Safe Haven Rally
Weekly High …$1219.80 Weekly Low…$1192.50
This week the Gold market produced a very
choppy trading range of $27.30 as investors
had a vast array of economic data to decipher.
The FOMC left interest rates unchanged however,
They left the possibility of Quantitative easing on the table.
Quantitative easing describes a form of monetary policy
used by central banks to increase the supply of money
in an economy when the bank interest rate, discount rate and / or
interbank interest are either at, or close to zero. (Wikipedia)
This news may have sent mixed signals to traders and cause
Concern for pending inflation….Gold is a preferred hedge
against inflation as it tends to retain its value better than
most commodities during times of crisis.
There is certainly conflicting opinions concerning
the U.S economy as the recent jobs and foreclosure
data state we are far from our goal. The situation in
the European Union is still very fragile despite hints
that the worse may be behind them… Japan’s economy
is sluggish and once again China’s trade surplus was
better than anticipated as the reading for July recorded
a surplus of $27.8 Billion…
On Thursday the U.S Department of Labor released data
showing the Initial Jobless Claims rose by 2,000 to 484,000…
This figure is a six month high and an indication to investors
that the labor and foreclosure struggles not only persist
they are getting worse. This coupled with the uncertainty
in the European Union has investors fleeing equity markets
and seeking “safer haven” investments..
There has been a continued demand for physical
bullion especially from the Jewelers of India as they
prepare for their September – December Festival
and Wedding season. India is the world’s largest
consumer of Gold and is estimated to purchase
roughly 20% of the world’s Gold annually………
These higher prices may slow the demand for physical
however, with the upcoming Wedding and Festival season
rapidly approaching (September-December) in India it
is certain the jewelers will need bullion to meet their
With 8 Million unemployed
Americans and a record foreclosure rate expected
amazingly our Dollar is the fiat currency of choice…
Is there any wonder why the price of Gold remains high ?
The physical demand globally remains high for Gold
and Silver as investors prefer tangible “safe haven”
investments that retain value better than most commodities…
This is simply SUPPLY and DEMAND…(lots of demand)….
Friday, August 13, 2010 …Gold Settled at $1216.60…
*There is KEY technical RESISTANCE between $1220.00 & $1225.00*
My Swing Numbers For Monday 8/16…December Gold….
RESISTANCE # 2……….$1224.00
RESISTANCE # 1……….$1220.00
SUPPORT # 1………….. $1212.00
SUPPORT # 2……………$1209.00
Please feel free to call or email questions and comments….
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*just click on research and then metals report*
Mike Daly / Gold Specialist
*THERE IS EXTREME RISK TRADING FUTURES, OPTIONS, and FOREX*