Here at Goldcoin.org we regulalrly feature expert Analysis from Bill Downey of Goldtrends.net to keep readers up to date with possible moves in the market.

Bill’s comments are drawn from a wide variety of sources and provide an up to date overview of the evolution of the gold price.

Here what Bill is saying:

In Sunday nights website update — resistance for today was listed at 1483-1490 and the high so far is 1476.50 — support was listed at 1458-1463 and the low so far is 1464.50

London Gold Fix $1469.50 -$1.00

Late Sunday night in the US and early in the Asian Monday trade saw commodities on the rise. However, news of a possible Peace deal in Libya and another 7.1 earthquake in Japan seemed to prompt a pause in oil price upside and in other commodity markets.

News of ongoing inflows into gold derivatives at the end of last week is lending to gold support so its generally a sideways choppy action we are undergoing this morning. The reversal in oil prices seemed to shift the attitude in a number of commodity markets this morning to a more sideways movement. With the big rise last Friday in commodities, it looks to be profit taking at the moment and not a start of a downtrend.

The Bretton Woods meeting hosted by George Soro’s over the weekend has calls for the US dollar replacement — but that was to be expected. The G20 meets in Washington DC on the 15th of the month and it would be interesting to hear the conversations that will take place there. With that meeting coming up at the end of the week — it is possible that gold may stay have some restraint later in the week, but the overall short term trend is still up.

The US Dollar is slightly bouncing this morning back to the 75 level but remains at key levels on the long term charts.

The Commitments of Traders Futures and Options report as of April 5th for Gold showed Non-Commercial traders were net long 230,758 contracts, an increase of 16,775 contracts. The Commercial traders were net short 287,091 contracts, an increase of 23,006 contracts. The Non-reportable traders were net long 56,332 contracts, an increase of 6,229 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 287,090 contracts. This represents an increase of 23,004 contracts in the net long position held by these traders.

A 7.1 magnitude earthquake hit near the Tokyo area today, causing water pumping at the Fukushima plant to be shut down for 50 minutes. Major banks in the UK were told to raise their capital levels and separate their retail operations from investment banking activities. Chinese Exports during March were up 35.8% year-on-year, while Chinese Imports during March were up 27.3% year-on-year, both of which were above market expectations.

Going to the gold chart — the breakout from a five month trading range last week is in play and while there is consolidation today from last Friday’s upmove — it does not look like a downtrend is beginning at the moment.

A new red line on the chart shows the short term FIRST support for this weeks action near the 1455 area on a closing basis. Additional support would be the 1444-1450 area on intra day pullbacks. THus the two key areas are the red trend line —and the lower purple line on the up channel. As long as price is above those price areas — the trend remains up. Resistance is the upper purple line near the 1490 – 1492 area.

In summary, todays consolidation in the 1460 area is normal after a nice upmove from last Friday and the bulls still have the short term advantage. First support will be the Red trend line — and resistance for the remainder of today looks to be in the 1473-1478 area. A pullback in the 1445-1455 area this week might provide an area for finding initial support. The bulls still have the advantage at the moment and the action does not at this point indicate that the trend has turned down — but rather is consolidating in the 1460 zone.

by Bill Downey

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People often ask if it is the right time to buy gold?

Quite simply it is always the right time to buy gold if you are looking to protect and preserve your wealth.

Sure the price can vary but the real value in owning physical gold is that it is your outright property which cannot be wiped out during a crisis or financial collapse. So think of a stocks and shares investment (or any other “paper” investment) the day after a crash – now think of physical, tangible gold assets that you own the day after a crash. The difference is obvious – one is worthless and may even lead to debt, the other has inherent value that will still be sought and can therefore be traded or sold.

Buying gold nowadays is simple and accessible to everyone.

You do not need to physically possess gold at home to fully participate, indeed quite the contrary – keep it safe, keep it in a vault and keep it accessible to sell whenever you choose.

For further information click here.

