Gold Settles $9.50 Higher ... ($1664.00)

This week the February Gold Futures contract covered a choppy $38.70 range and settled at $1664.00 for the week. This week was a Holiday shortened four day session that resulted in quite a bit of bullish news for the precious metals. The recent rally momentum has forced some sorts to liquidate as the heavy physical buying from the Asian sector has given the precious metals an abundance of underlying support. Today's session produced a volatile $23.80 range.

Trading as high as $1666.80 and as low as $1645.20......Traders will be eyeing the FOMC's two day meeting next Tuesday and Wednesday as hints from new voting members have indicated they are in favor of more stimulus...Possible QE3 ?

NEWS FROM THE WEEK:

Thursday:

Today's initial Jobless Claims data was much better than projected. The number was 352,000

better than the 384,000 that was projected.

Wednesday:

There still appears to be physical buying support coming from the Asian sector primarily China and India. China will be celebrating its lunar New Year on January the 23rd. This is a time of gift giving and the gift of choice is Gold. India is entering its wedding season and their auspicious wedding dates begin on the 28th of January and extend through March. And as we Gold bugs are aware there is an insatiable demand for Gold during their wedding and festival seasons.

News from the European Union have revealed that credit rating agency Egan Jones has downgraded Germany to AA- from AA....Today's weaker U.S dollar also fueled the mid session rally

Tuesday:

Asian sector continues to be the underlying support factor. After last Friday's profit taking sell-off it is my opinion that the price dip offered a bargain buying opportunity. As the Chinese Lunar New Year rapidly approaches (January 23rd) there is an increase in physical buying as the New Year celebration is a time for gift giving and Gold and Silver are the gifts of choice.

Also we are entering the Hindu wedding season as the most auspicious wedding dates begin January 26th...As we know India is the world's largest annual Gold consumer and there is a lot of Gold and Silver given as gifts during their wedding season. I expect the demand from Asian jewelers to remain high...

MY SWING NUMBERS 1/231

MY SWING NUMBERS 1/23

FEBRUARY GOLD

RESISTANCE # 2............$1679.00

RESISTANCE # 1............$1667.00

PIVOT ..........................$1658.00

SUPPORT # 1.................$1646.00

SUPPORT # 2.................$1637.00

VOLUME .......................157,000

MARCH SILVER

RESISTANCE # 2.............$31.15

RESISTANCE # 1.............$30.83

PIVOT ...........................$30.58

SUPPORT # 1..................$30.26

SUPPORT # 2..................$30.01

VOLUME ........................42,000

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