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June 15th Gold Trend Analysis

In last nights website update resistance was listed at 1526-1533 and the high was 1526. Support was listed at 1506-1516 and the low so far is 1514.

TRADES: In the GOLD SHORT POSITION —- I HAVE MOVED MY STOP DOWN TO 1524 break even.

CME NEWS

London Gold Fix $1,517.72 -$2.25

While the gold market at times yesterday was able to mount a rally, the market ultimately seemed to behave like a commodity market facing a slackening global economy. With both US and Chinese economic data on Tuesday was not as weak as expectations, that seemed to provide fleeting support to gold prices, but ultimately the gold market lost its bullish buzz at our resistance area of 1526-1533

In the overnight action, gold temporarily made a bid to rise above the prior session’s high, but that move wasn’t sustained into the US Wednesday morning trade action. Some players suggested that gold was drafting off concerns from Bernanke, that the US should avoid using the threat of a technical default to reduce spending, because the repercussions of such a move could be very dire. However, the gold market this morning is not capturing a bid in sovereign debt concerns, but the US DOLLAR is and gold prices (so far) is charting a weaker course. THIS IS SUBJECT to change as economic data arrives this morning.

In looking ahead to the US economic report slate today, the market is generally expecting to see minimal gains in the readings and that might support the Dollar, but the data might also actually serve to reduce inflationary expectations further.

While equity markets in Asia were mixed during the overnight session, stock indices in Europe are generally weaker this morning. Early indications are that US equity markets would open with moderate losses later on today. The US Dollar is sharply higher against most of the major currencies this morning. Workers in Greece have begun a nationwide strike to protest upcoming austerity measures for their nation. A major ratings has warned of a potential downgrade for several large French banks due to their exposure to Greek sovereign debt. French CPI during May was up 2.2% year-on-year, lower than market expectations. UK Unemployment during April was 7.7%, in-line with forecasts. Euro zone Industrial Production during April was up 0.2%, higher than expected.

Major US economic numbers released this morning include the May Consumer Price Index (UP .3%) higher than expected, but the NY Fed’s June Empire State manufacturing survey came in at 7.8 vs 11.9 — ADDING pressure to the stock market side of the equation as NEW ORDERS went down and the Employment section DROPPED.

May Industrial Production and Capacity Utilization up only .1% to 76.7% — lower than expectations , and a survey of the US Housing Market at

GOING TO THE CHARTS:

Gold reached the “edge” of where price either supports or breaks towards 1498-1505 as the lower purple channel line has been tested three times in the past three days…… with each low just a bit higher and enough to provide support. AS LONG AS THIS AREA HOLDS —the potential for gold to forge an attempt to bottom from here and move higher remains a potential. Today is also a KEY CYCLE day which can bring a lot of price movement as we discussed on the website last night. It is one of those days where a big drop can develop in markets — but also a day where reversals can also happen.

Resistance for the remainder of the day remains 1526-1533 and if support is broken on the channel line a move towards 1498-1505 could develop.

by Bill Downey

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