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Archive for March, 2011

Gold Trends Intra Day Gold Update – Mar 31st

Thursday, March 31st, 2011

In last nights update resistance was listed at 1427-1434 and the high so far is 1439. Support was listed at 1409-1417 and the low so far today is 1420.20

London Gold Fix $1431.00 +$12.00

With the US Dollar down this morning and oil up sharply, commodities have gotten a lift but the gold market also rose off the World Gold Council’s 2010 Indian gold consumption peg of 963 tons, and of a longer term demand forecast for India from the World Gold Council that pegged demand to reach 1,200 tons by 2020.

While the gold market has benefited from talk of favorable Indian wedding demand, evidence of a huge wheat crop and a very large sugar crop, coupled with extremely high historical prices for those crops, probably increases the purchasing power of a noted portion of the agrarian population in India. With the World Gold council also suggesting that Indian demand for gold will rise 3% annually for the next 10 years on the idea of strong Indian gold demand.

Iit is also possible that gold prices will took direction from a USDA grain report, which suggested bullish prices for Corn and Soybeans.

A report out at 11:30 pm est today on Ireland banking is being awaited by the markets.

The Feds had to release data on who received all the discount window lending. Over 900 pages have been released. This should be ripe discussions over the next few days.

Going to the gold chart — yesterday’s price pullback finally touched the lower purple trendline and for the third time this week — the lows were established near the 1410 area. Prices remained firm all night setting their lows in Asian trade and price has been rising in quick bursts with stair step consolidations since the London session. Resistance for the remainder of the day is the 1440-1444 area and support is the 1427-1430 area.

In summary — the trend remains up — a close above 1444 would increase potential of higher prices into early next week. A close above 1436 would also keep things positive going into Friday.

by Bill Downey

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1 Billion+ Investors to Buy Gold as Chinese Gold Rush Grows

Wednesday, March 30th, 2011

We have previously reported at Goldcoin.org in Chinese queue at malls to beat Bernanke’s inflation with gold that the a Chinese Gold rush is underway from investors who are looking to beat inflation and devaluing currencies by buying and hoarding gold bullion and gold coins.

In January 2010, China recorded an inflation rate of 1.5%. But just 12 months later, the rate of Chinese inflation has climbed to 4.9%.

Rising inflation has sent food and property prices in China skyrocketing.

The price of food in China has increased 10.3% on an annual basis. The price of grain rose 15.1% and fruit prices were up 34.8% since January of last year.

Chinese inflation has been fuelled by an economic stimulus during the financial crisis two years ago of $585 which has resulted in excesses of liquidity in the economy.

The Chinese Government has tried to curb the inflation with measures such as raising interest rates several times and tightening lending requirements but so far this hasn’t worked. Even worse is the fear sweeping through the Chinese economy that inflation could go out of control and even lead to hyperinflation.

This has already prompted Chinese citizens to buy gold and their appetite for the yellow metal is insatiable.

This trend is not only set to increase but possibly explode into action following recent reports that the People’s Bank of China (PBOC) is actively recommending that over 1 Billion Chinese citizens buy gold as a way of preserving and protecting their wealth against inflation, economic crisis and the falling values of major currencies .

This recommendation was given in the Financial Markets Review from the PBOC and its publication coincided with the decline of several major currencies against the value of gold notably, the Swiss Franc fell 2.5%, The Japanese Yen 2%, The Pound Sterling 2% and of course the US Dollar  which fell 1%.

Chinese buy almost half the Gold produced in the world

According to the gold-specialising Swiss Bank UBS the Chinese demand for gold in the first 2 months of 2011 exceeded  7.05 Million ounces.

This unbelievable demand is the equivalent of 47% of all gold produced in the world during the same period. So the Chinese are buying almost half of the world’s gold production.

If this continues then the Chinese are set to buy in excess of 42.3 Million Ounces of Gold this year!

To put this quantity into context it is more gold than China’s Central Bank officially stores in its reserves.

The Financial Times recently quoted a senior executive at the Industrial and Commercial Bank of China ICBC, who spoke of the “voracious” appetite for gold in China…

China’s largest bank started a physically-backed gold savings account in December with the World Gold Council. Account openings have already surpassed 1 million, with more than 12 tonnes of gold already stored on behalf of investors.

Zhou Ming, deputy head of ICBC’s precious metals department, said the nation’s largest bank sold nearly 250,000 ounces of physical gold in January — the equivalent of 50% of all the bullion ICBC sold last year.

Added to this is the continuing diversification out of Forex by the People’s Bank of China into gold and other precious metals. They have around $3 Trillion which they would like to change because the weakening dollar is eroding its real value. How much gold will they need for $3 Trillion?

We know that China has been accumulating gold surreptitiously by buying up its own domestic production.

This suggests that increasing gold production was part of a long-term strategic plan to become a global leader in gold investments among governments.

The World Gold Council even reported:

Some market participants believe that China may also be continuing to buy local mine production, which it has done regularly in the past. There is certainly no shortage of experts, both domestic and from overseas, advising China to do so.

The World Gold Council estimates China’s gold demand could double in 10 years as more investors embrace precious metals.

