year," according to Bloomberg's latest weekly survey.
"Fifteen of 29 analysts surveyed by Bloomberg expect prices to decline next week and five were neutral," says the newswire, "the highest proportion since Dec. 30."
The last week of Dec. 2011 saw gold hit a 5-month low and begin a 17% rally over the following 9 weeks.
"We would not be surprised to see a move down in gold," says a note from bullion-bank Scotia Mocatta, "but as concerns about Europe's debt are resurfacing, the downside may be limited and safe-haven buying may soon return with vigour."
Over in Vietnam meantime, and "after a few dozen drafts" reports TuoitreNews.vn, "the final decree on the management of Gold Trading activities, a very important document with a strong influence on the domestic gold market, has been signed by the Prime Minister."
Hanoi's new decree brings together Vietnam's piecemeal controls on gold trading of 2011, banning the use of gold as money, such as making large payments in real estate deals, as well as manufacturing or Trading Gold without the requisite licenses.
Across in India - the world's No.1 private gold consumer, where a 3-week long strike by jewelers protesting against a series of tax and duty hikes turned violent on Monday, with protesters clashing with police in Mumbai and disrupting trains in Ghaziabad - commercial banks now have to submit a raft of new monthly and twice-annual reports to the Reserve Bank of India stating the volume and value of their Gold Bullion imports.
"We all know that gold is a deep-rooted part of our cultural heritage," says Mehul Choksi, chairman and managing director of Mumbai-based Gitanjali Gems Ltd.
"[Gold] also serves as a highly liquid form of savings and a hedge against inflation, having appreciated much faster than other asset classes.
"Naturally, we cannot expect this demand to suddenly disappear. And, since India produces virtually no gold, demand has to be met entirely through imports - legal or illegal!"
“The four per cent duty might be perceived as an irritant," counters T R Rustagi, former joint secretary of the Central Board of Excise & Customs, also writing in the Business Standard. "But arguably it cannot be the cause for smuggling.
"Its avoidance may not be lucrative enough for smugglers to take risks," says Rustagi, contrasting today's 4% duty with the 15% in place when India repealed its Gold Control Act, liberalizing the legal import of Gold Bullion in 1990.
"We have no choice but to cooperate with the union," says a Bangalore jeweler, speaking to DNA. "If we go against them and face problems later, we will be ostracised."
Private reports reaching BullionVault here in London, however, say that gold items are widely available for sale in Mumbai.
"We are expecting [finance minister] Pranab Mukherjee to offer a feasible solution very soon," says Bacchraj Bamalwa, chairman of the Gems & Jewellery Federation of India, warning that 1,000 crore Rupees in Gold Trading - equal to some $200m - is being lost by the industry each day.
India's second-largest jewelry business by stock-market capitalization, Gitanjali's share price has dropped 20% on the BSE since hitting a four-year high in early Feb., just before the new ad valorem import duty on Gold Bullion was doubled to 4%.
Reports from the Bombay Bullion Association said this week that gold imports to India have fallen by one-half so far in 2012 from the start of 2011.
04.00 P.M GMT
Look for a trade range of 1625-1635 area today in gold.
Gold is bouncing today from an important price support area. The weekly chart shows the lower green channel line has been support in this market ever since the 2008 lows. The 1575-1610 area in spot gold should then offer very important resistance. This area is one of the two key price zones where a yearly low has potential. We still think that there is an April uptrend that will develop in the metals.
Resistance for the remainder of the day is the 1634-1637 area and support is the 1624-1627 zone. Price should remain in a trading range as many market participants are already gone for the weekend as markets are mainly closed tomorrow. LOOK FOR VOLUME and price swings to go to a crawl on any Friday trade as most markets will be shut down.
02.00 A.M GMT
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---We await the spring seasonal to kick in, the ‘trend’ has not turned up yet on an intermediate term basis.
Short Term= Down– Short term cycles have a mixed outlook. (See both charts below)
Support and Resistance for Thursday
Initial Resistance for 1627-1636 and 2nd tier 1655-1661
Initial Support 1605-1611 and 1570-1587
RECAP
The spillover from the FOMC minutes from yesterday continued in the markets today as equities, metals and oil were down sharply. While the market is focused on the latest statement from Bernanke and the FED, reports of huge sell orders once again was highlighted. An unexpected 8 million barrel increase in Crude oil inventory didn’t help either.
We have been on the record that the only thing that can squeeze gold down on a medium term basis is a liquidity squeeze.
