100% BONUS UP TO $600
June 8
12.00 PM GMT
It should try higher up to 1605
After this rise,a correction is expected.
Supports / ResistancesRes 2 1,616.7300
Ex-High 1,594.7200
Res 1 1,605.4900
Pivot 1,583.4900
Sup 1 1,572.2500
Ex-Low 1,561.4800
Sup 2 1,550.2500
4.00 PM GMT
At the overnight low, August gold had given up a large portion of the sharp run up forged since the end of last week. Not surprisingly gold, equities and a host of commodity markets were discouraged by the lack of definitive action from the US Fed Chairman yesterday. While gold could have benefited from a dovish Fed statement overnight from the Fed's Evans, the bulls apparently aren’t going to be easily revived. With global equities under pressure and the Greenback back in favor, it is not surprising to see a risk off environment back in place to start the last trading session of the week. More than likely, gold won't see much of a reaction to the US Trade Balance report. While there could be some headline flow from an American Bankers Association meeting and from a speech from the IMF Managing Director, the attention of the markets might be expected to remain focused on Spain until the European equity markets close. Unless some official statement from the EU alters sentiment, it would appear as if the bear camp is set to start with an edge today.
Chinese stocks were weaker again overnight, with some measures posting the biggest weekly losses in six months. Apparently investors and traders in China took the surprise Chinese rate cut as a sign that more negative economic news will be seen directly ahead. European equities were also weaker overnight, as the trade remains concerned over the situation in Spain, especially after a credit ratings change overnight. Rumors overnight are now suggesting that Spain will make a formal request this weekend for more funds. Early US equity market action is also weaker again, as trouble in the Euro zone, residual slowing fears from the US and a lack of definitive direction from the Fed this week has left investors unsettled. However, with another Fed member overnight suggesting that the US was in need of additional easing, a portion of the negative international economic vibe was tamped down. On the other hand, the US economic report slate today somewhat thin with Trade Balance and a wholesale trade figures due out. Therefore, the focus of the markets might remain on Spain and their potential weekend request for funds.
Further enforcing that scenario is the impulsive action from the top and 80 downside crunch in less than 24 hours. Once again price is testing the YEARLY JAN 2nd 2012 PRICE RANGE of 1561-1571 as we hit 1562 on the lows last night before the bounce. THE 1561-1571 IS THE YEARLY PIVOT POINT and has been severely tested in May when we got those 1530 price probes and subsequent bounces back above 1561 to hold on a weekly closing basis. On the short term chart in just 16 hours gold is once again on the ropes and fighting for its last grasp of any UPTREND and quite frankly, the action at the moment has a hard 5 wave pattern down --- and a weak rebound. While there are no absolutes, just odds---- those odds are not on the short term bullish side of gold and it won’t take much more to TANK this market. Any rebound back to 1592-1600 might be a strong consideration for longs to stand aside. We’re at the last short term uptrend line ----- and there is a minor line in the 1550-1555 area but it is not a lot for gold to hang hopes on.
Chinese stocks were weaker again overnight, with some measures posting the biggest weekly losses in six months. Apparently investors and traders in China took the surprise Chinese rate cut as a sign that more negative economic news will be seen directly ahead. European equities were also weaker overnight, as the trade remains concerned over the situation in Spain, especially after a credit ratings change overnight. Rumors overnight are now suggesting that Spain will make a formal request this weekend for more funds. Early US equity market action is also weaker again, as trouble in the Euro zone, residual slowing fears from the US and a lack of definitive direction from the Fed this week has left investors unsettled. However, with another Fed member overnight suggesting that the US was in need of additional easing, a portion of the negative international economic vibe was tamped down. On the other hand, the US economic report slate today somewhat thin with Trade Balance and a wholesale trade figures due out. Therefore, the focus of the markets might remain on Spain and their potential weekend request for funds.
Further enforcing that scenario is the impulsive action from the top and 80 downside crunch in less than 24 hours. Once again price is testing the YEARLY JAN 2nd 2012 PRICE RANGE of 1561-1571 as we hit 1562 on the lows last night before the bounce. THE 1561-1571 IS THE YEARLY PIVOT POINT and has been severely tested in May when we got those 1530 price probes and subsequent bounces back above 1561 to hold on a weekly closing basis. On the short term chart in just 16 hours gold is once again on the ropes and fighting for its last grasp of any UPTREND and quite frankly, the action at the moment has a hard 5 wave pattern down --- and a weak rebound. While there are no absolutes, just odds---- those odds are not on the short term bullish side of gold and it won’t take much more to TANK this market. Any rebound back to 1592-1600 might be a strong consideration for longs to stand aside. We’re at the last short term uptrend line ----- and there is a minor line in the 1550-1555 area but it is not a lot for gold to hang hopes on.
Market should not go lower than 1551 After this move down it should go up to 1592 - 1600 area.
10.00 AM GMT
Gold declined sharply yesterday after reaching the level of 1641.00. Now, the metal returned to trade below the main resistance of the descending channel that started at the top of 1790.00. But at the same time, we find the metal is still stable above critical areas, which are the levels of 1561.00 and 1552.00. Therefore, we remain neutral after the upside move failed to extend yesterday.
The trading range for today is among the key support at 1510.00 and key resistance now at 1599.00.
The short term trend is to the upside targeting 1945.00 per ounce as far as areas of 1475.00 remain intact with a weekly closing.
Support: 1561.00, 1552.00, 1540.00, 1536.00, 1529.00Resistance: 1573.00, 1579.00, 1582.00, 1590.00, 1594.00
Recommendation Based on the charts and explanations above, we remain neutral awaiting more confirmations
10.00 AM GMT
The gold markets had a positive session on Wednesday as the “risk on” trade came roaring back. This would be predicated on a lot of things, one of the major ones being the fact that Ben Bernanke is testifying in front of Congress today, and any hints of QE3 will send the Dollar much lower, and the asset markets much higher.