Here at Goldcoin.org we have regularly championed this view which is explored below in an article written by our guest writer Angela Brown.

With the present condition of the United States, most people are looking for ways to boost their income resources and protect their savings. As the debt level is rising, more and more people are finding themselves drowned in an ocean of credit card debt. While some of them are choosing debt management as an option, some are trying their luck in the investment industry to augment their income and help themselves come out of debt. Inflation is a general increase in the price of commodities when your money is worth less. Well, you need not fret as there are ways of safeguarding your savings by investing in gold. Gold has been a haven for the most fearful investors to protect their savings from financial crisis.

How can gold act as a hedge against inflation?

In case of inflation, the prices of commodities rise and this reduces the value of money. $1 will be able to buy fewer amounts of things during inflation. The pressure that is created on the Federal Reserve in America and the European Central Bank in Europe ensures that money has lost its value. The side effect of such inflation is that more money is injected into the economy but with lesser worth.

Gold, the most precious metal, in recent times is seen as the safest haven for investors who are spending sleepless nights due to the fear of a crisis and the devaluation of the money. Most often you will see that whenever there is a decrease in the value of a dollar, the price of gold will rise. A falling dollar is most often directly proportional to the surging gold price. As an investor, therefore you can certainly invest in gold to stay protected during any financial circumstance. Inflation can not take a toll on your financial life if you have already invested your money in gold.

As gold is bought and sold in US dollars, any decline in the value of the currency will lead to a price rise. The US Dollar is the world’s reserve currency and the primary medium of all transactions. But without the backing of gold, the US dollar is worth nothing more than a fancy piece of paper.

Gold has often been referred to as the crisis commodity as it has the capacity to outperform all the other investment forms. The very same factors that can have a positive effect on the other investment vehicles can have a positive effect on gold. Therefore, if you’re a debtor who wants to invest money to make money, you can try gold investment and stay protected against all financial odds. You may also try getting help from a debt management program to combine your payments and repay your creditors.

If this article has encouraged you to think about gold please consider the following;

Protect your wealth in Gold and protect your future –  LinGold.com makes Physical Gold Investment accessible to everyone, 24/7, on-line in real time and offers innovative ways to start investing such as the World exclusive LinGold Savings Plan.

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The Trend for Gold continues upward and the Dollar is falling again – so says Bill Downey of GoldTrends.net, our regular expert Analyst. Her’s the latest from Bill for April 8th:
In last nights website update initial resistance was listed at 1462-1468 and the high so far is 1473. Support was listed at 1443-1449 and the low so far is 1466.

London Gold Fix $1470.50 +$14.00

The June gold contract in the early Friday action has moved to fresh new all time highs. In addition to ongoing concern of a US government shutdown, the gold market also saw a sharp range down extension in the Dollar overnight and therefore the bulls have a lot of fundamental arguments for the upside. In addition to the potential failure to reach a budget deal, the gold market might also be rising off the fact that the US budget cuts are minimal in the grand scheme of the multi-trillion dollar US budget! In other words, leaving US government spending high and the deficit growing is seen as an inflationary development, and as a development that weakens the Dollar and lastly increases the move to quality sentiment in the gold market off the rising prospect of a US credit rating downgrade. Those same ratings agencies that were grilled by Congress over their slack pre-sub prime ratings efforts, should probably slap US debt with a downgrade once the puny US spending cuts are put in perspective.

While the gold market could have been held back by news of a rise in Gold Fields quarterly gold production for their 1st quarter, that potential production gain actually follows a decline in gold production from that company in the previous quarter. Nonetheless, the gold market hasn’t paid that much attention to the supply side of the equation recently.

With some budget negotiators calling for a mid morning deadline on a deal this morning, there could be two volatility events today, one this morning and another into the afternoon closes in the event that no deal is reached.

The Dollar has GAPPED lower against most of the major currencies during overnight trading as the credibility is fast eroding and the break at the price chart is causing selling and shorting. Problems in Libya and Nigeria as well as escalations in Syria and the middle east continue to add pressure on oil prices as well.

