Gold Marketwatch – 30/4/2009
Posted April 30, 2009on:
Gold opened at 896.50/897.50 and quickly rallied on short covering before
key economic data, peaking at 902.00/903.00. Annualized GDP fell below expectation causing the equity markets to slip and gold followed. The metal dipped to an intraday low of 895.20/896.20 before gaining momentum on the back of a weaker USD. Resistance was found near 900.00 and it traded lightly for the remainder of the session as investors stepped back before the FOMC rate decision. The session quietly unwound at 900.00/901.00. As expected the rate was left unchanged and gold was swept lower, triggering stops through 900 usd/oz, reaching an after-the market low of 892.00/893.00.
Gold is back at 900 following yesterdays technical drop to 885. We are neutral at this point but are closely monitoring the large trend line resistance that now comes in at 912 and dropping. This line is drawn off 1006, 966 and 918. We would view a move above 918 as bullish leading to another test on 966. The neutral view is also open to a break of 885 testing major support at 866.
Pivot – 898.57
Primary Support (Buy) – 878.58
Primary Resistance (Sell) – 912.83
At the end of last week China announced that it had nearly doubled (76% to be exact) its official Gold Reserves as held by its central bank. The announcement topped off a 5 percent climb in price for the week, from which profit-taking by traders has set in over the past few days. This author deems the Chinese announcement to be one of those rare watershed moments in time of such significance that the truly appropriate course of action should not be that of traders cashing out with paper profits but rather that of accumulators “golding in” with physical metal. As we work our way toward the articles dealing with the expansion of China’s gold reserves, we’ll broaden our view of the news to include a barest smattering of articles released earlier this month — just enough to help build some useful context for the monetary evolution that is continuing to unfold in an ever-more public manner.