by Mike Daly, IRONBEAM

Thursday, July 27, 2012

Gold Settles $2.90 Higher ... ($ 1618.00)

Today's August Gold futures traded a volatile and choppy $17.90 range.

This week's August Gold futures traded a vast $66.60 range including a high of $1628.60 and a low of $1562.00. This week's rally has been fueled by the resurgence of confidence in the Euro after European Union Leaders and the ECB President have shown their commitment to the integrity of the Euro zone. On Thursday the Gold market extended gains after European Central Bank President Mario Draghi reassured investors that the ECB would do whatever was necessary to preserve the Euro. Mr. Draghi's comment caused the Euro currency to spike versus the U.S Dollar boosting demand for Gold as an alternative investment. The rally continued today after German Chancellor Angela Merkel and French President Francois Hollande put out a joint statement saying they are deeply committed to the integrity of the euro zone. After their joint statement was released the Euro spiked sharply higher against the U.S Dollar and as a result pushed Gold prices to the $1628.60 level today before pulling back to settle at $1618.00 for the week.

*Tuesday July 31 the FOMC will meet.

News from the week:

Thursday:

The U.S Department of Labor released the Initial Jobless Claims as 353,000. This was much better than the 380,000 that had been projected.

Wednesday:

Geo-political tensions in the Middle-East may be fueling the volatility in the precious metals.

Monday:

Monday's August Gold futures traded a choppy and volatile $20.40 range as global economic data sent investors into the U.S Dollar and U.S Treasuries as their investment choice. Slowing growth in the Chinese economy coupled with heightened uncertainty in the Euro region. The Euro currency slid to its weakest level against the U.S Dollar since June 2010. Investors grew more concerned that Spain may need a full financial bailout. The Euro-zone finance ministers approved an agreement to lend Spain 100 Billion Euro's to solidify its ailing banking sector. Apparently Spain will need more funds. A German news report stated that the IMF is prepared to stop aid payments to Greece and increasing the likelihood of the country becoming insolvent as early as September.

MY SWING NUMBERS 7/30

August Gold

RESISTANCE # 2............. $1637.00

RESISTANCE # 1............. $1627.00

PIVOT........................... .$1619.00

SUPPORT # 1...................$1610.00

SUPPORT # 2...................$1601.00

VOLUME.........................160,000

DISCLAIMER: CURRENT EVENTS, MARKET ANNOUNCEMENTS, AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES.

THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT.

Mike Daly / Gold & Precious Metals Analyst

Direct: 312-765-7217

Email: Michael.daly@ironbeam.com

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