Submitted by konrad on Friday, April 26, 2013 - 21:21.
The end of the month is always riddled with position squaring sell-offs, which were joined today by profit-taking after this week's mini rally, driving gold and silver down.
Good economic news in Germany - its unemployment rate went down unexpectedly - also helped smother prices. To go along with German improvement, it was also reported that personal income in the United States grew 2.6 in December, the most in 8 years. Atop that, the Chicago Purchasing Managers Index bumped impressively higher, sentiment coming in at 55.6 vs. 50.00 in December. (Good economic news in the big economies almost always means lower prices for gold, and oftentimes for silver. That is, until gold can switch from a weak safe-have asset to a strong risk investment.)
Traders seemed to have focused on the good news in Germany as they ignored the bad. Retail sales were down there. In Italy, bond yields were sharply higher. The euro was higher against the dollar, but dollar weakness couldn't rescue either gold or silver today.
Most analysts, whether fundamental, technical, or some blend of the two approaches, feel that the precious metals are in a neutral zone right now.
It should be kept in mind, however, that February is historically a good month for gold prices.
U.S. payroll figures are due out Friday morning. While there may be some increase from last month's paltry 155,000-job increase, don't bet the ranch on any surprise jump. January is a big layoff month for temporary holiday workers. Predictions are that the unemployment rate will stick at the familiar 7.8% level.
The Wall Street Journal reported today that more than $10 billion worldwide will be wagered on the Super Bowl this year.
If only they had invested that 10 billion in our last recommended trade.
Proper Action:: No open trades as we await a signal
Yesterday we issued a trade target that was hit in both gold and silver:
long gold at 1663 Out at 1681 + 18 dollars or 1800 per contract
long silver at 31.42 out at 32 + .58 or 2900 per contract
Market Forecast: A technical basis today's downside corrective move in both gold and silver has given the technician compelling evidence that the counter wave B has probably terminated or concluded. As our current model was looking for the counter B wave to move within 50 to 75% of the losses seen in our a wave, gold's intraday high of 1685, and the fact that he backed off immediately from there compels us to believe that our current A, B, C corrective model is intact and correct. That being said and with a jobs report due out tomorrow (which is without a shadow of a doubt the most important economic data and report we will see this month), my concern is that we might witness an extremely volatile market as that report is released. Secondly the fact that our current C wave is trading well above the lows found in wave A, it is likely that gold and silver will experience further downside pressure.