Precious Metals Market Comments

by Mike Daly, PFGBEST

1-877-294-4669

mdaly@PFGBEST.com
Friday, February 03, 2012 at 2:15 PM

Gold Closes $19.00 Lower Friday…and settles at $1740.30 for the week….

This week April Gold Futures traded a $47.10 range with a High of $1765.90 and a low of $1718.80 as traders used the week’s economic data to form their strategies. Today’s reading of the January Unemployment rate was down two tenths to 8.3% better than the 8.5% projected.
The U.S Dollar gained some strength as the Unemployment data indicates there is growth in the U.S economy. A weaker Euro also fueled Dollar strength as rumors that Greece Prime Minister Lucas Papademos would resign. There are global concerns that Greece will default on loan payments due in March.  The huge rally in the Stock market has also found Gold traders liquidating their positions in favor of Stocks. Reuters reported  “Iran’s supreme leader Ayatollah Ali Khamenei threatened on Friday (televised speech) to retaliate against the West for sanctions,” this coming a day after a U.S Newspaper said Defense Secretary Leon Panetta believed Israel was likely to bomb Iran within months to stop it from building a nuclear bomb.
A warring environment in that region of the world would threaten Crude Oil production. supply and transportation…This would indicate higher oil prices. Higher Crude Oil is considered to be inflationary. Precious metals traditionally thrive during times of inflation.

THE WEEKS NOTEWORTHY NEWS:

Thursday:

Today the Department of Labor released the Initial Jobless Claims data and it was a better number than expected. It was 367,000 and better than the projected 371,000. Also Ben Bernanke testified in front of House Budget Committee and stated that he sees the U.S economy showing moderate improvement and that the recovery has been frustratingly slow and is concerned that the fragility in the European Union may harm the U.S economy. Germany’s Finance Minister Wolfgang Schaeuble had harsh comments for Greece regarding their debt commitments. Schaeuble stated that “Greece has not done enough to boost their competitiveness” and that “Greece must fulfill its commitments” and added “We can’t throw money into a bottomless pit”….There are still global concerns regarding the enrichment of uranium by Iran. Israel estimated that Iran has the capability to make 4 atomic bombs presently and will have the capability for a nuclear bomb within a year. Traders must continue to eye this region.

Wednesday:

It is my opinion that traders are eyeing the European Union and especially the debt situation in Greece. The debt swap negotiator in Greece continues to say that negotiations continue and they are hopeful that a deal comes together in the upcoming days. There are enormous concerns that Greece will not be able to repay existing loans and are in need of another payout.
Also today Philadelphia Fed Boss Charles Plosser stood by his comments last week saying he didn’t back the FOMC’s 2014 pledge on interest rates. He stated that policy should not hinge on
a calendar date. Traders will be watching tomorrow’s economic data and certainly are waiting on Friday’s Unemployment data before choosing their trading strategies.

Tuesday:

The jewelers of India remain active buyers of physical bullion to meet the insatiable demand for precious metals s the wedding season is in full swing and extends through March.

Monday:

. The bullion demand from India should continue as we are in the early stages of their wedding season. There was a very interesting comment from Philadelphia Federal Reserve Bank President Charles Plosser today. He stated “he projects first FED rate hike in 2012” and said the FOMC must stop thinking and start taking action to do more….

MY SWING NUMBERS 2/6
APRIL GOLD
Resistance # 2……..$1777.00
Resistance # 1……..$1758.00
Pivot………………...$1747.00
Support # 1…………$1728.00
Support # 2…………$1717.00
Volume ……………...142,000

MARCH SILVER
Resistance # 2……...$34.90
Resistance # 1……...$34.33
Pivot…………………$33.82
Support # 1………….$33.24
Support # 2………….$32.74
Volume………………51,000

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