Gold Settles $12.30 Lower ($1332.30)

Today's Gold session started out negative off news that the Central Bank of India raised key interest rates a quarter percentage point. There had been rumblings for weeks from the RBI (Reserve bank of India that Due to escalating inflation a rate hike was inevitable . many analysts predicted the hike would be .50 basis points however, this could leave the door open to raise rates down the road if the nations inflation rate continues to climb. The raising of rates by the world's largest consumer of Gold is significant... The RBI now has joined China and Thailand in the Asian sector in raising key Interest rates in the past few weeks....WHENEVER central banks raise rates Gold and Silver normally tumble...Despite the technically overbought status for well over 6 months I would have thought that the raising of interest rates from China and India would have had a greater affect on the Gold and Silver markets. As of this writing we are trading $1333.00 in February gold and $109.oo off all-time highs... This is a decent and much needed correction ,however there is still a lot of underlying support in the form investors 7 jewelers seeking to buy physical bullion ....

As I have stated in past reports ...these central banks are raising to combat historically high inflation in their respected nations...Historically Gold and Silver retain value and perform better during inflationary times....The European union is a long way from recovery and we here in the U.S are fighting HIGH unemployment and record Housing foreclosures.... There is economic woes world-wide..........A genuine loss of confidence in the worlds Fiat currencies.....

President Obama will give the State of the Union address this evening and It should prove interesting to the direction of the worlds markets on Wednesday. Also tomorrow is day two of the two day meeting of the FOMC.... India will be celebrating its 60th anniversary of Republic Day..... It is normally a day of parades and the giving of sweets and flowers however, it has Become a day of giving gifts of jewelry in lieu of flowers and sweets.....

REPORTS: 1/26
FOMC DAY TWO
NEW HOME SALES.........9:00 am (CST)

MY SWING NUMBERS 1/26

FEBRUARY GOLD
RESISTANCE # 2.......................$1343.00
RESISTANCE # 1.......................$1340.00
PIVOT.......................................$1331.00
SUPPORT # 1..........................$1324.00
SUPPORT # 2..........................$1319.00
Volume ..................................184k

MARCH SILVER
RESISTANCE # 2.......................$27.29
RESISTANCE # 1.......................$27.04
PIVOT........................................$26.79
SUPPORT # 1............................$26.55
SUPPORT # 2............................$26.35
VOLUME....................................58k

Mike Daly / Gold Specialist
PFG BREST
mdaly@pfgbest.com
877-294-4669
312-563-8029

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