While the markets have been focused on the FOMC minutes, the situation in Europe is once again coming to the forefront and this time it’s Spain. This excerpt below is from
John Mauldin’s outside the box daily update:
Spain had its own housing bubble, in most ways worse than that of the US. In 2006, the Guardian wrote that 50% of new EU jobs had been created in Spain during the previous five years. But in 2011 housing starts were down by 94% and new mortgages by 81% (IMF, 2011). The IMF notes that "The stock of unsold units may take around another four years to clear. The lowest estimates of the stock of unsold units are at close to 700,000 units, with considerable regional variations but with a downward adjustment that has only started at the end of 2010. These only include newly completed units, and do not fully include units repossessed by financial institutions, unsold secondary market houses, or unfinished units."
The Wall Street Journal suggests the number may be more than double that:
"Some 1.5 million unfinished, unsold or unwanted residential units stand scattered across the country, products of a still-deflating housing bubble that threatens to undermine Spain's broader economy for years to come.
Let's put that in context. The US has about 6.5 times more people than Spain. There are 2.43 million existing homes for sale plus shadow inventory in the US, estimates of which vary. Using the WSJ number, this would suggest Spain has the equivalent of 15 million-plus homes for sale. That in a country where unemployment is more than double ours and where population growth and household formation is certainly slower than in the US. Only Ireland can rival Spain for the largest housing bubble.
The number of homes being foreclosed on is estimated to triple in Spain. About 120 evictions take place every day. Those who default on their mortgages cannot walk away from the debt, as in the US. A story is out tonight about one resident who lost her job and is being foreclosed on. She will still owe over about half her debt, or more than €100,000, plus court costs and penalties.
From the Huffington Post:
"If the bank manages to sell a foreclosed home, that amount is struck off the remaining debt. But the norm these days is that the property is put up for auction and nobody bids. That has meant the bank then takes over the house for just half it’s originally assessed value, and wipes the amount off the remaining debt – leaving the borrower still owing a bundle. The legislation passed last week raises the proportion the bank has to effectively pay in the event of non-sale to 60 percent."
Home prices have fallen just 10-20%, as banks cannot afford to write down mortgages (more on that later). Realistic estimates assume a 40-50% total drop is more likely, and anecdotal evidence suggests it could be even more if the economy does not recover soon. And as we will see, that is going to be tough.
Graham Summers adds this:
According to the IMF, European banks as a whole are leveraged at 26 to 1 (this data point is based on reported loans… the real leverage levels are likely much, much higher.) These are a Lehman Brothers leverage levels.
The European Banking system is over $46 trillion in size (nearly 3X total EU GDP). The European Central Bank’s (ECB) balance sheet is now nearly $4 trillion in size (larger than Germany’s economy and roughly 1/3 the size of the ENTIRE EU’s GDP). Aside from the inflationary and systemic risks this poses (the ECB is now leveraged at over 36 to 1)
Over a quarter of the ECB’s balance sheet is PIIGS debt which the ECB will dump any and all losses from onto national Central Banks (read: Germany)
So we’re talking about a banking system that is nearly four times that of the US ($46 trillion vs. $12 trillion) with at least twice the amount of leverage (26 to 1 for the EU vs. 13 to 1 for the US), and a Central Bank that has stuffed its balance sheet with loads of garbage debts, giving it a leverage level of 36 to 1.
And all of this is occurring in a region of 17 different countries none of which have a great history of getting along… at a time when old political tensions are rapidly heating up.
As bad as the above points may be, they don’t even come close to describing the REAL situation in Europe. Case in point, regarding leverage levels, PIMCO’s Co-CIO Mohammad El-Erian (one of the most connected insiders in the financial elite) recently noted that French banks (not Greece or Spain) currently have 1-1.5% capital relative to their assets, putting them at leverage levels of nearly 100-to-1.
www.marketwatch.com/story/sovereign-debt-spiral-seen-imperiling-europe-2011-09-23?pagenumber=2
And that’s France we’re talking about: one of the alleged key backstops for the EU as a whole.
To be clear, the Fed, indeed, Global Central Banks in general, have never had to deal with a problem the size of the coming EU’s Banking Crisis. There are already signs that bank runs are in progress in the PIIGS and now spreading to France (see El-Erian’s comments in the article above).
Outlook for Thursday
First resistance on Thursday is the 1627-1635 area and support is the 1587-1611 area. Look for a price low and a bounce into Friday trading. Look for a range bound type of day with tests of both support and resistance.
US Dollar – uptrend has not yet broken down
The US dollar rallied again on Wednesday. As we discussed earlier this week, the trend is still up but it needs to be watched carefully. Once again price is touching the long term channel line and price is still above the moving averages on a daily and weekly basis. This is another key price point for the US Dollar.
Short Term – bearish
Cycles –
Tonight we’re going to present two different cycle charts. This first chart is in line with a peak here and a continued downtrend to mid April. However this area is one of the two major support areas on our charts for this year and the potential for gold to hold near this area is a significant consideration. Let’s look at another view of the cycles on the next chart.
