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Crude Oil
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Gold
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Weak

Gold Chart of The Week

Each Week Longleaftrading.com will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.

Weekly Gold Report (February 25th through March 1st)

It was a gut wrenching week for those who stayed long practically anything outside of the US Dollar or the Soybeans last week. Most commodity prices saw their fair share of selling mid-week after it was rumored that a large commodity fund was taking gains in a few markets to defend another large position that they found themselves on the wrong side of. While the name of the fund or the positions are still unknown, I can only guess the fund was taking gains in long positions in the Crude Oil to defend long positions in the Metals. On Wednesday, the Crude Oil Futures took a bath early in the session and selling pressure even carried over into the Thursdays trade before consolidating on Friday. Other commodities were pressured throughout the week as the US Dollar rallied ahead of the release of last months FOMC Minutes. There was nothing particularly shocking about the report as traders expected to hear that FED officials would still be at odds regarding the duration of Quantitative Easing. On top of this release, the market also had to deal with politicians in Washington, who began their media smearing of one another regarding the upcoming Sequester, which must be decided by March 1st.

Now flash forward to last night, when suddenly all of last week’s data and concerns have seemingly vanished from the equation. Apparently, markets are pricing in a few things that should restore faith to the long side of the markets and will have shorts on the defensive. Thus far, the story is that there is expectation that the upcoming election in Italy will be favorable for the Euro as it rallied almost 200 points from last week’s low. This bump up put pressure on the Dollar and aided commodities in correcting a piece of last week’s fall.

While Italy steals the show in the early going, the United States will take the reins following the election outcome. Congress will resume the sparring after a week-long recess and we should all expect a continuation of name calling and finger pointing as politicians drag out their decision on spending cuts until the eleventh hour on Friday. Ben Bernanke will provide testimony on economic policy on Tuesday to the Senate Bank Committee and on Wednesday to the House Financial Services Committee. I do not expect any major surprises from either of these testimonies, but it is certainly worth noting. There are also a string of reports before Friday for the US to report, including Q4 GDP, Initial Claims, and Consumer Confidence.

Looking back at the Daily Chart of Gold from last week, it would have been a great short in the early part of the week, but those who did have a big decision to make now. The Futures are correcting a bit and are trying to inch their way back into the range. Last week’s low price has me a bit puzzled, but I think a failure to rally back through $1600 would be telling. With all of the important data to get through this week, including the big decision in Washington, I feel it would be best to look at most markets, including the Gold with shorter term trading in mind.

If you would like to speak with me directly about shorter term idea in the Gold, please feel free to call or email me directly. You can reach me at (888) 272-6926 or by email at bbooth@longleaftrading.com.

Thank you for your interest,
Brian Booth
Senior Market Strategist
bbooth@longleaftrading.com
888.272.6926

** There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data contained in this article was obtained from sources considered reliable. Their accuracy or completeness is not guaranteed. Information provided in this article is not to be deemed as an offer or solicitation with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this article will be the full responsibility of the person authorizing such transaction.

Comments

  1. James Fuller says:

    I'm long on gold anyway it goes, I see a down turn further because of the
    US action on debt corrections and an actual surplus supply of Gold because
    Of India's recent tax hikes on imports. In 3 months we will witness the Bric
    Bying madly as well as central banks. We are not out of the woods yet on world
    Debt being massive and signs of more bailing to stimulate hahaha the very thing
    That got us to these gold prices is ready for the second round.

  2. Rasesh Shukla - iNDIA says:

    Now Every possibilities are depended on"Next Month and Next Quarter Gold price movement.......meanwhile every bounces are just Technical only......be cautious, down trend remains yet.

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