Gold Settled $12.40 Lower ... ($1709.80)
Friday's April Gold Futures traded a quiet $20 range as traders may have used falling Crude Oil prices to take profits from yesterday's $10.90 rally. The April Gold market traded a huge $104.30 range for the week consisting of a High of $1792.70 and a Low of $1688.40.
Today's $12.40 drop can be attributed to lower crude oil prices as the April Crude future traded as low as $105.80 per barrel. This has been quite a week to be a gold bug as traders were hoping to blast through the $!800.00-$1805.00 technical triple top early this week only to watch the market free fall over $80 during the Wednesday day session. I expect the volatility and the volume increase to continue as long as the geo-political tension continues.
News From The Week:
After yesterdays mammoth sell off in which the futures contract lost almost 5% of its value traders and investors may see this as bargain buying opportunity. It is my personal opinion that QE3 or not ...the continuation of low interest rates, physical demand, and geo-political tensions will continue to make the precious metals the safe haven currency of choice.
Yesterday's sell-off was way over done in my opinion. Today's rally was propelled by higher Oil prices as the April Crude Oil futures contract traded as high as $108.90 per barrel today.
Higher Crude Oil prices are considered to be inflationary and bullish precious metals.
May Silver also had a nice recovery today as it settled $101.9 higher at $35.66.1 per ounce.
As gold bugs we should expect the volume and volatility to remain high due to geo-political and economic uncertainty. Trade smart use stop-loss orders or hedged positions as we live in uncertain times. The U.S Department of Labor reported that Initial Jobless Claims were 351,000 better than the 355,000 that had been projected
Today's April Gold Futures contract traded an amazing $83.90 range.
Today's session started off innocently enough as it turned out to be the quiet before the storm.
The April Gold market had lost rally momentum early as traders were side-lined awaiting FOMC Chairman Ben Bernanke's Humphrey / Hawkins testimony. Prior to the Chairman's speech the Gold market began to sell-off when the State Department announced that North Korea agreed to suspend nuclear weapons tests and uranium enrichment and allow international inspectors to verify and monitor activities at the main reactor site. This is considered an easing of geo-political tensions for that region. However, the tension in the Iranian region is still very high.
The avalanche began as Bernanke hinted that there was not a present need for more easing at this point. This sent the Gold bugs into a selling frenzy as most traders and investors were all but certain that Quantitative Easing 3 was a foregone conclusion. The earlier FOMC meetings this year gave a strong indication that the voting Board Members were in favor of additional easing. Many traders and investors alike based there precious metals positions of their earlier statements and was the fuel that helped propel this years gold and silver rallies. There is little question that the Gold was a bit overbought and top heavy however, with all that has been going on in the world it appeared to be warranted. Today saw the biggest sell-off /correction / profit take of the year. Markets need to refresh in order to keep them healthy and two sided.
This huge price dip may be seen as a bargain buying opportunity in the Asian sector tonight.
Today's rally momentum appeared to be safe haven buying as traders and investors alike
continue watch the geo-political tension between Iran and the West escalate. Today's range primarily traded between my support and second resistance levels as we inch closer to the $1800.00 level. Gold bugs are quite aware that there is a technical triple top between $1800 and the $1805 level and there is a reluctance to hold long positions when the momentum slows. Today's April contract made yet another new high for the year trading as High as $1792.70. On January 3rd (1st trading day of the year) the April contract traded as low as $1572.30 and settled at $1603.20 for the session. So far this year Gold has traded a range of $220.40 and is up $189.50 from the January 3rd settlement.
Today's April Gold Futures session traded a very tight, and technical $18.40 range as traders are watching the situation in Iran closely. Any threat of an escalation or any warring environment would be bullish for Gold, Silver, and Crude Oil April Crude Oil traded as high as $109.77 per
barrel as of this posting. It is my belief traders are looking for news that will propel the April Futures contract through the triple top resistance level between $1800.00 and $1805.00 level.
Today the march Silver Futures contract out performed Gold as it closed 18.6 higher and settling at $35.52.4 per ounce. Due to the price differential between Gold and Silver many investors may choosing Silver as a better bang for their buck....
MY SWING NUMBERS 3/5
RESISTANCE # 2...........$1734.00
RESISTANCE # 1...........$1723.00
SUPPORT # 1...............$1702.00
SUPPORT # 2...............$1694.00
RESISTANCE # 2............$35.83
RESISTANCE # 1............$35.18
SUPPORT # 1................ $34.25
SUPPORT # 2................ $34.00
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