Cycles – Alternate look
Before the bull market can return, the blue cycles must be where the price lows are made on the chart. This has kept us from making the mistake that many others have by calling the correction is over “word.” Since the August peak, we have held that in reserve. This next chart takes a look at the possibility---and we say possibility because it is another cycle scenario we are looking at that has peaked our interest.
It is interesting indeed that the new price low is coming due within the short term cycle window of April 6th (plus or minus 72 hours). On the chart below, I’ve reversed the cycles and have put the red on top and the blue on the bottom. As you can see, the potential is there for a cycle inversion. If we were to get an inversion, then the low should be established between now and Monday. The current price area is one potential support point on the chart and one worth watching as it is everybody’s head and shoulder pattern.
What Next?
We enter Thursday in short term bearish mode and still bearish on the intermediate term. Today’s 1612 low was near an important longer term price channel line so we’re going to be on the watch for some bottoming action to take place sometime during Thursday. At the moment, the cycles can go either way so we’re best to keep the powder dry.
The chart below shows the current situation. We have major support coming in around 1570-1600 in spot gold. This is the next support area to watch for if this final dip in price extends. Maximum downside looks to be the 1560 area on Thursday. This 1600 area is also a candidate. The one thing that is for sure is the trend is still down. Until we move above that dotted red channel line (which was the high for the week) the trend will remain down. Friday looks to have resistance in the 1627-1635 area and support at 1587-1605.
April 4
05.00 P.M GMT
We are featuring the gold weekly chart today. The lower green channel line is the next key support and is currently near the 1600 area (give or take 20 dollars). Price favors a test of this trend line and potentially will break it just enough to trip up the stops that are resting there. For now, it’s best to be patient. All trends except the long term are down at the moment.
The key event this week on the chart was the failure at the moving averages and the 1680 we’ve been watching on the website. The next logical target then is that lower green channel line. The other thing to keep in mind is that the next long term trend line is not until the 1400 dollar area. With the development and failure at 1680, the potential for the 1570-1600 area to be tested now comes into play. It’s best to remain defensive as a washout event looks to be in play in metals.
The key event this week on the chart was the failure at the moving averages and the 1680 we’ve been watching on the website. The next logical target then is that lower green channel line. The other thing to keep in mind is that the next long term trend line is not until the 1400 dollar area. With the development and failure at 1680, the potential for the 1570-1600 area to be tested now comes into play. It’s best to remain defensive as a washout event looks to be in play in metals.
Support for the remainder of the day
is the 1596-1608 area and
resistance is the 1630-1635 area.
is the 1596-1608 area and
resistance is the 1630-1635 area.
01.00 P.M GMT
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 looks complete – spring rally is next, BUT the ‘trend’ has not turned up yet on an intermediate term basis.
Short Term= Down– Short term cycles look to be peaking early this week. Support is now 1635-1639 – any move below 1635 spot favors lower to the 1600-1620 zone
Support and Resistance for Wednesday
Initial Resistance for 1654-1664 and 2nd tier 1676-1681
Initial Support 1635-1641 and 1605-1625
Gold Is Manipulated (But That's Okay)
BY CHRIS MARTENSON PHD
The price of gold is being actively managed by central planners and their proxies. The main culprit here appears to be the US authorities, as the manipulation is most apparent in the US open gold market. For the most part, this 'management' has resulted in letting the price of gold rise, but not too much, or too quickly.
The price of gold has always been an object of interest for governments and central bankers. The reason is simple enough to understand: Gold is an objective measure of the degree to which fiat money is being managed well or managed poorly.
As such, whenever paper money is being governed poorly, the price of gold becomes an important barometer. And this is why the actual price of gold is a strong candidate to be 'managed, influenced or manipulated. Whichever word you prefer, they all convey the same intent.
Some who are reading this are likely having an eye-rolling moment because they hold a belief that there is no conspiracy to manage the price of gold.
This is an interesting belief to hold because it runs heavily against the odds. It's similar to holding the belief that the house in Vegas does not have a statistical advantage.
We could spend a lot of time discussing how a belief such as 'gold is not being manipulated' gets promoted and inserted into the popular consciousness, but we won't. Instead, we'll simply note that the people who hold this belief -- and you may be among them -- react to the concept at a visceral level, often with strong emotions such as anger or contempt, and even anxiety.
When a strong emotional response surfaces during a conversation of ideas, it usually means that beliefs are in play -- neither facts nor logic. Experience has taught me that when someone becomes dismissive or angry or hostile when the idea of price manipulation is discussed, it's best to simply drop the conversation and move on. No combination of logic or facts is effective against a deeply-held belief. It's better to wait until some new evidence calls that belief into question, opening the door for revisiting the topic.
But for those with an open mind, there is a very interesting trail of dots to connect.
The Logic of Gold Price Management
Unlike beliefs, opinions can be discussed and even modified without first running through an emotional thicket. They rest on data and ideas that can be consciously accessed and are therefore easier to change.