The $1,640 level has been one that we have mentioned before though, and the area looks as if it is trying to hold as resistance at this point. The session did see an attempt to get through it, but the action was a bit less than convincing. The candle shows a bit of a pullback at the end of the session, and this suggests that perhaps the market is ready to pullback a bit. The area should offer significant resistance going forward, and unless Bernanke says something to suggest that the Fed is ready to ease again – a lot of weak longs could suddenly cover. The fact that the market hasn’t moved one way or another after the massive shot higher on Friday is interesting, almost as if there haven’t been enough people convinced to buy into the quantitative easing argument for the commodity markets to be taking off. Without a doubt, the next move will be dictated by Mr. Bernanke today.
The next $40 dollars or so is going to be difficult to capture, and as a result we aren’t ready to buy at this level. However, a pullback with supportive action would interest us as long as we can stay above the crucial $1,500 level. The breaking of that level would have us selling this market aggressively as it shows a massive change in momentum and overall attitude in this commodity.
There is no doubt this market is based almost solely on the idea of whether or not the Fed will ease again. The markets are simply is a “risk on, risk off” type of situation now, and the gold futures is without a doubt one of the most telling in this scenario.
8.00 AM GMT
Gold inclined reaching the level of 1640.00 as expected, but then reversed to the downside. This level represents the first extended target of the bullish deep crab harmonic pattern. The metal returns now to trade around 61.8% Fibonacci correction of the CD leg at 1616.00, while consolidation above this level suggests another bullish attempt today . Consolidation above 1599.00 is necessary for our intraday expectations to prevail.
The trading range for today is among the key support at 1599.00 and key resistance now at 1655.00.
The short term trend is to the upside targeting 1945.00 per ounce as far as areas of 1475.00 remain intact with a weekly closing.
Support: 1620.00, 1616.00, 1608.00, 1604.00, 1599.00
Resistance: 1624.00, 1627.00, 1633.00, 1640.00, 1650.00
Resistance: 1624.00, 1627.00, 1633.00, 1640.00, 1650.00
Recommendation Based on the charts and explanations above our opinion is buying gold around 1620.00, targeting 1633.00, 1640.00 and 1650.00 and stop loss below 1604.00 might be appropriate.
It is a triangle configuration. Market should break either side. Acceleration should occur above 1640.78 or under 1613.62 limits.
Gold resistance is the 1633-1642 area on Thursday and then 1672-1680....support is the 1588-1604 area ......
1.00 AM GMT
Gold Prices "Break Above Bear Channel", But Gold "Needs Professional Traders Back" as Euro Banking Worries Spread
Gold Prices hit a one-month high at $1640 per ounce ahead of Wednesday's US session - up more than 7% from May's low - while stocks, commodities and the Euro also ticked higher and major government bond prices fell, with London markets open again after a two-day public holiday.Silver Prices climbed to over $29.50 an ounce - a 3.3% gain on the week so far, and a near 10% rise from last month's low.
"[Gold] is consolidating last Friday's aggressive move from $1546 to $1629," says the latest technical analysis from bullion bank Scotia Mocatta.
Barclays Research meantime note that Gold Prices have broken above its "2012 bear channel", adding that gold has hit "strong demand [in the] "1522-33 area" on downswings over the past 12 months.
"This week there will be plenty of opportunities for gold to either pass the safe haven test or reverse back into its old risk-on shell," added a note from UBS this morning
The European Central Bank announced its latest monetary policy decision on Wednesday, which saw the ECB leave its main interest rate on hold at 1%.
Following Wednesday's ECB decision and press conference, the Bank of England makes its latest policy announcement on Thursday, shortly followed by US Federal Reserve chairman Ben Bernanke's testimony to Congress.
When Bernanke appeared before Congress at the end of February, Gold Prices dropped $100 an ounce in less than an hour.
Back here in Europe, "the ECB might want to wait for further corroborating data to conclude that its second-half-of-the-year recovery expectations are challenged," reckons Royal Bank of Scotland economist Silvio Peruzzo.
"The problem in the Eurozone," adds Steve Barrow, currency analyst at Standard Bank in London, "much more than the US and UK, is that the banking sector is broken. As it fights for its survival, so credit growth to firms and individuals is sacrificed."
"European institutions must open up and help us facilitate bank recapitalizations," said Spanish Treasury minister Cristobal Montoro yesterday.
"The market is no longer open. The risk premium is telling us that Spain as a state has a problem accessing the market when we need to refinance our debt."
Yields on 10-Year Spanish government bonds breached 6.7% last week, and despite easing since remain above 6%.
European leaders agreed last July that the European Financial Stability Facility, the Eurozone's temporary bailout fund set up two years ago, should be able to make loans for the purposes of bank recapitalization, although such loans would go to sovereign governments rather than to banks directly.
Ratings agency Moody's meantime cut its credit rating for six German banks on Wendesday, including Commerzbank, while it also cut its rating for the German arm of Italian bank UniCredit. Three Austrian banks also had their ratings cut.
"Today's rating actions are driven by the increased risk of further shocks emanating from the Euro area debt crisis in combination with the banks' limited loss-absorption capacity," said a Moody's statement.
The European Commission today announced its plans for a resolution regime to deal with failing banks, including "early supervisory intervention" and powers to sell all or parts of banks deemed to be failing.
In addition, the Commission states, "if market funding is not available...supplementary funding will be provided by resolution funds which will raise contributions from banks proportionate to their liabilities and risk profiles."
Opposing the so-called banking union, one German politician today described it as "a new, admittedly creative, way to tap German solvency."
"Our savers cannot be liable [for other countries' banks]," added another, Michael Fuchs, who is a member of Chancellor Merkel's CDU party.
Following a conference call on Tuesday, G7 leaders said they will coordinate their response to the Eurozone crisis.