In summary — the metals continue higher as the gold breakout of a five month pattern is suggesting the move will continue higher. We may see some traders taking some profits off the table as we go into the weekend —and that could keep prices range bound going into 11:30AM est as London comes up on the close — but there seems to be buyers in the mid 1460’s.

Support for the remainder of the day is the 1457-1464 and resistance is the 1475-1480 area.

Going to the gold chart, the consolidation over the past few days has held the initial breakout and the upside continues to be favored. The next upside target is the upper purple line near the 1500 area. Pullbacks today should be limited to the mid 1460’s. As long as price is within the purple channel lines — the trend remains up.

If the US government come to terms later today — it could produce some volitility — but the bottom line is that none of the problems are going away — deal or no deal.

A CLOSE ABOVE 1466 is an important number today to set the pace for next week. The trend remains up.

by Bill Downey

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In last nights website update resistance was listed at 1437.50-1446 and the high so far is 1439. Support was listed at 1419-1425 and the low so far is 1430.

London Gold Fix $1434.50 +$2.00

There is a lot of cross current news this morning moving gold.

Gold prices were showing some positive action initially overnight despite minor strength in the Dollar versus the Euro and a few others. The gold market got marginal support from suggestions from the US Fed Chairman Monday night who labeled inflationary pressures as transitory, as that seemed to suggest that the Fed chief was a little less confident that inflation would indeed remain in check. In other words, the trade seemed to take the Fed comments overnight as a sign that inflation pressures were being acknowledged but were not fully entrenched yet. However, the Fed Chairman also suggested that recent price gains were probably temporary and that left the gold market somewhat confused. Indeed — he looked nervous during the discussion.

The gold market garnered some support from news of a credit downgrade of Portugal overnight, especially since the ratings suggested that the status of that debt remained under review.

Gold traded in the 1434 to 1439 area up until the London open. However, outside market action have limited gold prices early in the trade today, as some commodity markets like corn corn and soybeans started out on a softer footing–at least initially.

The gold market was also undermined by news of further Chinese tightening action overnight. The Chinese moved 25 basis points on lending and deposit rates and that event probably increased overhead resistance in the US gold market this morning near the 1440 area. Still — the last few rate increases from China had almost no effect — pretty much about what we’ve seen so far today. Over the last four hours — gold has tried to break below the 1430 area. Each hour has

The gold market will also be watching the GOP budget proposal release later this morning, as aggressive deficit reduction efforts could also be seen as a limiting development for gold prices. Paul Ryan has rolled out the plan and the big number is 6.2 TRILLION DEFICT REDUCTION OVER 10 YEARS —– The proposal was just released — so it will take a few days to see how the market absorbs this and how the debate unfolds.

Meanwhile the US BUDGET DEFICIT CEILING runs out FRIDAY — and the politicians are going back and forth in threats to not extend the ceiling on the Republican side.

While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally lower this morning. The Dollar was slightly higher against most of the major currencies during overnight trading, although posting a substantial loss versus the Pound.

A credit ratings downgrade of the sovereign debt of Portugal by one level this morning. Euro zone Retail Sales during February were down 0.1%, lower than expected. Major US economic numbers released this morning include a survey of US non-Manufacturing industries grew less than expected, but it wasn’t a barn burner.

GOING TO THE GOLD CHART — today we show the daily chart and the short term cycles we follow on the website. Orange circles are when the stronger trends usually peak — and the blue circles are when the weaker trend usually ends. While not all points work — take February for example — there is enough to at least keep an eye on developments. The trend is still up —- watch 1439-1444 as a key area.

On the downside — there has been a test every hour since 7AM EST of the 1430 area but so far it is holding— and that puts SUPPORT for the remainder of the day at 1425-1430. As long as price is above that area — its still up.

