Morning Gold Market Report The gold market continues to claw out a pattern of lower highs on the charts, with the most volatility of the Wednesday trade being seen in the wake of the US 1st quarter GDP release. While gold showed two-sided volatility into and after the US GDP number was released yesterday, the market seemed to regain some footing off of the Chicago Purchasing Managers data. While gold could have seen some support from weakness in the Dollar this week, it might take a fresh downside breakout in the Dollar for currency support to surface. In the end, the gold market managed a temporary recovery in the wake of the FOMC statement, but the Fed news hasnt altered the downward bias on the charts. Therefore it is difficult to discard the bearish tilt toward gold today especially given the disjointed to weak US data so far this week. On the other hand, gold did see some attempt to bounce in the wake of the Feds statements, perhaps because some of the Fed statements hinted at the US economy regaining some momentum ahead. Unfortunately investors, traders and economists have become a little impatient waiting on US numbers to get out from under the adverse weather drag and that could make the focus on a very active flow of US scheduled data today much more intense. In short, the focus on the Ukraine has waned and fears of slow US growth has left the bear camp with control. Adding into the bear case is news of yet another decline in gold derivative holdings yesterday, with GLD seeing the lowest holdings levels since early 2009. The bear camp retains an edge unless the June Dollar Index falls below 79.40, US Initial Jobless Claims post a significant decline later today and or the sweep of construction spending, Personal Spending and ISM manufacturing results manage to spark fresh economic optimism. Downtrend channel resistance is seen today at $1,295.90 and support isnt seen until the $1,280.80 level. Pushed to re-enter the long side of June Gold for a position play, we would wait for a bigger washout down to $1,265 to get long under the current bearish fundamental setup.
Posted on: Thu, 01 May 2014 12:58:37 +0000
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