"[They] said they will speed up their efforts to resolve those problems, which was encouraging to us," said Japanese finance minister Jun Azumi, adding that "Japan is ready to provide support if there is anything we can do."
The Bank of Japan was one of six central banks that took part in a coordinated action on November 30 last year, when the cost of overnight Dollar funding to banks was cut by 50 basis points (0.5 percentage points).
Despite the ongoing crisis, the Euro rallied this morning, at one point trading above $1.25, 1.7% up on last week's two-year low.
Euro Gold Prices meantime hit their highest levels since the end of February, rising to €42,290 per kilogram (€1315 per ounce).
The Gold Price in Euros has only been higher than €42,000 kilograms on 36 previous trading days, first in September 2011 and then again in February of this year.
Over in the US, the so-called speculative net long position held by Gold Futures and options traders on the Comex fell just over 5% in the week ended last Tuesday, data published Friday by the Commodity Futures Trading Commission show.
The spec net long - defined as the difference between bullish and bearish contracts held by noncommercial traders, as opposed to industry players such as Gold Mining companies - fell by the equivalent of 17.2 tonnes of Gold Bullion, hitting its lowest level since December 2008.
Since last Tuesday, Gold Prices have rallied back above $1600 an ounce, following Friday's disappointing nonfarm payrolls report.
"We are positive on gold," says Nikos Kavalis, global banking and markets analyst at RBS.
"To regain traction [though], we need the professionals to go back in."
June 6
4.00 PM GMT
A noted range up extension and upside breakout on the charts from the consolidation in August gold this morning gives renewed bullish interest in gold more credibility in gold. This morning’s move higher began an hour into the London session and up until the Comex New York open gold market off anticipation of easing from the ECB and with that decision made and leaving rates unchanged, there has been a slight pause to the uptrend.
Technical traders are seeing August gold, with the overnight move, has broken out above a down trend channel resistance line on the charts (which we showed on last night’s website update) and price has recently climbed above a 50 day moving average and some might suggest that it is seemingly working its way up toward the 100 day moving average up at the $1,669 level. Somewhat supportive dollar market action might also be contributing to the upward track in gold prices and there is also talk that the US Fed is considering some easing action and that development could add to the bulls existing case.
Dampening the upward track in gold prices this morning is a downward revision in a European GDP reading, reports of increased Asian scrap gold sales and talk of ongoing sluggish Asian demand. In the end, the gold market wants and needs to see one or perhaps two additional central bank easing moves to leave the bulls reassured.
Hong Kong shares managed more short covering gains overnight, while Shanghai equities simply marked time again on the charts. European equity markets were higher overnight off hopes of something positive from the ECB meeting early this morning. Early US equity market action is posting definitive gains as well.
Seeing a downward revision in Euro zone GDP readings overnight keeps the heat on easing and the uncertainty of global markets.
The US economic report slate today is rather thin, with a weekly mortgage application survey due out early, a couple Fed speeches due out during market hours and a Fed Beige Book scheduled for release in the early US afternoon trade. In general, the market is setting itself now for the Fed meeting on Thursday as Bernanke testifies before the senate banking committee.
Gold has reached the weekly resistance area of 1633-1642 for this week. There is an additional resistance point at the 1672 area where the April 27th price failure occurred that is also an important price point on the chart.
The other important element that is occurring in the gold market is the upside breakout of the CHOP CHANNEL that has defined this downtrend since the Feb 29th high. More important is the cycle development we’ve been discussing on the website. Ever since this correction began last year, the blue points have provided the high points and Red the low points. When gold is in a major correction, this is normal. When the lows begin to develop at the BLUE points, it is a sign that the corrections have ended and the bull market is attempting to resume its upward trend. We call it a cycle inversion. There are usually 3 inversions that happen per year and they usually are accompanied by sharp moves as happened in January on the chart. Some of the inversions, as the one in January do not last longer than a month and return to the trend. We noticed this potential inversion pattern the night before the big up day last week, and we have been monitoring it. That big up day of 60 dollars however, has so far not pulled back enough for my own buy orders in leveraged trade to get executed and I’m sure that other players have the same issue. Thus the buy orders have provided a strong support so far above 1600. Thursday is the last day of the current window for a trend change, so it still is possible that we have not inverted, but that potential is diminishing. If we move higher after Thursday it will favor a continued upside into the middle of June and the 1670-1700 area would be the first target. The other development is the moving above this dotted channel. That is going to add more chart readers to favor upside movement and more shorts to begin to cover positions. Thus the upper line is now going to provide initial support on any pullbacks.
The bottom line to all of this is if we are in a cycle inversion, it favors the market to be strong into mid month and has the potential of marking the end of the correction in gold and the resumption of the bull market. The only thing that would derail this would be the Fed meeting on Thursday, but there is so much pressure on that we just don’t see the fed saying anything to derail equities. At this point the chart pattern suggests higher prices have the advantage. Any pullbacks to the 1610 area will most likely find support buying and short covering.
10.00 AM GMT Technical traders are seeing August gold, with the overnight move, has broken out above a down trend channel resistance line on the charts (which we showed on last night’s website update) and price has recently climbed above a 50 day moving average and some might suggest that it is seemingly working its way up toward the 100 day moving average up at the $1,669 level. Somewhat supportive dollar market action might also be contributing to the upward track in gold prices and there is also talk that the US Fed is considering some easing action and that development could add to the bulls existing case.
Dampening the upward track in gold prices this morning is a downward revision in a European GDP reading, reports of increased Asian scrap gold sales and talk of ongoing sluggish Asian demand. In the end, the gold market wants and needs to see one or perhaps two additional central bank easing moves to leave the bulls reassured.
Hong Kong shares managed more short covering gains overnight, while Shanghai equities simply marked time again on the charts. European equity markets were higher overnight off hopes of something positive from the ECB meeting early this morning. Early US equity market action is posting definitive gains as well.