In summary —- the trend remains up —-We think that 1439-1444 is the PIVOT PRICE AREA TO WATCH — and closes above 1444 would increase the potential for the upside. PRICE ALWAYS RULES — but these short term trends need to be watched going into Wednesday. AS LONG AS PRICE HOLDS 1425-1430 support today — continue to favor higher.

by Bill Downey

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In last nights update resistance in gold was listed at 1437.50-1446 and the high so far is 1439. Support for today was listed at 1419-1425 and the low so far is 1427.60

London Gold Fix $1432.50 +$1.50 LME

While the Dollar is slightly higher early, the Greenback remains within striking distance of last week’s lows. With the gold market overnight seeing a rather hot ECB inflation reading and seeing crude oil prices claw out another fresh new high for the move and a host of commodity prices trading higher, the gold bulls feel somewhat confident to start the new trading week.

Some players in the market expect some dovish comments from the Fed’s Bernanke today and after dovish dialogue from the Fed’s Dudley at the end of last week, the threat of rising US rates may become an issue but so far — it seems to be just talk. There is a G20 meeting mid-month so that’s something we’ll have to keep in mind.

Some players think that news of a release of RAD into the ocean in Japan is a limiting issue for gold, but one could also suggest that development could ultimately be inflationary if Japan is forced to seek alternative protein in the grain and livestock markets.

The Commitments of Traders Futures and Options report as of March 29th for Gold showed Non-Commercial traders were net long 213,983 contracts, an increase of 3,448 contracts. The Commercial traders were net short 264,085 contracts, an increase of 1,242 contracts. The Non-reportable traders were net long 50,103 contracts, a decrease of 2,205 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 264,086 contracts. This represents an increase of 1,243 contracts in the net long position held by these traders.

While equity markets in Asia and Europe were mixed during overnight trading, early indications are for the US stock market to open today’s session with moderate gains.

The Bank of Japan’s Tankan survey of Japanese manufacturers projects that business conditions in Japan will worsen during the next three months as a consequence of the Sendai earthquake.

A Libyan envoy has traveled to Greece to begin discussing an end to hostilities in that nation. The US State Department is flying their employees out of Syria due to continued unrest.

Euro zone PPI during February was up 6.6% year-on-year, in line with market forecasts.

Going to the charts ……………..

On Friday’s update we discussed the tendency for gold to move higher after the USA unemployment data and after hitting a low of 1412, gold rallied back to the 1430 area for the close.

Coming into today and the 1439 high — it really comes down to whether gold is going to burst through the 1444 area this week. A WEEKLY Friday close above 1436 — and 1444 is needed to add to the upside potential. Although the trend is still up — the stronger trends we watch are due to peak here between today and Wednesday and a weaker trend is scheduled to begin and last into mid-month. Price always rules — and turn points are secondary — so we would want to see price begin to react and show weakness before we consider that the weaker trend has kicked in. But it’s something we need to be aware of should gold begin to trade lower. First Targets for this coming week to watch for is the 1440 to 1453 area. I’m looking to sell 1/2 my long short term gold positions from 1406 and 1418 should we trade up to the 1450 area.

The chart shows two red arrows —- the lower arrow shows the Feb lows how the market pulled back to 1325 on four occaisions in one week but was not able to break lower. The same condition happened last week — where there were four pullbacks to the 1410-1412 area — all of which produced a nice bounce back up. The lows were right on the lower purple channel line on the chart. This kind of action usually favors higher prices.

Thus, from a swing trade standpoint — as long as we remain above the 1408-1410 price area on a closing basis — the trend is still up.

Resistance is the 1439-1447 area today and first support is the 1427-1432 area.

In summary — the gold market trend is still up. A daily close above 1436 and/or 1444 would be helpful and favor higher prices into Tuesday/Wednesday. Going forward —- as we mentioned — the potential for gold to peak this week and begin a sideways to lower trend into mid month is a consideration when we look at short term cycles. However the seasonals do favor higher overall into the month of May so an April pullback — should still garner higher prices into month end and early May should we get a pullback. The trend is still up.

by Bill Downey

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Here at Goldcoin.org we have previously discussed the moves in Utah to introduce its own gold currency, Gold currency is making a comeback! In Utah, they could soon be buying a hamburger with gold! and noted that progress was made by the passing of a bill in Utah Gold Currency a step closer.
However, Utah is not alone.

