India’s Central Bank unexpectedly raised interest rates For the first time since 2008 in an attempt slow their 16 month high inflation. This action started the avalanche sell-off today that was also fueled by traders taking profits in advance of the weekend.

The U.S. Stock Market and the Gold also were pressured from speculation from economists that the Fed will raise the discount rate before the next FOMC meeting on April 28th.

The upcoming wedding season (starts in April) has India’s Jewelers looking for price dips to purchase bullion for the upcoming ceremonies. They got one today!

The Gold market shook out a lot of long positions today as the market had been trading very technically for the previous few weeks. However, with the European Union and the Euro continuing to be under siege with its debt crisis it has made the U.S. Dollar the currency of choice. For the most part a strong Dollar is negative for Gold. With all the negative Gold news today I am very surprised that the sell-off was not more extreme.

 My Swing numbers for Monday 3/22…April Gold

RESISTANCE # 2…………..$1138.00
RESISTANCE # 1…………..$1123.00
PIVOT ……………………….$1112.00
SUPPORT # 1………………$1097.00
SUPPORT # 2………………$1085.00

Mike Daly / Gold Specialist