Seeing a downward revision in Euro zone GDP readings overnight keeps the heat on easing and the uncertainty of global markets.
The US economic report slate today is rather thin, with a weekly mortgage application survey due out early, a couple Fed speeches due out during market hours and a Fed Beige Book scheduled for release in the early US afternoon trade. In general, the market is setting itself now for the Fed meeting on Thursday as Bernanke testifies before the senate banking committee.
Gold has reached the weekly resistance area of 1633-1642 for this week. There is an additional resistance point at the 1672 area where the April 27th price failure occurred that is also an important price point on the chart.
The other important element that is occurring in the gold market is the upside breakout of the CHOP CHANNEL that has defined this downtrend since the Feb 29th high. More important is the cycle development we’ve been discussing on the website. Ever since this correction began last year, the blue points have provided the high points and Red the low points. When gold is in a major correction, this is normal. When the lows begin to develop at the BLUE points, it is a sign that the corrections have ended and the bull market is attempting to resume its upward trend. We call it a cycle inversion. There are usually 3 inversions that happen per year and they usually are accompanied by sharp moves as happened in January on the chart. Some of the inversions, as the one in January do not last longer than a month and return to the trend. We noticed this potential inversion pattern the night before the big up day last week, and we have been monitoring it. That big up day of 60 dollars however, has so far not pulled back enough for my own buy orders in leveraged trade to get executed and I’m sure that other players have the same issue. Thus the buy orders have provided a strong support so far above 1600. Thursday is the last day of the current window for a trend change, so it still is possible that we have not inverted, but that potential is diminishing. If we move higher after Thursday it will favor a continued upside into the middle of June and the 1670-1700 area would be the first target. The other development is the moving above this dotted channel. That is going to add more chart readers to favor upside movement and more shorts to begin to cover positions. Thus the upper line is now going to provide initial support on any pullbacks.
The bottom line to all of this is if we are in a cycle inversion, it favors the market to be strong into mid month and has the potential of marking the end of the correction in gold and the resumption of the bull market. The only thing that would derail this would be the Fed meeting on Thursday, but there is so much pressure on that we just don’t see the fed saying anything to derail equities. At this point the chart pattern suggests higher prices have the advantage. Any pullbacks to the 1610 area will most likely find support buying and short covering.
Gold Advances After G7 Talks,
Eyes To Track ECB Rate Decision
Precious-Gold rebounded after two days of drop after G7 finance ministers and central bank governors agreed to coordinate their efforts to the euro area debt crisis, before ECB rate decision.
G7 leaders agreed to do their best to support Spain`s weak finances and prevent the exit of Greece from the euro area before G20 summit held on June 18-19.
Recently, gold prices have been following the losses in the euro amid the lingering European debt crisis which damped haven demand on gold as a refuge for the U.S. dollar.
Later in the day, eyes will track the ECB rate decision and press conference by ECB President Mario Draghi, amid some expectations of seeing an interest rate cut and extension to full allotment in refinancing operations to endorse struggling banks, the ECB will announce today the latest growth and inflation forecast.
Yesterday, data showed that euro area PMI composite which is based on manufacturing and services dropped to 46.0 last month from 46.7 in April.
Also, the Fed will release its Beige Book business survey today, before the coming monetary decision taking place on June 19-20.
Gold may take advantage of more stimuli provided by central banks as it will enhance demand on gold as an inflation hedge.
Crude oil for July`s delivery is currently trading higher around at $85.04 a barrel from the day`s opening of $84.14.
The yellow metal managed to rebound today to trade around $1627.11, where the metal has been capped by the pivotal resistance of 1630.00 which prevented it from achieving more upside actions since past Friday.
On the other hand, the U.S. dollar showed a drop against a basket of major currencies; the dollar index is currently hovering around 82.48 compared to the day`s opening of 82.77.
Gold inclined today in line with our previous expectations, reaching the first target after confirming stability above 61.8% Fibonacci correction of the CD leg of the bullish deep crab harmonic pattern. Harmonically, consolidation above the second target at 1616.00 suggests the continuity of the upside move , targeting mainly 1640.00, which represents the first extended target. The upside move might extend further towards 88.6% Fibonacci correction at 1655.00. Consolidation above 1599.00 is necessary for our positive outlook to prevail, while stability above 1616.00 strengthens the suggested bullishness.
The trading range for today is among the key support at 1599.00 and key resistance now at 1655.00.
The short term trend is to the upside targeting 1945.00 per ounce as far as areas of 1475.00 remain intact with a weekly closing.
Support: 1624.00, 1620.00, 1616.00, 1608.00, 1604.00
Resistance: 1627.00, 1633.00, 1640.00, 1645.00, 1650.00
Resistance: 1627.00, 1633.00, 1640.00, 1645.00, 1650.00
Recommendation Based on the charts and explanations above our opinion is buying gold around 1620.00, targeting 1633.00, 1640.00 and 1650.00 and stop loss below 1604.00 might be appropriate.
It is likely to fall towards 1614.55 - 1611.49
as its corrective rally could falter in 1620.41 - 1623.22 area.
Supports / Resistances
Res 2 1,629.3400
Ex-High 1,623.7200
Res 1 1,623.2200
Pivot 1,617.6100
Sup 1 1,611.4900
Ex-Low 1,611.9900
Sup 2 1,605.8700
June 5
5.00 AM GMT
GOLD eased a few dollars to open this morning at $1619 as the bullion is overbought in the short term according to technical indicators despite a rally in the euro overnight and a recovering crude price. The market, especially the euro, was buoyed by expectation from an emergency meeting held by the 17 euro zone countries later today that further ECB monetary easing could stabilise the situation for the time being. We have noticed short term bullish momentum as the open interest for the precious metal increased 2% last Friday suggesting new bullish bets rather than sheer short covering while the daily chart pattern has also formed a bottom. We suggest investors to remain sidelined for the moment. The euro zone meeting result could be temporarily dollar bearish but we don't expect any underlying factors to be changed. We don't expect safe-haven demand for gold to be sustained either.
