Asia looks at Gold, Silver and Crude Oil Trade
Gold futures prices sold off Tuesday, falling to a 4-month low at 1,595.50, basis the Jun contract.
The Gold price fell below the Key technical support at 1,613.00, and below Psych mark support at 1,600.00.
A rallying USD index and lower Crude Oil prices, the Key outside markets, helped to drive Gold and Silver prices South Tuesday.
Tuesday was arisk-off trading day in he broad market.
Jun Gold last traded minus 34.60 at 1,604.50 oz.
Spot Gold was last quoted minus 34.80 at 1,604.25 oz.
Jul Comex Silver last traded off 0.717 at 29.405 oz.
After Tuesday's Gold hammering, the Big Q is: How long and how deep will this latest downside move in Gold go?
From a longer-term technical perspective the Gold market is still in an 11 yr price up-trend that has seen previous, significant downside corrections just like this, only to see prices rally back, set new highs, and keep the longer-term price up-trend in place.
It would take a move in nearby Comex Gold futures prices below major psych support at the 1,500.00 mark to begin to call into question the viability of the longer-term price up-trend in place on the monthly chart. My call is in the 1550 zone for now.
The world markets Monday gave a restrained reaction to the weekend European elections that have once again put the EU turmoil. Then market Tuesday focused on the trouble that Greece's presently unstable government has caused for the entire EU, regarding dealing with its collective financial cohesion. I still believe that Greece will exit the Euro sooner or later and the EUR will find support at about 80.0.
Shayne and I believe that it will be really good for Germany.
The EUR currency deteriorated on the world foreign exchange market as traders sought out the USD and US Treasuries for safe-haven assets.
The EU debt and financial crisis is moving closer to one that could become very serious or at some point even a worldwide debt contagion.
That said I am keeping eyes on US Treasury bonds and Notes futures prices, as they are a good daily gauge of the overall Worldwide investor risk appetite, or lack of, in the market.
Higher bond and note prices suggest higher trader anxiety daily. Continuing trouble in the EuroZone mean higher Gold prices eventually, they will have to stimulate IMO.
Crude Oil futures prices traded lower Tuesday morning and are near Monday's 4.5-month low, and is currently trading at 97.28 - 0.66 (-0685)
This is a significantly Bearish outside market factor for the precious metals.
The London PM Gold fixing was 1,602.50 vs. the prior London PM fixing at 1,643.75.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.