May 4, 2013 - 10:04pm
If you were asleep during the overnight session in Asia, count your blessings. You awoke to gold coming off a pounding and rising, then holding gains throughout the day in New York. At 44:45 NY time, gold is up over $11 and silver slightly off to unchanged.
Today's current rise comes on the heels of a number of weak economic reports, worldwide and in the United States.
The International Monetary Fund predicted lower worldwide economic growth for the remainder of this year and %4 for 2014. The IMF has also firmly come down against austerity.
IMF managing director Christine Lagarde said at the the spring meeting of the IMF and the World Bank in Washington, DC, that the rally in financial markets "is clearly not translating into a sustained pickup in growth and jobs -- what really ultimately matters to most people." This is what the Federal Reserve has been saying, what China has been saying, and (finally) what Japan has been saying. The lumpen laggard has been Europe and Europe is hurting the entire world economy and the effort at austerity there is being led by Germany.
It is hard to describe exactly how irresponsible Germany has been in this regard. But, they are manipulating the E.U. for their own national gain as some countries with decent economic vitality struggle. It is not only bad policy, it is immoral.
Some scattered news in the United States also stoked the idea that the Federal Reserve will not soon stop quantitative easing.
The Philadelphia Survey (index) of economic conditions fell unexpectedly in March. Industrial activity fell extremely from 2.0 on the Fed gauge to 1.3.
At the same time, new hiring fell by 4,000 people last week, an indication of only modest growth in the labor force.
A series of uninspiring - that is, mixed - earnings reports from the equities sector pressured stock prices. The S&P fell to its lowest levels in six weeks. This is an important trend for precious metals traders, especially those in gold.
Earnings are projected to rise only 3.2% overall for S&P 500 companies for the first quarter of this year, a steep departure from growth of 6% in the same quarter of 2012.
This brings us full circle to global economic conditions. "The revenue side of the equation looks challenged on the whole," said Bill Stone, chief investment strategist at PNC Asset Management Group, referring to the earnings shambles. "That's a testament, unfortunately, to a global economy that continues to struggle." The dollar was softer, and another outside market bearing on gold, crude oil, firmed then rose after suffering a strong reversal in Asian overnight markets.
As always, wishing you good trading,
Gary S. Wagner
Executive Producer/The Gold Forecast
On Skype Gary.S. Wagner
Market Forecast: On a technical basis there can be no doubt but there is still strong consistent selling pressure in both gold and silver. Specifically in gold there have now been three attempts to drive prices above the psychological $1400 per ounce mark, and have been unsuccessful. That being said it must also be noted that when trading in Hong Kong push the market to recent lows last night (1336), it was met with incredibly strong buying as we witness gold prices quickly push off those lows to move back to 1403 is an intraday high before selling off of the highs. Today’s video will specifically look at the fact that we now have a range within gold prices. It will look at and suggest short-term strategies which in essence are simply looking to trade the range. Specific strategies will be highlighted during today’s presentation.
Sell gold (go short ) above 1400 (with stop above 1411) and buy at current support of 1340
See previous weeks in Historical Commitments of Traders Reports.
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