But even in the short term, the expected demand for gold in China over the coming month will be enough to put significant strain on global supplies.

According to Tom Bulford  “China has spent the last decade buying every ounce of gold it can lay its hands on.

In fact, the Chinese have increased their deposits by 1,054 tonnes since 2001.

That’s 76% more than it was buying just a decade ago!

And it’s not just the Government we’re talking about here.

Ever since private gold ownership was legalised in China…and the Shanghai Gold Exchange opened – regular Chinese citizens have also started buying up gold in a BIG way”.

Quite simply, the Chinese seem to want to buy ANYTHING gold…

…gold coins…gold bullion…even foreign gold miners.

In fact, according to Want China Times…

“Chinese state-owned gold miner China National Gold Group announced… that it will step up overseas mergers and acquisitions in an effort to increase its gold stockpiles by 100 tonnes this year.”

Chinese production figures

China Produced $35 Billion in Gold in 2010

According to China’s Ministry of Industry and Information Technology, gross output from domestic production increased 67% to 230 billion yuan ($35 billion) in 2010.

Of this, China’s gold industry earned 5 billion yuan ($3.8 billion) in profit — 78% more than in the previous year.

China’s gold mines produced 9.9 million ounces of gold in 2010 — an increase of 7% over 2009.

Meanwhile, total domestic gold output grew 9% to 12.0 million ounces. (source WGC)

India is also encouraging Gold acquisition

Traditionally there has always been a strong demand for gold in India  with its specific seasonal demands for weddings and a cultural attachment to jewellery. However, they are also strengthening demand in Asia which is fast becoming the most important Continent for gold investment.  Gold is selling extremely well to the ordinary citizens looking for wealth protection and preservation. There are over 460 Post Offices that sell gold direct to the people. India also has public companies that offer credit to anyone wishing to purchase gold – in other words you can get a loan to buy gold!

This incredible demand throughout Asia is sure to impact the price of gold which may not have been factored in to the so-called expert calculations/ predictions/guesses.

Gold Price set to go skyward with Asian demand and World events

Similarly there are other significant factors that cannot have previously been factored in to annual gold price predictions such as;

  • The continuing European Sovereign debt crisis with Portugal the latest Eurozone country in difficulty,
  • The on-going Japanese catastrophe following the Earthquake, Tsunami and nuclear crisis,
  • The popular uprisings in North Africa and around the Middle East with Syria and Yemen on the brink and the conflict in Libya worsening by the day. This has drawn military (and therefore financial)  resources from France, the UK and the US which have their own deficit problems and now has involved NATO countries.

It is becoming increasingly difficult to see how all of this can be paid for or accommodated in a World Economy already faltering.

It is no wonder that the Chinese are hedging against another crisis and with their ever increasing hoards of gold they are aiming to back the Yuan with gold and ultimately replace the Dollar as the world’s reserve currency.

We are heading for a spot of $1500 within weeks – and then…..$3000+

In view of the colossal demands for gold already discussed, the possible collapse of the dollar and the unknown outcomes of other world events a crisis bigger than 2008 looms large and we cannot predict which event will trigger it but be sure that it will happen. When it does make sure you have copied the Chinese and secured your wealth in the only safe haven for the crisis ahead. Buy Gold and buy now before the price takes off exponentially surpassing $2000 and even £3000 an ounce before the end of the year. The worthless dollar, hyperinflation, extraordinary demand and debt crisis dictate the course of gold to re-establish itself as the only real measure of currency and wealth. When the dust settles and re-evaluations have been made just pray you have gold as it will be worth upwards of $3000 an ounce.

Gold Trends Intra Day Gold Update – Mar 30th

Wednesday, March 30th, 2011

In last nights update resistance was listed at 1422-1428 and the high so far today is 1430. Support was listed at 1406-1413 and the low so far today is 1414.30

London Gold Fix $1419.00 +$5.00 LME

The gold market dipped last night to daily support at 1414 on forecasts from Gold Fields Mineral Services predictions of increased gold production in 2010 but the gold trade hasn’t been overly focused on the supply side of the equation. In fact, the gold trade generally thinks that investment and demand are easily poised to outdistance increases in supply. Gold Fields Mineral Services pegged world gold production in 2010 to have increased by 3%, with China contributing a gain of 6% and Australia contributing a somewhat shocking expansion of 16%.

While today’s gold upmove began shortly before he payroll reports, there is still a bit of caution of upcoming Fed dialogue, which this week has clearly tended toward a hawkish bias. For now, it sounds more like talk than action. Some traders are suggesting that the knock on impact of the Japanese disaster has already tempered prices and will in turn slow upcoming numbers throughout the world and that Fed tightening expectations are premature. With 3 US Fed members scheduled to speak during the trade again today and with unemployment reports due tomorrow, it is possible that metal prices will remain in the 1420-1430 area for the remainder of the day.

Monthly Japanese auto production readings showed a decline of 5.5% last night. Overnight the wires from North Africa suggested that the Libyan forces regained ground against the rebels.

