Gold Market Update

We have been stopped out of our position on the trade opened on 10 Apr 2013 (long Jun Gold @ 1578) for a loss of $6.
The FOMC minutes were leaked early, sending gold spiralling down below 1560 and stopping us out in the process.
We now need to see where gold is going - the break below 1560 suggests lower prices and the rally from Fridayhas been almost entirely retraced.  This is not good news for the bulls.

FOMC Minutes Roil The Precious Metals Market

Gold and Silver bullion prices retreated on Wednesday, as the price to invest in Gold dipped to $1,558.40 an ounce, and the price to in Silver slid to $27.65 an ounce, after an early release of the March minutes from the Federal Open Market Committee (FOMC) meeting, were perceived by some as calling for an early end to the Fed's aggressive qualitative easing program (QE3). The minutes, however, indicate that there will be no change in the Fed’s benchmark interest rates, which will remain near zero, where they have been since December 2008, and they will stay there as long as the jobless rate remains above 6.5 percent and inflation remains in check below 2.5 percent.

The minutes did point out that “a few members felt that the risks and costs of purchases, along with the improved outlook since last fall, would likely make a reduction in the pace of purchases appropriate  around midyear, with purchases ending later this year.” But the policy meeting preceded the latest jobs report that showed non-farm payrolls added just 88,000 jobs in March, the slowest pace in nine months.

The FOMC committee, led by Chairman Bernanke, decided to continue its plan to buy $85 billion each month in Treasury bonds and mortgage backed securities until the outlook for the labor market “improves substantially.” Also affecting the Gold price on Wednesday, European Commission (EC) documents revealed that as part of its bailout plan, Cyprus plans to sell 400 million euros' of its Gold reserves. While the sale involves just 10 tons of the yellow metal, a relatively small amount, when you consider that central banks, from Russia, Kazakhstan, Brazil, and the Philippines, purchased more than 1 million ounces each in 2012.

Research firm, CPM Group, estimates that central bank reserves will rise in 2013 by 10.5 million ounces, with much of that coming from developing nations and countries that already have large foreign exchange reserves. Many obstacles remain in the path of euro zone central banks that desire to sell their Gold reserves to meet financial needs. 

 

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No one knows tomorrow's price or circumstance. 
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I do not accept responsibility for being incorrect in my speculations on market trend. 

 King Regards