Compass Direction- Short-Term: NEUTRAL
- Medium-Term: BEARISH
8.00 AM GMT
The incline seen on Friday supported gold to reach all the suggested targets. Now, we return to the previously proposed harmonic structure, where the metal is currently above the second target of the deep crab harmonic pattern at 1616.00, which represents 61.8% Fibonacci correction of the CD leg. According to harmonic analysis rules, consolidation above this level might support the upside move to extend towards the first extended target around 1640.00 that also represents 78.6% Fibonacci correction, while a breach of this level might support the bullishness to extend further reaching 1655.00 and maybe 11671.00. Stability above 1599.00 is necessary for our positive outlook.
The trading range for this week is among the key support at 1582.00 and key resistance now at 1690.00.
The short term trend is to the upside targeting 1945.00 per ounce as far as areas of 1475.00 remain intact with a weekly closing.
Support: 1620.00, 1616.00, 1608.00, 1599.00, 1594.00
Resistance: 1624.00, 1640.00, 1654.00, 1650.00, 1655.00
Resistance: 1624.00, 1640.00, 1654.00, 1650.00, 1655.00
Recommendation Based on the charts and explanations above our opinion is buying gold around 1620.00, targeting 1640.00, 1655.00 and 1671.00 and stop loss below 1590.00 might be appropriate.
Gold prices fell in Asian trading Monday amid profit taking after soaring to near four-week highs Friday on news that the U.S. economy picked up fewer jobs in May than previously hoped.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded down 0.26% at USD1,617.85 a troy ounce.
Gold hit at a low of USD1,617.35 a troy ounce and a high of USD1,628.45 a troy ounce during the session.
Gold futures were likely to test support at USD1,574.45 a troy ounce, the low of May 28, and resistance at USD1,631.25, the high from May 25.
The U.S. economy added a net 69,000 nonfarm payrolls in May, far beneath expectations for gain of about 150,000.
The headline unemployment rate, meanwhile, rose to 8.2% in May from 8.1% in April, which sent gold soaring initially on talk the Federal Reserve may feel obliged to intervene and stimulate the economy via quantitative easing, which are asset purchases from banks that flood the economy with liquidity.
Quantitative easing sends the dollar weakening as a tradeoff for price stability and also for conditions that encourage hiring, and a weak dollar normally sends gold rising.
Gold erased gains on profit taking, especially on talk that Germany remains steadfast against participating in a continent-wide single bond issue to prop up its debt-saddled neighbors, which boosted demand for gold's traditional hedge, the dollar.
Elsewhere on the Comex, silver for July delivery was down 0.92% and trading at USD28.250 a troy ounce, while copper for July delivery was down 1.09% and trading at USD3.282 a pound.
100% BONUS UP TO $600 On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded down 0.26% at USD1,617.85 a troy ounce.
Gold hit at a low of USD1,617.35 a troy ounce and a high of USD1,628.45 a troy ounce during the session.
Gold futures were likely to test support at USD1,574.45 a troy ounce, the low of May 28, and resistance at USD1,631.25, the high from May 25.
The U.S. economy added a net 69,000 nonfarm payrolls in May, far beneath expectations for gain of about 150,000.
The headline unemployment rate, meanwhile, rose to 8.2% in May from 8.1% in April, which sent gold soaring initially on talk the Federal Reserve may feel obliged to intervene and stimulate the economy via quantitative easing, which are asset purchases from banks that flood the economy with liquidity.
Quantitative easing sends the dollar weakening as a tradeoff for price stability and also for conditions that encourage hiring, and a weak dollar normally sends gold rising.
Gold erased gains on profit taking, especially on talk that Germany remains steadfast against participating in a continent-wide single bond issue to prop up its debt-saddled neighbors, which boosted demand for gold's traditional hedge, the dollar.
Elsewhere on the Comex, silver for July delivery was down 0.92% and trading at USD28.250 a troy ounce, while copper for July delivery was down 1.09% and trading at USD3.282 a pound.
5.00 AM GMT
With GOLD halting its broader weakness to rally strongly the past week, the commodity faces the risk of further upside offensive. However, it continues to hold on to its medium term downtrend. This suggests that its present recovery could fade and turn it lower towards the 1,522/27 levels. A cut through here will call for further declines towards the 1,500.00 level. Price hesitation could occur here due to psycho level but if that level gives way expect Gold to decline further towards 1,478.05 level. On the upside, the risk is for it to recover further towards the 1,642.15 level. If this level breaks, further upside should build up towards the 1,670.70 level and possibly the 1,700 level. All in all, Gold continues to hold on to its medium term downside bias though recovering
Gold resistance is the 1633-1642 area on Monday and then 1672-1680....support is the 1588-1604 area ......
MONDAY could be a LONG RANGE DAY and the key will be how the short term cycles play out. For now, we favor an interim low is in and if we exceed 1633-1642, we’ll favor a move to 1675-1692.
Gold Weekly Update June 4-8, 2012
Long Term – Up Price failed at key resistance of 1767-1804 and correction in progress.
Medium Term –Bearish – The moving averages are down trending, the red average is above the blue and price is below both averages. Price has reached major price support areas on the long term charts AND HAS REACTED BACK INTO THE CHANNEL LINE – The first clue that gold may have put in an IMPORTANT LOW.
Intermediate term – Neutral – The Bearish downtrend has finally been neutralized. Now we need the blue moving average to cross above the red.
Short Term – Bullish – A close below 1543 would turn the trend down. Otherwise the trend is up.