Going to today’s chart — today’s push to 1430 has at least put us back above the 1420’s and currently trading near the 1425 area. End of month and beginning of month usually favors the upside in the metals so the upside is still favored into next week. The next big event will probably be the unemployment data on Friday. The potential for gold to remain in the 1420-1430 area until then has potential. Resistance for the remainder of today is the 1430-1435 area. support is 1419-1422. The next key area’s to wach would be a close above 1436 and 1444 as this would be suggestive that the upside still has the advantage. Trends are favored higher into next week.

by Bill Downey

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Gold Trends Intra Day Gold Update – Mar 29th

Tuesday, March 29th, 2011

In last nights website update resistance was listed at 1426-1434 and the high so far today is 1422. Support was listed at 1406-1413 and the low is 1410.90

London Gold Fix $1414.00 -$6.00 LME

Gold prices appear to have come in from over seas action on a slightly weaker footing. Apparently prices for gold related items in Japan continued to slide overnight and that could be the uncertainty of the Japan crisis.

Indian gold prices were also softer in the wake of weakness in a host of commodity prices in the US on Monday. Some gold players probably saw the hawkish dialogue from US Fed members speaking in Prague this morning as a negative, while others might have noted some residual concern within the Fed for the “Four” uncertainties facing the market. The Fed’s Bullard suggested that macroeconomic uncertainty was on the rise over the last few weeks because of Japan, the Middle East, the Euro zone debt crisis and also because of the US fiscal situation.

Last week, the gold market seemed to draw support from evidence of weak US economic readings, as that fostered some talk of an extension of easy money policies. While somewhat hawkish dialogue from the Fed over the last 24 hours might temper the impact of weak US data on gold prices, the trade should still take a long look at the reaction in gold prices to the Consumer Confidence report and the Case-Shiller home price survey this morning as both of those reports are expected to be soft.

The Dollar is higher against most of the major currencies during overnight trading. A Regional Fed President said that the US Fed may start to normalize policy before global uncertainties are totally resolved. Western and Middle Eastern nations will meet in London today to plan for a post-Gaddafi Libya. Japanese officials have found traces of plutonium around the damaged Fukushima nuclear power plant.

From a chart perspective — the inability of gold to close above 1444 last week continues to exert pressure on prices again this morning. Last nights high at 1422 kept gold inside the trading range we’ve been in for the past five months. Today’s lows have retraced back down to yesterday’s price range near 1410. This adds additional pressure on yesterday’s reversal back up. Support is the 1405-1410 (purple line) area and 1390-1398 where the dotted trend lines are.

Price needs to close back above the 1425 level as a minium to reverse the pullback that began last Thursday. The 9am to 10:30am EST timeframe needs to be watched carefully today.

by Bill Downey

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Gold Trends Intra Day Gold Update – Mar 28th

Tuesday, March 29th, 2011

In last nights website update support in gold was listed at 1418-1423 and 2nd tier support was listed at 1406-1412 and low so far is 1410.

London Gold Fix $1420.00 -$14.00

There are a number of cross currents going on in gold this morning. We’ve been looking for a pullback into today due to options expiration in gold — and the rollover from April gold into the June contract. Both of these factors seem to have played out as gold and silver are lower. Another factor we’ve been watching is the US dollar and the key uptrend line that is hovering at. Over the past three days the dollar has been able to climb back above 76 – and that area needs to be watched.

Gains in the Dollar overnight has added to the bears the initial edge this morning. One of the “stories” being floated is that Kadaffi will have to sell some of his gold to support his effort. We think the story has no legs — but it does add to the “spin” that the desperate shorts seem to be trying to expouse.

While the gold market hasn’t paid that much attention to supply side developments lately, news of higher Russian gold production for the first two months of 2011 has contributed to the slightly weaker price bias early this morning. The Russians saw their two month gold production rise by almost 14% over the prior year and that combined with concerns of slower global growth ahead has added to some pressure as well.

The Japanese situation continues to escalate and potentially drag on long enough that the trade is wondering if a slowing impact in industries besides automobile manufacturing could develop. Some players feel that the gold market is under pressure because of recent hawkish comments from the US Fed and also because of some market predictions that US QE2 is still set to end in June. News of a shift in political power within Germany (one of the few stalwart economic zones) adds to the uncertainty in Europe. All combined — the gold market has pulled back into Monday morning.

Support for the remainder of the day is the 1406-1410 area and resistance is the 1422-1426. In gold, I’m long 1/2 a position at 1406 — and added at 1418 last night for an average 1412. I’m using a stop at 1398 for the moment. From a chart perspective — the lower purple channel line is support — and so far gold has not reached that low point and the lower dotted trend line does not come into play until the 1385-1390 area. We’ll have to see how the price pattern looks — as our thinking is that options expiration and the roll into the June contract is what has temporarily brought gold down to this level on Monday.

The key now is for gold to get back above the 1425 area.

What we really want to see is a close above 1444 to give more confidence that gold is ending its trading range and is ready to move higher. The end of the month usually favors higher price into the first week of the month and we’re still looking for that at the moment. A short term peak will be due to begin sometime in the first 7 days of April — so we’ll be keeping an eye on that as well.

