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June 17th Gold Trend Analysis

In last nights website update resistance was listed at 1533-1541 and the high so far today is 1540.50 —- support was listed at 1514-1522 and the low so far today is 1522.60

TRADES: Currently long gold at 1526 — intra day stop at 1518 — WILL SELL position on a close below 1533 today – and look to re-establish Sunday evening depending on outcome. If close above 1533 — hold position.

Some Traders are selling the 1540-1545 area with stops at 1551 — and some Traders are buying the 1520-1525 area with stops at 1518.

CME NEWS

London Gold Fix $1,526.25 +$1.25

The gold market came into the Friday US trade with a pattern of lower highs from mid week still in place. Weakness in the Dollar isn’t being given that much attention in the early Friday gold trade.

The gold market might be partially disappointed with comments from the Fed’s Fisher overnight who suggested that the Fed has made it clear that the US Fed would end QE2 in June. Fisher also made very strong statements toward the US Congress and the need for legislators to “do their jobs” and address the debt situation.
With higher global equity prices this morning and a modest bounce in the Euro, one gets the sense that the Greece situation has calmed somewhat as BLOOMBERG is reporting that a “Bailout” is in the making. Traders should be aware of a Press Conference from European officials this morning, saying they have a “plan” on how to bailout Greece. With former Fed Chairman Greenspan suggesting overnight that the risk of Greece not defaulting was “miniscule” and many players earlier this week openly predicting a complete failure of the Euro zone, the trade has at times this week already assumed the worst for Greece.

While gold temporarily rallied in the face of better than expected US numbers yesterday, and with the data from the US this morning “viewed” as somewhat positive, it has provided the bull’s in gold with a minor lift today.

The US Dollar is weaker against most of the major currencies this morning. The Prime Minister of Greece has appointed a representative of the opposition as the new Greek Finance Minister. The Euro zone Trade deficit during April was 4.1 billion Euro, a larger deficit that projections. Major US economic numbers to be released this morning includes US Consumer Confidence and US Leading Indicators. LEI was up .8% vs .3% expected —strongest read since Feb but due to Interst rate spread, sentiment, and building permits (they were so low that any move helps).

Going to the Charts:

Gold remains inside a wedge that ranges from 1520-1545 —- while a close above 1533 is important today — the real test will be coming in the 1540-1545 area — and a close above that area should lead to a test of the old highs. Watch that upper dotted trendline —- that’s where the short term RESISTANCE is ——- and the lower downtrend line is where support is for the remainder of the day. In summary — the overall trend is neutral — but has a slight upside bias. We favor the upside as long as price is above 1526-1533. A FAILURE TO CLOSE ABOVE 1533 keeps things in neutral mode and like we said earlier — that downtrend line at 1540-1542 is probably the most important line. IN SUMMARY — gold is still considered a trading range until we can close above that downtrend dotted line.

by Bill Downey

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