It is my opinion that the price of gold is being actively managed and/or overseen by official parties. On a strictly qualitative level, I hold this opinion because if I ever found myself in charge of a system of money rooted in confidences, as is our current fiat regime, I would consider the active management of the price of gold one of my fiduciary responsibilities.
Gold is an important signaling mechanism, and our entire money system is faith-based. Of course anything and everything that could cast doubt on that system would be controlled if it could be controlled.
To emphasize the point: If gold were suddenly to spike up to $5,000 an ounce, all sorts of troubling questions would emerge for people. Such as, is there something wrong with the dollar? Is the world falling apart? A rapid spike in the price of gold would certainly cause people to question the current state of the world of fiat money, and that is an unpardonable sin when your money is, at root, faith-based.
Instead of asking why do you think the price of gold is controlled? I ask, why do you think the price of gold is NOT controlled?
01.00 A.M GMT
Market should not go lower than 1637 - 1630
After this move down it should go up to 1663 - 1671 area.
April 3
11.00 P.M GMT
GOLD had a choppy session and traded between $1670 and $1680 before plummeting $30 easily falling through a relatively important support of 1645 without any significant rebound. All eyes were on the Fed minutes which poured water on market expectation of any further QE by indicating that only 'a couple' of members thought additional monetary stimulus might be needed to support the economy if it loses momentum or inflation remains too low for too long. Our suggested strategy of longing stock markets versus gold has worked extremely well as the tone changed from January when most members were more dovish. The US index has sky-rocketed, while the Dow Jones is only a touch lower. The fact that no significant rebound is seen after such a large price movement in USD's trading counterparts could indicate further strength in the USD in the medium term to come.
Gold resistance for Tuesday is the 1686-1696 area
and support is 1655-1663
SPOT GOLD closed higher on Monday and the highrange close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning neutral to bullish signalling that sideways to higher prices are possible nearterm. If it renews the rally off March's low, the reaction high crossing is the next upside target. If it renews the decline off February's high, the 75% retracement level of the DecemberFebruary rally crossing
is the next downside target.
is the next downside target.
GOLD drifted lower in the last Asian morning following a broadly retreating Asian equity market before shooting up and opening this morning at 1677 on the back of upbeat US factory output data overnight,. Gold recorded a trading range of 1662 to 1683 yesterday. Daily chart have shown traders a month-long wedging shape, as gold price movement becomes less and less volatile and gravitates toward 1675 where the average trading price for the month appears to be. We maintain our view of a neutral bias towards the yellow metal at least until it moves out of the tight trading ranges. Gold's yet another sub-1% movement in face of a plethora of data releases including manufacturing and employment in the US and Europe again suggests tepid market
interest in the hard commodity.
Look out for support at 1662 and resistance around 1683 for today.
April 2
04.00 A.M GMT
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 looks complete – spring rally is next. The ‘trend’ has not turned up yet on an intermediate term basis.
Short Term= Neutral– Short term cycles look to have bottomed --- support is now 1644-1650
Support and Resistance for Monday
Initial Resistance for 1676-1684 and 2nd tier 1692-1696
Initial Support 1659-1663 and 1645-1655
RECAP
Gold had a deep pullback last week back to the 1645 area before a Thursday bottom and rally into the Friday close at the 1670 area. This leaves gold in a neutral short term range and a close above 1694 is the first minimum target gold needs to achieve to increase the upside potential for this week.
Outlook for Monday
First resistance on Monday is the 1776-1683 area and then 1694-1704. One of these two areas should provide the highs on Monday. On the downside the 1659-1667 area is first support. Since it’s the start of a new quarter, price might stay in the above trading range as the market gets itself set for the new quarter.
What Next?
We enter Monday in neutral mode on the short term and still bearish on the intermediate term---so there’s still one more PUSH HIGHER NEEDED to gain the upside advantage.
We’re really in neutral zone here but Monday looks like a trading range in the 1655-1675 price zone. We’re still in favor that the low on the 22nd (our ideal day for a low this month) is still in play. However, if we close below 1644 in spot, then we have to REVISIT the outlook.
The chart shows that red down trending dotted resistance line has so far held price in check. That line crosses around the 1675-1678 area on Monday and will be first resistance. Now we need to get above the middle green area and the DOTTED RED LINES next. Since we have not broken the downtrend yet, we need to remain cautious just a bit longer until we get above those red dotted lines at 1676 and 1694 in spot gold (Add 2 dollars for June).
Bottom Line
Price held where it had to and now we need to get above 1675 and close the week above 1694. That is the minimum needed for price to forge a rally attempt into week’s end.
Sentiment, seasonal, and short term cycles still favor higher. A close below 1644 would cause a re-evaluation of the situation.
Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
King Regards.