In summary — we’d like to see the lows develop here on Monday and push higher into the latter portion of the week.

by Bill Downey

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The 50 pesos is not the only Mexican gold coin

Monday, March 28th, 2011

We have already spoken about the 50 pesos coin on Goldcoin.org. This coin remains a very good choice for buyers looking to invest over the long term. But the 50 pesos coin is not the only Mexican gold coin to have in your money bag! In the following article you will discover the smaller family members of the 50 pesos coin and their characteristics.

20 PESOS OBVERSE

Description of the gold pesos coins.

The 2, 2.5, 5 and 10 pesos coins all bear the same inscriptions and engravings:
–  The obverse of the coin has the inscription “ESTADOS UNIDOS MEXICANOS” (United States of Mexico) which straddles an eagle that is standing and grasping a serpent in its mouth. The eagle is standing on a crown made from an oak branch and an olive branch. The eagle is the National symbol of Mexico: for Mexicans it is the representation of the duality between the earth and the sky. It also symbolises the conflict that delivers Good over Evil. There is a legend which surrounds this eagle: the old city of Tenochtitlan, today Mexico City, was built in the place where the Aztecs once saw an eagle flying off carrying a serpent in its beak.

20 PESOS REVERSE

20 PESOS REVERSE

– the reverse of the coin shows the value of the coin and the year in which it was minted. The coin is the effigy of Michel Hidalgo, a revolutionary and abolitionist. Michel Hidalgo is an emblematic figure of Mexico: a priest, a rebel and a revolutionary whose insurrection triggered the country’s process of independence. He first proclaimed independence on 16 September 1810 and then abolished slavery on 6 December. On 30 July 1811 the Inquisition had him shot for his crimes.

The 20 pesos coin

The obverse of the coin has a motif which represents the eagle striking down the serpent. The reverse of the coin shows a representation of the Aztec calendar from the Tiahuanaco Sun Gate. The Sun Gate is one of the vestiges of the Aztec civilization and is considered by several researchers as a astronomic sign.

Date on the gold pesos coins

CaptureNew Pesos Family

• Note on the 10 pesos coin: From 1961 to 1972, 954,983 coins were re-minted with essentially the year 1959. In 1996 , matt remints were created.

What is the interest in Mexican gold pesos coins?

Above all the interest in these coins is numismatic. But there is only a small step from numismatic to profitable investment! Why? Because these coins are ever more rare and their value can never fall below that of gold itself under any circumstances. To be clear: buying Mexican pesos in an opportunity to combine asset protection with pleasure.

Gold Trends Intra Day Gold Update – Mar 25th

Friday, March 25th, 2011

In last nights website update resistance was listed at 1438-1445 and the high so far today is 1438. Support was listed at 1418-1423 and the low so far is 1430.50

London Gold Fix $1434.00 -$8.25

In the early action today, April gold prices are sitting roughly $10-12 below the Thursday highs. A large portion of the corrective action was seen at the end of the prior trading session and prices this morning are trading in the mid to upper 1430’s. A margin rate increase in silver was probably the catalyst for the sell off on yesterday….. but it was certainly coincidental that we mentioned if a sell off into options expiration on Monday for Gold was in play that Thursday would be the most likely day.

Many gold players continue to think that the Euro zone crisis will provide support to gold prices going forward, as the fear of contagion or knock on influences have returned to the forefront.
Others in the trade noted that gold was able to gain in the face of weak US economic readings and that is considered a change of pace from the pattern that was seen in the beginning of March. In other words, some traders think that a series of weak US data points are capable of extending US QE and that in turn might give rise to a future inflation problem.

The Dollar is holding against most of the major currencies but is still fighting to get back above 76 and still remains in trouble on the charts as we close out the week.

Japanese authorities have suggested that one of the Fukushima reactors was leaking due to a broken core has increased an already dangerous condition.

Syria protests have been escalating as demonstrations are being driven by political demands. Economic issues and inflation concerns are behind the unrest. There are scheduled protests in UK also this weekend.

In today’s gold action, price is in a trading range and is very choppy. With the weekend approaching, yesterday’s downdraft, options expiration on Monday, the middle east and Japan situation, and traders moving from the April contract into June–it has created a lot of cross currents in today’s trade. Support for the remainder of the day is the 1420-1425 area and resistance is the 1438-1444 area. A close above this area would tend to favor the upside going into next week.

I cut my short term position in gold in half last night so as to lighten up for the weekend. Should there be a pullback into options expiration on Monday — I’ll look at adding it back in the 1415-1420 area or at the lower purple trend line on the chart.

In summary — yesterday’s pullback seems more manipulative action — and price should remaining choppy and range bound for the remainder of the day. The charts and the trends still look up into the first week of April. If there is a pullback early next week we’ll look at the price patterns and see if there is a good setup.

by Bill Downey

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Gold Trends Intra Day Gold Update – Mar 24th

Thursday, March 24th, 2011

In last nighs website update resistance in gold was listed at 1444-1452 and the high so far is 1442.60—-support was listed at 1425-1431 and the low so far is 1436.

London Gold Fix $1441.25 +$8.25 LME

After a fresh contract high yesterday, gold reached the 1442 area and sits roughly in the upper 1430’s in this mornings early trade. A warning from 10 former White House economic advisors, that Congress needs to address the US debt situation before the Bond market forces the US to ac is providing some support to the gold market.