Resistance for this week 1608-1618
/ 2nd tier 1632-1642
Support for this week 1547-1555
/ 2nd tier 1530-1539
Resistance for this week 1608-1618
/ 2nd tier 1632-1642
Support for this week 1547-1555
/ 2nd tier 1530-1539
Resistance last week was listed at 1608-1618 and the high for the week came in at 1630. Support was listed at 1552-1565 and 2nd ‘tier at 1530-1539 and the low for the week came in at 1530
Things are finally coming to a head in the liquidity crisis as the global slowdown, the plunging stock and commodity markets and the bank runs in Europe are bringing things to the forefront and the realization that only another liquidity injection will put off what’s coming dead ahead a liquidity crisis that is no longer mathematically going to be able to be repaid. It is the same situation that happened in 1929 as a European sovereign debt default brought on the great depression. Because we use paper for money, the situation is being prolonged but the outcome in the end is going to be the same.
There are no safe, risk-free investments available anywhere, for the first time in generations. Because interest rates are near zero, and trillions are being handed out on a monthly basis we’ve arrived at a situation where the price of CORN on the exchange had a 40 cent range today ------ from up 22 cents per bushel to start the day to actually have it close lower. That used to be a YEARLY price RANGE for corn. It all happened in four hours today. It was not different for gold as it went from 1560 to 1550 back to 1560, back to 1545 and then to 1630 for a total range of $120 dollars for the day.
Just how is one supposed to try and trade that? It’s becoming almost impossible. Thus on June 1st we traded a year’s worth of Corn prices and a month or two of gold. To make matters worse, the entire banking system is insolvent and the big money is being forced to put money where the most liquidity still exists, the US and German bond markets, and the US dollar. It can’t be put in gold because the market is just too small. All the gold totaled is less than just the stock of Exxon or Microsoft. People who are parking money in bonds are not stupid. It’s just there’s no other choice. It’s the only place where one can feel secure parking billions of dollars. They do it for the simple reason of just being able to get their capital back.
How small is the gold market?
There’s about enough to give each person on earth ONE OUNCE each. Then the supply will be exhausted. It just may be that fundamental that eventually allows silver to reach some of the heights in price that some predict. Thus a bi-metallic system of silver and gold will probably be required to function. That’s the way it was in ancient times.
The return of gold and silver to the monetary system might not be an exactly as the old way, but the tide is already beginning to change. The latest evidence is there is news that the Basel III conference in 2013 is going to consider upgrading gold to a tier one monetary instrument.
THE POTENTIAL FOR MONDAY AND TUESDAY to be major days in the market is very high and the final week of June could provide fireworks like we have not seen in a long time.
And on the long term, this is a major cycle convergence of long term implications and over the next few years we will witness the greatest upheaval since the great wars and depression of the 20th century.
Even if we are very careful, the potential to lose everything via markets and government confiscations will be incredibly high.
You see the history books we’ve read about the great wars always leaves out one thing. HOW WE GOT THERE. History shows that whether it was the French Revolution or the Second World War and every war in between was a result of FISCAL IRRESPONSIBILITY. In the old days, nations would discover new civilizations and plunder their gold and silver as the discovery of North America was in search of gold and silver so as to further and fund the wars of the current times.
Think about this. What was Bretton Woods for? It was to TAKE gold out of the center of the monetary wheel and replace it with paper for the simple reason that when gold is real money, then there is not ENOUGH MONEY TO WAGE war. And without war, the 200 or so families that run the world cannot pull in the trillions of dollars needed to fuel their appetite for total control because he, who controls the money, controls all.
So here we are and it’s time to get ready for what’s coming.
Presently the banks are so insolvent, nations are insolvent, organizations are insolvent, the government is insolvent and so is 95% of the population. Know why? It’s because paper is really worthless and the majority of it in the system is not even cash but debt. When you borrowed 300K to buy your house did you see any money change hands? What happened was DIGITS were transferred as no cash changed hands.
The Fed and the ECB has to secure all the debt because it is WORTHLESS and if they don’t come up with a trillion or so each month, the entire system will default because the payments are no longer being made. So what happens is the existing cash that remains is obtained via mass liquidation in the same manner as it is on E-bay. At half price or less.
In Spain the housing market is in collapse as it is in USA. Of course the government of Spain has not secured millions of mortgages like USA has with Fanny Mae yet.
Investing that has been in place all our lives is right out the window. Those on fixed incomes have been forced to put their money to work in the global casinos and with all of the tax increases and license fees and permits and tolls, government revenues STILL has declined almost 20% in the last four years.
The USA is basically borrowing about 150 million dollars an hour to remain in business. The most fascinating thing about it all is that even though it’s created out of thin air, the government has to have someone besides them print it and then lend it to us at a rate of interest.
HOW CRAZY IS THAT ?
That’s what JFK asked when he took office. When the Feds asked for too high an interest rate, he decided to make some changes and go back to the constitution and print his own money at ZERO INTEREST RATE. In other words, he decided to DUMP THE FED.
You’ve heard the line follow the money? If you’re wondering what happened on November 22nd 1963 let me tell you that’s the REAL STORY. In fact, he was ‘removed’ for reasons of Nat’l security. (I didn’t spell national because those two words together are on the LIST of words being watched on the internet.) He was legally removed because he compromised the SYSTEM.
The five dollar bill below is evidence that JFK was removing the Feds, step by step. Look what I’ve highlighted. It’s not a FEDERAL RESERVE NOTE. It’s a United States note. Yea that’s right. This entire mess began on November 22, 1963.
These bills were cancelled right after his untimely assassination. How’s that for coincidence? That’s how deep this mess is and how far up the ladder it has traveled from. Every ill of this current generation and the total insolvency and control of the world has a chapter in the book entitled November 22, 1963.
Every investment gets their turn is getting liquidated. It was gold in the 90’s, real estate in the 2000’s and now it looks like it must be the stock markets turn again.
We need to get ready for what’s coming.