There are no fewer than 12 other States which are pushing for a return to gold currency by introducing bills before the Legislature in the form of the ”Constitutional Tender Act”.
The 12 States are:
Colorado
Idaho
Indiana
Montana
Missouri
New Hampshire
North Carolina
South Carolina
Tennessee
Vermont
Virginia
Washington

The “Constitutional Tender Act”

The United States Constitution declares, in Article I, Section 10,
“No State shall… make any thing but gold and silver coin a Tender in Payment of Debts”. This means that no State can make something a “tender in payment” (which means they cannot “make something an offer as payment”) for any debts, which would include debts owed by and to the State.
However, EVERY State in the United States of America HAS made some other “Thing” an offer as payment – they have by law declared that they will accept, and pay out, Federal Reserve Notes for any debts owed by or to them.
Therefore, every State is in violation of Article I, Section 10 of the U.S. Constitution.
Thus the need for the “Constitutional Tender Act” — a bill template that can be introduced in every State legislature in the nation, returning each of them to adherence to the United States Constitution’s actual legal tender provisions.

Most importantly the bills are aimed at protecting the people from the continued devaluation of the dollar and almost certain hyperinflation which is due in the future.
It is also seen as a way for States to insulate themselves from the policies and practices of the Federal Reserve which seems to be pursuing the inflationary practice of monetizing the national debt to address the consequences of runaway federal spending.

The Privately Owned Central Bank

Did you know that the Federal Reserve is a private institution with link shareholders? Most folk believe it is a federal agency.

Fed shareholders earn 6% interest “by law” and as for reserves, well they have none. The only thing the Fed does is create paper and charge the government interest for doing so. It also has licence to print “paper money” that is not backed by assets. The more it produces the more the value of the dollar is diluted. The $800 Billion it has printed for QE2 are merely bits of paper with ink on them that eventually some average Joe will be charged interest for using or borrowing. In reality the money doesn’t exist just the debt it creates.

Individual states have not issued legal tender for over a hundred years so why now?

Because the weakening of the dollar by the Fed to essentially reduce the size of the national debt has also eroded the savings of citizens, the price of their houses, the worth of their pay cheques and eroded their purchasing power at a time when inflation is rising but wages are stagnant. Enough is enough.
History is on the side of the people here. In the original drafting of the Constitution the Founders disliked “paper” money so much they provided specific wording against it.
The transcript of the debates in the original Constitutional Convention shows the attitude of the Founders toward paper money was one of disgust. In debate one delegate, Roger Sherman, called for the insertion of an absolute prohibition against states issuing their own paper money.

Mr. Wilson and Mr. Sherman moved to insert after the words ‘coin money’ the words ‘nor emit bills of credit, nor make any thing but gold and silver coin a tender in payment of debts’ making these prohibitions absolute…

Mr. Sherman thought this a “favourable” crisis for crushing paper money.

The Founders voted to adopt Sherman’s “crushing” of state-based paper money.

As for the federal government, the original draft of the Constitution included language permitting the federal government to issue unbacked paper money. The Founders objected strongly to this power. The objections were summed up by delegate Oliver Ellsworth:

Mr. Elsesworth thought this a favourable moment to shut and bar the door against paper money. The mischiefs of the various experiments which had been made, were now fresh in the public mind and had excited the disgust of all the respectable part of America. By witholding the power from the new Governt. more friends of influence would be gained to it than by almost any thing else. Paper money can in no case be necessary. Give the Government credit, and other resources will offer. The power may do harm, never good.

