-- Posted Friday, 1 May 2009 | Digg This Article
| Source: GoldSeek.com
June Gold: Open= 888.9 High= 890.8 Low= 880.5 Last= 885.5 -5.7
A few commodity sectors enjoyed broad rallies today, mainly energies and grains, which saw gains from 3-6%. Even copper managed a 3.0% pop in prices has traders found some silver lining in the ISM and Consumer Sentiment surveys released this morning. Though the manufacturing sector saw a contraction for the fifteenth straight month, the last four months have seen the contraction pace slow down. If the trend holds up, the ISM could well return to ‘stable’ this quarter.
This information, coupled with the business inventory report from yesterday provides a glimmer of hope that business production could increase sometime late in the second quarter and into the third quarter. Increases in consumer spending will cause businesses to order shipments of new products (as inventories are low). This sense of cautious optimism, however, did not spill over into gold, which dropped roughly $5 an ounce today.
Heading into next week, attention will be paid to Thursday, the new release date of the bank stress-test results. The government delayed the announcement in order to work with the banks to ensure a smooth delivery of these results and hammer out any last minute negotiations of exactly what information will be included.
Two of the largest banks, Bank of America and Citigroup, are displeased over how they think the information will be portrayed. Overnight, Citigroup sold off their Japanese bank unit in order to raise some $8 billion in case ahead of the stress-test results. The government has said that it will not allow any of the banks to fail. How banks will raise private capital if deemed to be holding a poor balance sheet remains a big unknown. Odds are that the government may have to step in and pony up borrowed taxpayer money if the results are overly negative. Even so, gold has been unable to find much buying support.
Since the short-term trend in gold is down, and still can be defined as a correction, bulls ought to wait for confirmation of strength before getting long. Buyers should be looking for a close above $916 before getting long. A break below the double-bottom at $865 would suggest a leg down towards the $820 level.
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.
To open an account and receive trading recommendations on gold futures or options contracts (also stock indices, energies, currencies, etc.), or to use our online paper trading service BriteTrak, contact me at tom@altavest.com. Visit www.altavest.com to request a Free Trading Kit. Keep in mind that there is risk of loss in all trading.
Thank you,
Thomas Hartmann
Altavest Worldwide Trading, Inc.
800 994 9566 x109
949 488 0545 x109
Fax 949 488 7625
-- Posted Friday, 1 May 2009 | Digg This Article | Source: GoldSeek.com