But there was one big difference last week. Gold finally decided it had had enough and after three unsuccessful attempts at collapsing the 1520 low, the market exploded higher. And the read is that the ENTIRE currency paper system is now at risk at an even greater level. And make no mistake it’s going to take a long time and a much lower standard of living for most of the west to unravel the mess that has been created. Thus the final exodus to gold is not far from returning to reality. Even if we do crash, gold is going to come out of the ashes and most likely lead the way as it has always done in the annals of history.
There is nothing different going on right now that has not happened throughout history. It’s just a different cast of characters and victims.
Going to the Weekly Chart
Last week we pointed out that the weekly technical readings have only been this low on 5 occasions over the last 3 years. The massive rally on Friday now favors that gold has made a medium term price low and odds favor higher prices toward 1670-1675 is in play. It took two hammers and a test of 1530 again last week, but odds now favor that an important price low has taken place. While we could get a pullback to mid June, and while the “trend” is still down, odds favor that we’ve made an important price low. We now have TRIPLE TAILED the 1520-1530 area and with the technical situation, the ODDS ARE VERY HIGH that an important low has taken place.
Do you remember the price point we failed at in April? Recall it was 1672. Look at the 34 week medium term moving average. We begin next week with it at 1673. Odds favor that is the next target this market is going to go after.
The May 31st close above 1561 (the Jan 2nd 2012 low) at 1562.55 was just one dollar higher than the yearly pivot point and the reversal above 1600 on June first, and the dual hammer reversals are pretty high odds a MEDIUM TERM LOW IS IN PLACE. Adding to the bullishness is the green area on the chart is the 2011 correction right before the final move up in gold and that remains an important support area at the 1450-1530 area. Also, the mini black dotted 2011 downtrend line has SUPPORTED every weekly low during this 2012 pullback and did so again last week. Yet another important support is the 89 week moving average at 1557 has held on a weekly basis. Finally, WILLIAMS indicator at the bottom of the chart is back above 80 and that favors a medium term low has taken place. We still need to get back above the 34 week moving averages to confirm the UPTREND, but an interim low and challenge of that area is next on the list.
THE ONLY THING THAT CAN STOP THIS IS A MASS LIQUIDATION SQUEEZE. And even then, if we reach a tipping point it won’t matter because those liquidating because they have to have WAITING HANDS TO TAKE IT FROM THEM. The time is coming.
Thus it will be important to once again watch the developments in Europe and the further developments on a global scale. As we’ve seen in the link earlier in the report, it’s going to take another round of PRINTING to save the current situation. If defaults escalate or the perception of default, and the public panic’s out of banks intensifies, it will not take long to have a systemic failure. This is why we think a major bailout announcement is coming in June once again. When that hits, gold will resume the bull run it has been on.
Thus it will be important to once again watch the developments in Europe and the further developments on a global scale. As we’ve seen in the link earlier in the report, it’s going to take another round of PRINTING to save the current situation. If defaults escalate or the perception of default, and the public panic’s out of banks intensifies, it will not take long to have a systemic failure. This is why we think a major bailout announcement is coming in June once again. When that hits, gold will resume the bull run it has been on.
ONLY A CLOSE BELOW 1507-1520 would change the outlook.
Obviously we’ll be looking for confirmation from the price action over the next couple of weeks where we want to see gold now take center stage and follow thru on the massive move of last Friday.
The chart below is an ETF that follows the Junk bond market index. This market sector is the first to clue us in on a BANKRUN. For the 3 rd week running we’ve been featuring this chart as it is a CLUE to the stability of the debt system we live in. And as you can see, the markets have buckled. Price closed below the 34 week moving average again and the plunge is on.
Obviously we’ll be looking for confirmation from the price action over the next couple of weeks where we want to see gold now take center stage and follow thru on the massive move of last Friday.
The chart below is an ETF that follows the Junk bond market index. This market sector is the first to clue us in on a BANKRUN. For the 3 rd week running we’ve been featuring this chart as it is a CLUE to the stability of the debt system we live in. And as you can see, the markets have buckled. Price closed below the 34 week moving average again and the plunge is on.
As long as we are below 39, we have to be on guard that a medium term top has taken place in the junk bond market and once again, potentially the entire system. We still need to start breaking below the trend lines below price to initiate some follow through crash but its best to remain concerned when price is below the 34 week moving average. If there is follow thru on the downside, then the odds will increase that the LIQUIDITY crisis we’ve been discussing for over a year is increasing and will keep markets under pressure and danger levels will increase up until another major bailout takes place. It shouldn’t be long now. The alternative is too shocking for all.
How will we know if the bull market has resumed?
While there is no guarantee, we believe that the natural short term cycle we highlight holds the key more so than any other factor I know of.
The chart below is from 2009. The DOTS on the chart are the BLUE BULL cycles. THE FOUR RED DOTS on top of price is the cycle inversions. During bull markets, the lows are made during the BLUE CYCLE and not the red ones we have seen since August of 2011 at the exact peak in price. All the big moves are during cycle inversions.
Once we return to making lows during the BLUE BULL cycle, GoldTrends will go on record for the first time and call for the correction to have ended. Every other analyst I know of has proclaimed it ½ dozen times. When BLUE bull returns, we will proclaim it for the first time.
One final note before the next chart. Look at the set up of RSI and WILLIAMS technical indicators. They are in the exact POSITION that we currently have on the weekly chart you saw earlier in this report.
Short Term Gold
The short term cycle turn is next scheduled for June 4th, plus or minus 72 hours. That means that the WINDOW for a trend change began on Friday (the 60 dollar day) and will last until Thursday of this coming week.
The chart below is the cycle chart we’ve been using and as you can see, gold is making a high right during the CYCLE WINDOW change. Therefore the potential does exist that gold is going to peak this coming week and then begin another pullback into mid June. If that scenario plays out then the long wave correction will most likely not be over. Again, there are no absolutes but I’ve watched this cycle for 30 years and long term bull markets have the lows occur at the BLUE cycle and not the RED. That doesn’t mean we can’t have nice rallies in between the cycles, but the real bull market run is when lows are made at the blue cycle.
