Precious Metals Market Comments

Today's June Gold futures traded a $23.20 range which included a new low for the year. The day session traded as low as $1572.00 a level we have seen since December 30th 2011.

The precious metals remain under siege as the European Union debt crisis chaos continues to pressure the Euro currency and steering investors into the U.S Dollar and U.S treasuries as their preferred investment choice. Greece has received its 5.2 Billion Euro bailout from the ETSF (European Financial Stability facility) despite Greece's inability to form a government.

Spain is seeking a 4.5 Billion Euro bailout in June in order to pay its bills. The uncertainty in the Euro region has caused traders and investors alike to be more tentative with their trading strategies especially when it comes to carrying open positions over night. The gold market reacted negatively to reports that J.P Morgan had suffered a 2 billion dollar trading loss on credit derivatives. Overall this has been a tough week for the Gold market and I expect the choppy and volatile conditions to continue as the European Union chaos drags on.

News from the week:

Thursday:

Today's June Gold futures traded a quiet $17.20 range as global investors and traders alike remained tentative and viewed U.S Economic data and another European Union debt crisis reprieve as Greece will keep their funding until political election issues are resolved and a new Greek government is in place. This news resulted in a stronger Euro versus the U.S Dollar and therefore providing appeal for Gold. FOMC Chairman Ben Bernanke spoke to the Bank structure and confidence conference today and that may have sidelined many Gold bugs as his last speeches since 2/29 have single handedly crushed the price of Gold. On February 28th the June Gold contract traded as high as $1795.10. On February 29th  Chairman Bernanke revealed that there would not be a need for more economic stimulus in the near future which completely contradicted what the FOMC had been hinting for the previous 3 months causing the Gold to trade as low as $1680.00 during the day session. That's a drop of $115.10 in a 24 hour period.

It is apparent that when Mr. Bernanke speaks the markets listen...............

 In today's speech Mr. Bernanke stated The banks have more to do to restore their health the banking sector has improved substantially & that demand for credit has remained sluggish.

There was no mention of stimulus...

Wednesday:

Today's June Gold futures traded a choppy and volatile $28.50 range and settling under $1600.00 per ounce for the first time since December 30th. Today's volatility was attributed to concerns over Greek politician's inability to form a new government. Once again the news from the European Union is as clear as mud. News confirmed and then denied and then confirmed that Greece would receive its bailout funds. The EFSF (European Financial Stability Facility) confirmed the release of 5.2 Billion Euro's for Greece. Gold prices dropped as low as $1678.50 per ounce today as early reports and rumors concerning the bailout and the future status of Greece's role as a member of the European Union chased investors into the U.S Dollar and U.S Treasuries as the EURO currency remained under siege. Investors feared that Greece would leave the European Union and have to sell gold reserves in order to pay its bills...

Between the FOMC and the continued debt crisis in the European Union the price of Gold has dropped from the years high of $1795.10 (2/28) to today's low $1578.50... That's a drop of $216.60 in 9 weeks. Without the strong physical buying presence from China and India the precious metals markets have been unable to retain rally momentum.

FOMC Chairman Ben Bernanke will address the 48th annual conference on Bank structure and competition that is sponsored by the Chicago FED. This is slated for 8:30 am, CST.....

Tuesday:

Today's June Gold futures traded a choppy and volatile $44.00 range as investors and traders alike react to the latest European Union debt crisis. Today's day session traded a low of $1595.50 a level it has not seen since January 3rd 2012. Global investors are viewing the leadership change in both Greece and France has heightened the political and economic turmoil in the Euro Region. The Euro currency is under siege as the instability of the Greek government has placed a heavy financial burden on the entire European Union as well as forcing global investors to buy U.S Dollars and U.S Treasuries. President elect François Hollande of France is scheduled to take charge May 15th has been very outspoken in regards to the financial bailouts given to Greece and the devastating effect it has had on France as well as the rest of the European Union. The French elected the Socialist party candidate ousting Nicholas Sarkozy who along with German Chancellor Angela Merkel was instrumental in getting Greece their bailouts. Apparently the citizens of France are tired of shouldering the economic weight that has

threatened the economic climate of France. A weaker Euro is 'bullish' for the U.S Dollar.

A strong U.S Dollar is bearish for precious metals lower Crude oil prices also attributed to lower precious metals prices as the June Crude Oil futures traded as low as $95.52 per barrel during the day session

MY SWING NUMBERS 5/10

JUNE GOLD

RESISTANCE # 2..................$1607.00

RESISTANCE # 1..................$1596.00

PIVOT.................................$1584.00

SUPPORT # 1.......................$1573.00

SUPPORT # 2.......................$1561.00

VOLUME..............................138,000

JULY SILVER

RESISTANCE # 2..................$29.49

RESISTANCE # 1..................$29.18

PIVOT................................ $28.80

SUPPORT # 1.......................$28.50

SUPPORT # 2.......................$28.11

VOLUME............................. 33,000

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PFGBEST Research Division

mdaly@pfgbest.com

877-294-4669

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