Those who wrote the Constitution decisively stripped the federal government of the power to issue inconvertible paper money. And stripped it stayed… until, temporarily, during the Civil War. Saving the Union was of transcendent importance.
For most of American history dollars were convertible into gold or sometimes silver.
It is a 20th century innovation to have unconvertible money

On April 19 1933 Franklin D Roosevelt took the US off the Gold Standard and Americans had to exchange their gold for paper dollars at $20.67 an ounce (so a dollar was approximately equal to 1/20th of an ounce of gold). This was the start of the Great Confiscation which lasted until 1975.
In 1945 The Bretton Woods Agreement created a “Gold exchange standard” whereby the US promised to fix the price of gold to $35 an ounce (the dollar therefore was worth 1/35th of an ounce). The dollar therefore became the world’s reserve currency and was used for international trading and commerce, notably for the quotations of oil. Therefore all other currencies were effectively pegged to the dollar and therefore gold. At this point “paper” money had a reference value and theoretically could be exchanged as originally intended for a specific weight in gold.

However, in 1971 Richard Nixon suspended the convertibility of the dollar into gold because of the huge US debts following the Vietnam War. This was another nail in the dollars coffin. The gold price was approximately $41 an ounce ( so a dollar was worth 1/41th of an ounce). This also effectively unhinged all the other currencies from a gold standard as they had all been pegged to the dollar. The Demonetization of gold was completed by the Jamaica Agreement. This meant currencies could freely float in value up and down which they did. It marked the first time in history that only Fiat currencies existed (i.e. unbacked currency).
President Nixon announced this as a temporary suspension.

Nixon Lies again and again

President Nixon made certain promises to America when he suspended convertibility of the dollar. August 15, 1971:

“I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold ….

Now, what is this action–which is very technical–what does it mean for you?

Let me lay to rest the bugaboo of what is called devaluation.

If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less. But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.”
The dollar has actually lost 3848% of its value when measured against Gold since Nixon declared this.
An ounce of gold is today quoted at $1420 (rounded up) which means that a dollar is technically only worth 1/1420th of an ounce compared to 1/41th of an ounce when Nixon made his declaration.
This steady erosion of the worth of a Dollar is exactly why there are calls for a return to gold currency or gold-backed currency in 13 States with others already contemplating the same.
One can understand the concerns and the choice between paper dollars or a piece of gold to preserve your wealth seems self-evident.
Just in case let’s check the value of the Dollar expressed in Gold.

Value of US Dollar expressed in Gold (ounces)
1933	1945	1971	2011
1/20	1/35	1/41	1/1420
0.0500	0.02857	0.02439	0.00070

From Confiscation until Bretton Woods 12 years later the Dollar lost 175% of its value against gold (an average of 14.58% per annum).
From Bretton Woods created the standard until Nixon removed it 26 years later the Dollar lost 117% of its value against gold (an average of 4.5% per annum).
In the last 40 years since Nixon unhinged the Gold Standard, the US Dollar has lost 3484% of its value against gold (an average of 87.1% per annum).
In a total of 78 years since confiscation in 1933 the US Dollar has lost over 7142% of its value against Gold (an average of 91.56% per annum).

So the period of greatest stability for the Dollar was with a Gold Standard and Confiscation still in place.
The most unstable period for the Dollar was when neither of these was in place as is the case today.

If the Dollar continues to falls by at least the average for the last forty years, bearing in mind that current world events could add to its woes, then it would be worth 0.00009 ounces of gold or 1/11111th of an ounce within a year – that gives a gold price of $11,111 an ounce.

It is especially pertinent when one considers the strength of an investment over time – Gold is anti-inflation and anti-crisis. It will always maintain real value, worth and purchasing power which can be traded and wilfully accepted in exchange for the necessities of life. This cannot be said for paper money which as history has proved time and again eventually becomes a worthless piece of paper whose only real value is its calorific heat value for burning!
This illustrates exactly why the peoples of Thirteen States are leading the charge to convert to a gold currency that maintains real value rather than be chained to the US Dollar which will only be of value for fire-lighting very soon.
It is inevitable that currency must be established against a fixed reference for it to have any real value and this road will always lead back to Gold as history has proved.
If you’ve never bought Gold before then maybe now is a good time before your savings literally go up in flames.