The turmoil continues in the Middle East, but there wasn’t any major developments overnight for the market to digest. The situation remains precarious. Japan evacuated again as 3 workers were exposed, and the overall situation also remains far from a distinct resolution.

Adding uncertainty to the markets is the political/debt situation in Portugal. The market considers the size of the bailout for Portugal might be as much as $80 billion and that in turn casts some doubt on the capacity of the Euro zone stabilization fund to handle upcoming demands. The Prime Minister of Portugal resigned after that nation’s parliament rejected a series of new austerity measures. The meeting starts at 5 PM their time to see if they are going to ask for a bailout. There is still a debate as to whether the bailouts are stabilizing Ireland or Greece.

Going to today’s session, the options expiration in metals ends on the 28th — and if there is to be a pullback at all in the metals — the most likely time for it to begin would be today.

On the gold chart it comes down to the 1444 area and whether gold can climb above that area. This area has held since the February high and price is now on its third attempt to move above it. This is the area where the shorts have tried to “cap” price. Yesterday’s attempt around this time frame got to 1441 — and there have been two attempts so far today where price got to 1442 just before the New York open and then fell back to just above 1435. A second atttempt on the open was again rejected near the same area and a pullback.

Price has been in a very tight range since London — and gold is now attempting to get above 1440 again. So far it is still meeting with selling above 1440. It seems like desperation on the shorts —– and the bulls keep pushing it back to 1440 on every sell attempt by the bears.

In summmary — THE TREND REMAINS UP — and the bulls seem to have the advantage still. A break above 1444 should lead towards 1450-1460.

by Bill Downey

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Gold Trends Intra Day Gold Update – Mar 23rd

Thursday, March 24th, 2011

In last nights website update resistance was listed at 1434-1444 and the high so far today is 1434.50 —- support was listed at 1419-1424 and the low so far today is 1425.50 —

London Gold Fix $1433.00

In the early action today, April gold has managed a rise above the prior session’s high but has reached the key 1435-1444 price area of resistance this week. This is the key area to watch this week. A close above 1435 would add to the bulllish potential towards 1460.

Reports that the Japanese disaster might end up costing as much as $300 billion. However, the upward track in gold and other commodity prices might be held back because of fears that containment of the #3 reactor at Fukushima has seen a setback overnight as commodities generally don’t like to see developments that could end up slowing the economy.

Talk that a Chinese gold company might be looking to acquire gold mines in other countries was viewed as favorable in today’s trade.

The Fed’s Fisher is a scheduled to speak today and yesterday he generally sounded a hawkish tone. The US Fed Chairman BERNANKE is also scheduled to speak just ahead of mid session today and some traders think he will largely countervail the dialogue from Fisher.

Gold will garner some support from a bullish price forecast from a gold company executive, who suggested that gold might have a “couple” more years of upside action before a top is formed.

While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally weaker this morning and the US stock market is a bit lower this morning. Home sales plummeted in USA — down 175 from January.

The Dollar is stronger against most of the major currencies during overnight trading, although posting a loss against the Yen. With the US dollar on the brink of NEW LOWS for the year and at a key chart point, we couldn’t help noticing that Portugal is in the NEWS headlines and the “spin” is that Portugal may be the third country that will ask for a Euro bailout. This has caused a Euro pullback and a BID for the US Dollar today. Coincidence ? Who knows anymore, but the US Dollar is higher in trading today. The Prime Misister of Greece also stated that any restructuring of Greek debt would bring on collapse of banks in his country.

Coalition air strikes have grounded the Libyan air force, but rebel forces have been unable to take advantage as fighting has reached a stalemate.

Going to the chart – Gold is up against key resistance today at the 1435 area — and this is probably the most important area for this week. A close above 1435 will favor higher towards 1444. Gold has attempted to move above this 1435-1445 area since Feb 28th so it is approaching decision time. The price pattern continues to show “capping” as Darth likes to call it —- but they can only hold it for so long and it looks like a decision point is coming in on the short term today or tomorrow. The upside still has the advantage but keep in mind that BERNANKE is scheduled to speak today and that can cause some choppy action.

Resistance for the remainder of the day is 1435-1444 and support is 1422-1426. The trend remains up.

In summary — but gold and silver are at key price points —and a close above these levels will keep the favored short term uptrend in place.

by Bill Downey

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Gold Trends Intra Day Gold Update – Mar 22nd

Thursday, March 24th, 2011

Last nights website update listed 1434-1444 as resistance and the high so far is 1432. Support was listed at 1417-1421 and the low so far is 1420.

London Gold Fix $1425.50 -$2.25 LME

Overnight trading does not seem to have undermined gold prices on Tuesday.
In fact, certain Asian equity prices have returned to pre-quake levels and that in turn has tamped down deflationary concerns and might be under pinning support to gold prices. The Dollar is a touch weaker this morning on ideas that the US is set to remain in an easing posture.

Trade “risk on” has a bit of support as news that a Spanish debt auction saw good demand overnight and that the EU managed to step up their financial bailout capacity again.

News that Gold Fields is in the market for some Peru holdings, suggests that the gold mining industry remains bullish toward gold price prospects and that angle was given some addition credence overnight by predictions from the Anglogold Ashanti CEO who predicted that gold prices could reach $1,600 in the coming months.

