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July 14th Gold Trend Analysis

In last nights website update — initial resistance was listed at 1595-1607 and the high so far is 1494.50 —– support was listed at 1573-1582 and the low so far is 1579

TRADES — LONG 1 Gold at 1566 — New STOP IS 1538 —- I have an order to long one gold at 1559 (new price). Stop 1538. I have one order to long at 1549.

TRADES —– Long silver at 35.15 and 35.65 —- I have sold the 35.65 long at 38.75 and holding the 35.15 long. — NEW stop is now 34.40 intra day. I have an order to long one at 37.65 to add the position back. Stop is 34.40 intra day.

FED Chief Bernanke is testifying again this morning right now.

CME NEWS

London Gold Fix $1,592.50 +$21.00

The gold market has continued to register widespread concern from a number of different fronts. While the Euro zone situation continues to provide a measure of price support, it is possible that the situation in the US is providing the brunt of the recent buying interest in gold. With a ratings firm putting US debt up for review and some agencies even saying the US will lose its Triple AAA rating, even if they continue to make rate payments, it is clear that the debt ceiling issue is coming to the boiling point ahead of the actual self imposed August 2nd deadline. At least in the short term, it is possible that soft US data might add to the safe haven interest in gold, as a weaker US economy, on top of credit rating concerns probably increases overall concern. The gold market is probably drawing some additional support overnight from news that South African gold production for May decline by 5.8%.

In short, in the face of relatively high historical gold prices in May, gold production declined. However, the gold market is also benefiting from developing weakness in the dollar, which is starting to slide because of the lack of a debt deal and the approach of the debt deadline. At least in the early action today, the Euro zone debt travails weren’t markedly changed, even with the passing of a key debt auction in Italy.

While equity markets in Asia were mixed during the overnight session, stock indices in Europe were generally weaker this morning. US equity markets have stock up almost 100 points in the DOW. The US Dollar is weaker against most of the major currencies, although posting a gain versus the Yen. Euro zone CPI during June was up 2.7% year-on-year, in line with estimates. Fed Chairman Bernanke will testify in front of the Senate Banking Committee at 10:00 AM EST. Major US economic numbers released this morning include the June Producer Price Index, June Retail Sales and Weekly Jobless Claims at 8:30 am est. ( I don’t have the numbers) The last leg of the Treasury’s monthly refunding, a 30-Year Bond auction, will have results announced at 1:00 PM

Going to the Chart

Gold has reached out second target price for the week 1588-1607. There’s a mini purple channel line propelling momentum. The upper end of that line is resistance 1594-1607 —and lower purple line support and FIB retrace at the 1566-1575 area. Best time for a pullback is today —-into Friday morning where GDP data comes out. Target the 1566-1575 area –which is also support for the rest of the day. (WEEKLY SUPPORT NOW 1549-1556) AND THAT AREA could be touched on a spike. (Its also a short term buy area)

THERE IS A SHORT TERM TREND CYCLE THAT IS DUE —See website for details. Best spot for a pullback is the remainder of today. Gold up 110 dollars and MID MONTH IS ARRIVING ———- if you have more than one contract on short term stuff — you might want to take a bit off the table. Watch 1590-1595 today as the key area’s of price resistance

by Bill Downey

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Thoughts
"For a mountaineer, the important things are the effort, the posture and the muscles. The rope that holds him serves no purpose when everything works but it gives him a sense of security. In the same way, all gold does is ensure confidence; it's a safe haven."