No-one has a crystal ball to look into the future. However, this did not stop Rob McEwen, Chairman and Executive Director of Minera Andes and US Gold Corporation, from voicing any doubt in his belief that if the current trend continues the price of gold might reach $5,000 an ounce over the next three to four years.

McEwen based his predictions on the constant demand for gold from sovereign states, central banks and investment funds which are quoted on the stock market. Moreover, he justified this time frame and the forecast of $5,000 based on the historical price of metal and the ratio for the Dow Jones share gold index since 1970.

“Gold is used as an insurance by poor governments”, stated the executive during a mining conference being held in Hong Kong. What is certain is that no-one is in a position to say that McEwen does not put his money where his mouth is: this businessman has ensured that some 90% of his own personal assets are deposited in physical gold and he added that he owns a 31% shareholding in Minera Andes and 20% in US Gold Corp, both based in Toronto.

Currently the price of gold is over $1400 an ounce owing to the fear of investors about the situation in Libya and Japan. Since last year, the doubts caused by a global economy not managing to recover from the international financial crisis which broke out in 2008, has made gold into the asset preferred by investors who are looking to get out of “paper money”.

In these times, the economic uncertainty has become more accentuated owing to the risk of default by Portugal which is in the middle of a political and economic crisis which has led to the fall of the Prime Minister José Sócrates. According to some European sources, the financial rescue of Portugal will cost in the region of $100 Billion.

Last nights website update listed resistance at 1437-1446 and the high so far is 1436.50 — support was listed at 1419-1425 and the low so far is 1413.

The big factor supporting gold recently has been inflationary expectations, which were given a boost yesterday by strong rallies in grains and livestock as well as ongoing strength in crude oil. Comments yesterday from the Wal-mart CEO that consumers face “serious inflation” seemed to be laying the groundwork for higher retail prices ahead.

With a new month — and a new Quarter — the Media is really spinning the data of a US economic recovery as the new hires came in at a plus 212K this morning. The spin of course is that the feds are going to be able to stop printing and supporting the economy……….and to carry it further, they will also begin to talk tough on how they are going to curb inflation — when in fact they are the reason for inflation. Media is spinning that the stock market had its best quarterly gain in 13 years, and manufacturing is having a great year and the unemployment rate is going down. This spin of course is to lead the market to one conclusion — that the feds could increase interest rates…………….to which we say………….. not at the moment.

Underneath it all —- the US Dollar — has rallied very strong against the yen again this week in what must be considered intervention. But it has been enough to rescue the dollar from its precarious position on the charts.

The news has produced a hard sell off in the metals so far this morning. One item we discussed last night was that the short term stronger cycles were due to peak between today and this coming Wednesday. But since the Metals usually exhibit strength at the beginning of a new month — the key now will be to see if Gold can stabilze here and regain it’s composure going into today’s close. This has also often occured on these report days for the metals so it is not out of the question for gold to bounce back as the day wears on — and is another factor we discussed in last night’s update.

Going to the chart — we can see that today’s sell off was once again a 4th TEST of the 1410-1412 area and another hit on the lower purple channel line.

Perhaps more important is the failure for gold to have closed above the 1436 area we’ve been watching for. This remains an important price point. Support is the 1410-1415 area for the remainder of the day —-and resistance is the 1423-1429 area and then 1436.

In summary — a bounce back from the lows is underway — and if gold can remain firm and push up into the close it will keep the trend up. Any close below the lower purple line will put the upside in question.

From a historical standpoint — short term trends are due to peak in the first week of April — and last into mid month. Closes below the lower purple channel line will add to that potential. We’ll pick it back up next week. Lets see if gold can push back up as we move into the close. As long as we remain above the purple channel line — the trend is still up.
What we want to see now — is a strong finish for the metals.

by Bill Downey

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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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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.

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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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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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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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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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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