While equity markets in Asia and Europe were generally higher this morning, early indications in the US stock market shows a much more toned down market at the open. Traders are looking at the 1300-1304 area as a pivot point. Traders are trying to short near that area —– but a move above 1306 —would have them looking to the long side.

The Dollar is slightly weaker against most of the major currencies during overnight trading, although posting a small gain against the Yen. Although air strikes have continued for a third day, Libyan forces allied with Muammar Gaddafi continue to seek out rebel strongholds.

Steam has been rising from two of the stricken nuclear reactors at the Fukushima power plant, indicating a greater likelihood that fallout may spread beyond the complex again.

From a chart perspective — gold reached daily resistance and has pulled back to the 1420 area to fill the Monday gap. Today’s zoom in shows the 1417-1420 area as support —-and additional at 1408-1412. Resistance is the key 1432-1436 area — and a close above 1436 would be suggestive towards 1460.

In summary — the gold market remains in a short term uptrend and higher prices are favored. A close above 1436 would indicate higher towards 1460.

by Bill Downey

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Gold Trends Intra Day Gold Update – Mar 21st

Tuesday, March 22nd, 2011

Last nights website update listed resistance at 1428-1436 and the high so far is 1435. Support was listed at 1410-1414 and the low is 1424.

A combination of decisions from Thursday night to intervene in the Yen and the coalition air attacks of Libya over the weekend has lifted commodities and stocks right from the open of the Asian markets last night. The focus away from the crisis in Japan has also tempered the threat of severe slowing and the revived inflationary sentiment is dominating early trade. The intervention of the Yen on Friday has given the feds the “excuse” for more printing — and the 3rd conflict front involvment is nothing less than inflationary on all fronts.

Indian gold prices were slightly higher overnight and with the US dollar action lower, that seems to have added to golds price in the early Monday US trade action.

Going to the charts shows the gold move from early Friday morning has carried into Monday’s trade. Support is the 1417-1421 area and resistance is the 1434-1437 area.

A pullback to fill the gap towards 1417-1421 should be the low end of gold expectations going into Tuesday trade and could provide the “dip” buying traders will be looking for. A close above 1425 and 1435 would add to the short term outlook the March seasonal lows are in place and higher prices into the first week of April is favored.

In summary — the Yen intervention (read more dollar printing) and air conflict in Libya sparks new inflationary fears in the market and prices are reacting accordingly. Short term trends point higher.

by Bill Downey

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The Theory of Crisis: Bankrupt = Bank + Corrupt

Saturday, March 19th, 2011

I am sure it will not come as a shock to learn that there is an on-going investigation into a host of « big banks » who are accused of fixing their inter-bank lending rate (LIBOR) to effectively disguise and downgrade their indebtedness. The period involved reveals this was taking place pre-2008 crisis.

The investigation is well under way and involves the major Financial Service Regulators of the US and UK amongst others.
The scale is breath-taking and the accusations extremely serious as indicated by the issuing of subpoenas to retrieve sensitive documents for the prosecutor’s evidence.

Here are the details as reported by C Powell of GATA following a report in the Financial Times:

Regulators in the United States, Japan, and UK are investigating whether some of the biggest banks conspired to “manipulate” the benchmark interest rate used to calculate the cost of billions of dollars of debt.

The investigation centres on the panel of 16 banks that help the British Bankers’ Association set the London interbank offered rate, or Libor — the estimated cost of borrowing for banks between each other.

In particular, the investigation was looking at how Libor was set for US dollars during 2006 to 2008, immediately before and during the financial crisis, people familiar with the probes said.

The probe came to light on Tuesday when the Swiss bank UBS disclosed in its annual report that it had received subpoenas from three US agencies and an information demand from the Japanese Financial Supervisory Agency.
The bank said the regulators were focusing on “whether there were improper attempts by UBS, either acting on its own or together with others, to manipulate Libor rates at certain times.”
All the panel members are believed to have received at least an informal request for information — an earlier stage in an investigative process before a subpoena.

Witnesses had been interviewed by investigators from the US Securities and Exchange Commission, the Department of Justice, and the UK’s Financial Services Authority, people familiar with the probe said.

The inquiry has been under way for some months. At least one bank received its initial request for information in October, people familiar with the matter said.

The BBA produces Libor rates for 10 currencies using eight to 20 contributor banks. The contributors submit the rates at which they think they could borrow on the open market. Outlying submissions are tossed out and the reported rate is the mean of the middle values.

Critics of the process for setting Libor — which is used as a reference rate for about $350,000 Billion in financial products — have long claimed it is antiquated and lacking in transparency. Commentators complained bitterly during the financial crisis that the rates were distorted because they believed weaker banks were unwilling to admit higher borrowing costs.

UBS declined to comment beyond its disclosure. The regulators declined to comment. The other banks on the panel at the time covered by the probe either declined to comment or spokesmen could not be reached.

They are: Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, HSBC, JPMorgan Chase, Lloyds, Rabobank, Royal Bank of Canada, Bank of Tokyo-Mitsubishi, Norinchukin Bank, Royal Bank of Scotland, and West LB.

