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June 3rd Gold Trend Analysis

In last nights website update — resistance was listed at 1540-1544 and the high so far today is 1547 —— support was listed at 1519-1526 and the low so far is 1523.80

As we discussed on the website — traders are selling 1542-1547 with stops at 1555 and they’re buying it at 1526 with stops at 1516. So far that has played out as those ranges have been touched. It will be interesting to see who wins. The downside has the edge — and if your looking to sell it —- this 1542-1545 area is the spot to do it — with stops at 1555.

TRADES:

I SOLD GOLD 1543.50 ————— with current at STOP at 1555 — be careful.

CME NEWS

London Gold Fix $1,531.00 -$8.25

While the bull will point to the capacity to trade above the prior closing level in the Friday morning trade, there are some fundamental fears that are serving to limit the upside this morning. In addition to fears of another Chinese tightening move, the gold market was also showing periodic concern of noted slowing in the Euro zone. Add the US monthly non farm payroll readings of 54K (MINUS 206K when you take Birth/death model out–thanks Darth) has gold trading between 1533-1547 in wild swings.

Indian gold prices overnight failed to give off definitive direction perhaps because a well respected international bank overnight expressed some concern that the end of QE2 in the US might weigh on gold prices before the end of this month. However, gold is garnering some support from the dollar market action this morning, as the Dollar at least temporarily reached down to the May 6th level. Some gold traders suggest that crude oil prices below the $100 per bench market level have dampened inflationary expectations and typically slack inflationary expectations and fears of slowing aren’t a very supportive environment for gold prices.

While equity markets in Asia and Europe were mixed during the overnight session, US equity markets have opened with 120 pt losses in the DOW. The US Dollar is weaker against most of the major currencies, although posting gains versus the Pound. Reports indicate that Greece is willing to accept deeper austerity measures in return for additional aid from the IMF and the EU. China has started to impose tighter capital requirements for their major banks. A survey of Euro zone non-Manufacturing industries was at 56.0, higher than expectations.

Going to the Charts:

Price resistance is the lower mini red channel line —– gold must close above there to keep the upside potential into next week. AS LONG AS WE CLOSE BELOW THE LOWER red line — the potential to move back towards 1520-1530 is in play for Monday. TENSIONS in the Middle east —-are spiraling up — and that is the one thing that could keep the upside pressure on gold.

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."