Medium Term Gold – Bearish (1673-1692)
At the last moment gold has re-entered the channel line. It did so 24 hours late as the MONTHLY close was on Thursday, but the weekly on Friday was the saving grace. Now we must maintain inside this channel on weekly and monthly closes in June. Just last week we stated that we’re going to need a cycle inversion in order to favor higher to mid-June and re-entry of the channel and that might have occurred on Friday morning. We discussed that the monthly close needed to be above 1561 and the close was 1562.55---and with the June 1st close inside the channel line, it has kept the lower white and red channel lines at 1350-1400 from being activated.
In summary, gold at the very last moment has given the bull market a chance of completion. It’s only been one day so there is still work to do. Gold must keep the closes above 1577-1585 on a weekly basis and at a minimum above 1561. Above 1561 will keep gold inside the chop channel on the chart above us just observed. Thus ANY CLOSE BELOW 1540-1545 on a weekly basis will cancel the outlook and the correction will still be in play. Gold has no business below that price point if the medium and long term wave correction is over.
In summary, the major reversals we’ve discussed for the last two weeks survived with a 1530 low and the reversal this week has gold now in a position to return to bull market status. The final key is getting back above the moving averages in the 1673-1692 area. That would take the medium term out of bearish trend and put us neutral. Once the blue moving average can move back above the red, then we’ll be in medium term bull trend. The important part for now is we may have witnessed “THE” LOW. Unlike analysts who have called the low 20 times, I want to see some confirmation before I give the all clear, but for now, we’re on alert. We know what we need to see----blue cycle lows and closes inside the green channel on a weekly and monthly basis. The next two weeks will go a long way in answering the change. If it develops, and the trend resumes, it will become much easier to trade these markets as a trend will reappear instead of a chop.
Any failure now and close below that PRICE TAILS FROM THE LAST TWO WEEKS WILL FAVOR THAT GOLD WILL MOVE TO THE 1350-1400 area. This is our LINE IN THE SAND for this correction. We must maintain above THE MAY LOWS. We’ll allow 20 dollars just to make sure. Long term swing traders have their stop and that is 1507 on a weekly closing basis. That’s the line in the sand. If we move into a PANIC situation in the Euro and global debt
Any failure now and close below that PRICE TAILS FROM THE LAST TWO WEEKS WILL FAVOR THAT GOLD WILL MOVE TO THE 1350-1400 area. This is our LINE IN THE SAND for this correction. We must maintain above THE MAY LOWS. We’ll allow 20 dollars just to make sure. Long term swing traders have their stop and that is 1507 on a weekly closing basis. That’s the line in the sand. If we move into a PANIC situation in the Euro and global debt
Bottom Line
The FEDs and the ECB are going to have to jump in to provide a new round of liquidity and when they do, it will add strength to the metals. It’s only been a few days since 1530, and it is possible that gold’s move was a knee jerk reaction, but the odds don’t favor it.
The technical condition is set up where odds FAVOR a medium term price low has unfolded but we need to get some confirmation with the short term cycles.
IT TAKES AN “EVENT” and a weekly close below 1530 to change the outlook for gold. The Gold stocks may have bottomed also, but I never liked the chart pattern, and I still don’t. Equities remain under pressure also. THE CONTROL boyz will need to act very soon and provide another few trillion more as the last stimulus has already been sucked up by Europe. With Operation twist ending in June in USA, the markets are making it very clear ---PRINT OR DIE. We favor the FED and ECB will address the SPAIN issue next and if they can sell it then gold will continue higher. It’s almost a must that they figure out how to bail Spain and they need to do it NOW. If we get above 1633-1642 on a close then look for 1672-1698 as resistance for the weekly target high and the 1555-1571 area as support.
Gold futures climb sink on U.S.
jobs disappointment
From North America: Gold futures rallied past $1,600 an ounce Friday, poised to score a gain for the week, after disappointing U.S. payrolls data raised the likelihood of a fresh round of quantitative easing.
Gold for August delivery climbed $57, or 3.6 percent, to trade at $1,621.30 an ounce on the NYMEX. Prices had reached as low as $1,545.50 during Friday's trading session.
The U.S. added 69,000 jobs in May, the smallest net increase in nonfarm payrolls in a year. Economists surveyed by MarketWatch expected a 165,000 increase. May’s unemployment rate, meanwhile, rose to 8.2 percent from 8.1 percent, mainly because more people entered the labor force.
"Two months of disappointing jobs numbers implies a trend," Gold Newsletter editor Brien Lundin said.
"Two months of numbers this horrendous screams that a significant downturn is underway, and puts the QE3 theme front and center.
"The speculators are starting to salivate over the next round of quantitative easing that will be served up to the markets. Gold has been the first to react to this prospect."
The Last WeekGold for August delivery climbed $57, or 3.6 percent, to trade at $1,621.30 an ounce on the NYMEX. Prices had reached as low as $1,545.50 during Friday's trading session.
The U.S. added 69,000 jobs in May, the smallest net increase in nonfarm payrolls in a year. Economists surveyed by MarketWatch expected a 165,000 increase. May’s unemployment rate, meanwhile, rose to 8.2 percent from 8.1 percent, mainly because more people entered the labor force.
"Two months of disappointing jobs numbers implies a trend," Gold Newsletter editor Brien Lundin said.
"Two months of numbers this horrendous screams that a significant downturn is underway, and puts the QE3 theme front and center.
"The speculators are starting to salivate over the next round of quantitative easing that will be served up to the markets. Gold has been the first to react to this prospect."
Gold high for the week 1630...Low 1530...Close 1624...
YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
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