HBOS, which has since merged with Lloyds, was also a member.

The BBA said: “We are committed to retaining the reputation and integrity of BBA Libor, which continues to be the authoritative benchmark of the wholesale money market. It has a straightforward and unambiguous calculation method, which excludes any rates which are significant outliers. It is fully transparent — all of the data inputted by the contributor banks is publicly available, as is our methodology.”
(By Brooke Masters, Patrick Jenkins, and Justin Baer , Financial Times)

Banks outside the law?

This type of activity is typical of the banking sector who operate amongst themselves as if they are untouchable and above law and regulation.
They believe in their own importance because of their size and apparent power which disregards national boundaries because of their global clout. They play by their own rules and we know where that leads us.

Even then, when they cause misery, mayhem and crisis for the whole world by their own greedy practices and mistakes they still come begging for more money to play with – and the worse thing is that incompetent governments full of over-educated, posh, millionaires who have absolutely no notion of the real world because of a privileged, sheltered, upbringing give them our taxes. I believe this should also be investigated as it stinks of incestuous, undeclared interests by senators and ministers who post politics suddenly appear on boards of directors doing nothing (consultants) for some enormous salary.

Do you trust your bank?

Do you know what they do with your money?

If there’s another crisis where will your money be?

If your bank gets into trouble will they have enough money to pay back all their customers?

Who do you think they will pay first? You? Yeah right!

If you’re not part of the Politocrat & Banking club you’ve got no chance.

I believe that Bankers should be personally responsible for their actions, decisions, judgements and huge mistakes they make and personally bankrupted to repay some of the missing funds. It should be in their contracts and not some huge retirement pay off for complete incompetence like Fred Goodwin (RBS).

Let’s face it they’re quick enough to give themselves performance related bonuses (when there’s the slightest positive news) so why doesn’t it work both ways? When a bank underperforms they should be responsible and pay for it just as they like to cream off their “rewards” for guessing right.

Stop bailing out incompetence – Let them fail!

I also believe that Banks that get themselves into a mess should get themselves out of it or let them go bust like any other business that fails – after all that’s why we have the word Bankrupt isn’t it?

It is two words combined – Bank & Corrupt! That about explains it!

The increasing problems of disasters and political unrest are putting further strains on all these large institutions that are exceptionally nervous because they know they are exposed and overstretched as pre-2008. Another feature is they never learn by experience!
In 2011 we will witness an economic crisis on a scale not yet seen.

The foundations of Countries economic policies and Financial Institutions “Good Practice” have not been prepared for the shock that is gathering strength and they will not withstand the shock and its magnitude.

Can you afford for them to go down with all your savings?

Should you wait until it starts and it’s on the Tele before you do something?

Should you buy fire insurance before or after a fire?
Act now and preserve some of your wealth by investing in tangible assets that will survive a crisis.

Act now to put your money into something that you own, that is not linked to a failing or devalued currency that will be a means of survival when you need it most.

Put your wealth into gold which has been the universal “currency” throughout history.

Don’t invest in “paper promises”.

Get Physical!

Own gold and gold coins.

People survived wars, crises, recession and depression because they owned Gold.

People also perished – because they didn’t!

What would you rather do? Survive or Perish?

Make your choice!

Gold Trends Intra Day Gold Update – Mar 18th

Friday, March 18th, 2011

In the last web update — resistance was listed at 1409-1417 and the high so far is 1422. Support was listed at 1392-1396 and the low so far is 1402.

Gold was up overnight on renewed move to quality and a massive, coordinated intervention by the G-7 has pulled the yen lower after it soared to historic highs yesterday. Gold begain is move up as soon as G7 countries agreed to the intervention in over a decade to weaken the value of the Japanese Yen and began as soon as the Asian markets opened.

The UN Council agreed to create a no-fly zone over Libya, and to take “all necessary actions” to guard civilians short of landing troops on Libyan soil. Crude oil had rallied srongly on the news — but has backed off as Libya is now declaring an immediate cease fire.

Going to the chart — gold’s move back up above the dotted trend line has put the short term advantage back to the bulls on the short term. Support for the remainder of the day is 1414-1415 — and resistance is 1422-1425.

The seasonal and short term timing factors we discussed on the website seem to have kicked in.

I’m moving my stop up to 1403 on the remaining portion of the website fill at 1406.50 from last nights update. A close above 1408 today will increase the potential for the uptrend to continue next week.

by Bill Downey

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Gold Trends Intra Day Gold Update – Mar 17th

Thursday, March 17th, 2011

In last nights website update resistance was listed at 1399-1409 and the high so far is 1403.60 — initial support was listed at 1376-1388 and the low so far is 1387.

London Gold Fix $1403.50 +$5.00 LME

While gold prices were somewhat weaker in early Asian trade, sentiment toward gold has improved in early US Thursday trade. Support from the aggressive rise in the Yen overnight and a much lower US Dollar across the board has firmed gold support near 1400.

News of a G7 conference call for a discussion in how to calm markets is sparking hope of more liquidity in the marketplace. While energy prices and other commodities are showing initial strength today, the gold market might be hesitating a bit until the G-7 meeting and for a sign that conditions are attempting to return to normal to get out from under the periodic selling pressure that has dominating gold this week.

