-- Posted Friday, 13 March 2009 | Digg This Article
| Source: GoldSeek.com
April Gold: Open= 925.0 High=941.1 Low=919.6 Last= 929.3 +5.3
Despite it being Friday the 13th, today was relatively quiet and calm in the market. Gold failed to hold a rally above overhead resistance but is holding positive for the day. A quick look at outside markets show the US dollar is quietly lower; stocks are extending their longest gaining streak of the year; and news that the Chinese premier, Wen Jiabo, is very concerned about the $1 trillion invested in the US failed to raise any concern whatsoever. A good day indeed but can it last?
Premier Wen Jiabo, of China, has been closely monitoring the US economy and is concerned about the safety of Chinese assets there. He said, "I do have some worries. I would like...to once again request America to maintain their trustworthiness, keep their promises and guarantee the safety of Chinese assets."
China is the largest foreign creditor to the United States and the US simply cannot afford to default on its debt obligations or it very much risks an unimaginable clash with the Chinese. China finds itself is in a troublesome position of almost being forced to finance the US in order to help boost its own export business or face a much deeper slowdown in GDP. The situation is akin to a catch-22, but perhaps a better analogy is that of a Cold War strategy: Mutually Assured Destruction. Neither the US nor the Chinese can risk loosing the support of each other, at least not presently.
The United States has laid down a budget and spending priorities that will, for the foreseeable future, be reliant on borrowing. The Chinese, in contrast, are looking internally to find means to grow and strengthen their domestic demand base. Eventually the Chinese will divest more and more capital from the United States, not in a malicious intent, but to better preserve capital. When this happens, will the US have other suitors lined up to keep up our spending habits or will our fiscal habits have changed?
However, for today, traders finished the week on a relatively calm note and may revisit the Premier’s comments next week after enjoying at least one weekend of the new year without worrying too much about Monday’s open.
The sideline may be a trading stance some might want to take until more consistency is seen the markets. The dollar has been negative all day, and as weakened further late in the session, yet crude is still down hard and gold manages just a small bounce. Right now there is little rhyme or reason as to what is the driving force behind moves, and that makes for very tough trading.
For now, the trend-line for gold is still at risk for being broken and the technical picture won’t be cleaned up until prices move above $944.00.
Review charts on these markets here www.britefutures.com. Remember that futures and options can be used for bullish or bearish positions; feel free to contact me to discuss trading strategies. Each contract/option = 100 ounces, a $1 move in a futures contract = $100.
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Thank you,
Thomas Hartmann
Altavest Worldwide Trading, Inc.
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-- Posted Friday, 13 March 2009 | Digg This Article | Source: GoldSeek.com