Therefore, US data might be discounted in the face of the highly uncertain flow of events from Japan and the G-7 meeting. Weakness in the Dollar is providing some support to gold today, as very strong flows toward the Yen have seemingly prompted some move to quality buying interest in gold.

Workers at the Fukushima power plant are still attempting to contain leakage from reactors and are attempting to get power back to generators. Libyan government soldiers are preparing to engage the rebel stronghold of Benghazi.

Lets go to the chart

The the intersection of the dotted trend lines has price in between both lines for the second day running. This is adding to the potential that a short term low might be developing in gold. The Asian market pull back to 1387 supported right at the dotted line. Currently the market is testing the 1403 area — right where the top dotted line is at. A CLOSE above this area would be the first indication that favors price bottoming on the short term —and a bounce attempt into Friday’s close. Gold might remain subdued going into the G-7 meeting –and traders will have to decide on Friday if they want to be holding positions over the weekend.

Since the sell off to 1380 —gold has bounced back to the 1403-1406 area on three separate occaisions — and is testing that area again today. The current range of 1385-1405 is trying to carve out a bottom and a close above 1408 will add to the potential that the short term trend is about to turn up. From a timing perspective — prices are due to turn up near this time frame. Buttonwood has March 16th as a potential turn date and the seasonal calls for a mid month bounce. The short term trends we watch are also due to turn up beween now and next Tuesday. This tends to favor a low and bounce attempt soon. With oil higher on mid east unrest, it is putting a floor on commodities today.

With G-7 scheduled for after today’s market close, gold could remain its trade at the dotted lines for one more day. Any improvement in the Japan situation —ie; if power gets restored at the plants for the generators could also lend support to higher price trade today. In summary — the gold marke seems FIRMER at the moment and tends to favor a higher price going into the latter part of the day. The key is getting price to move above the 1408-1410 area.

Resistance for the remainder of the day is the 1406-1410 area and support a 1393-1398. In summary — prices seem firmer today — but traders are a bit cautious of the scheduled G-7 conference call later today. WATCH the 1406-1410 area —- If price can close above 1408 — it should increase the bounce potential in metals.

by Bill Downey

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GoldTrends Intra Day Gold Update – Mar 16th

Wednesday, March 16th, 2011

In last nights website update — resistance for gold was listed at 1399-1409 and the high so far is 1406. Support was listed at 1375-1385 and the low so far is 1393.

London Gold Fix $1398.50 -$8.50

With events in Japan capturing the news, the gold market will soon be turning to the beginning of the Indian Wedding seasonal and the market focus on big picture geopolitical conditions in the middle east. The Indian seasonal usually spurs gold buying and forms a seasonal low near this timeframe.

So far gold prices this week seem to be tied to the action in global equity markets and the uncertainty in Japan. Gold overnight did gain some minor support from reports of fresh unrest in Bahrain and oil prices have managed to rebound. Gold and other commodity markets are likely to be watching the quickly changing macro economic cross currents. US Housing Starts and Permits data came out with terrible data this morning but the pullback in gold on the news lasted a short amount of time and gold continues to trade around the 1400 area. PPI data was up 1.6% —- as food and energy led the way. That seemed to have put a floor on gold so far this morning.

While equity markets in Asia and Europe are generally higher this morning, the US stock market opened with moderate losses bu is so far stable today. The Dollar is stronger against most of the major currencies during overnight trading but it does not seem to be affecting gold.

Workers are still attempting to bring nuclear reactors at the Fukushima power plant in Japan under control and continued aftershocks in Japan continue into today. Forces allied with Muammar Gaddafi have succeeded in retaking several towns that were under rebel control. A credit rating downgrade of the sovereign debt of Portugal by two levels. UK Unemployment during January was 8.0%, higher than market forecasts.

Gold seems to be taking more notice of the Bahrain situation as the unrest is escalating there and the people have yet to be quelled by the Saudi forces and the “martial law” that has been announced. The 1000 Saudi forces on the ground has escalated the UNREST and anger.

As soon as the Japan thing quells down — gold will return to focus on the middle east and the Indian wedding seasonal — both of which should lend to increased gold demand at a time when the seasonal weakness is nearing an end. The gold seasonal chart usually shows a mid March low —-and short term trends do favor a low to develop by weeks end.
Going to the chart — we’ve expanded the view today. Observe the two dotted trend lines that are meeting up at the 1395-1405 area. This is where most of the price action has taken place and was basically the focus we discussed on last nights website. THE KEY SEEMS TO BE IF GOLD CAN CLOSE BACK ABOVE THE downtrending dotted line near in the 1406-1412 area. A close above that area would neutralize the sell off and would leave yesterdays LOWS as a CLEARING OF THE STOPS below two key short term trendlines. Should the market close above the dotted line area, it will add to a bottoming potential and will have us looking for a potential trade set up.

In summary — gold is testing its key support area —trying to get back and close above the dotted lines. Resistance for the remainder of the day is the 1408-1412 area and support is the 1390-1396 zone. The day is turning out to be a consolidation day. Watch the action at the dotted trend lines. Favor most of the action and a close near that area today.

by Bill Downey

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