Gold Closes $23.20 Lower…($23.20) And Settled At $1360 For The Week. Another rate hike from China kept the selling pressure on the precious metals markets as many traders had predicted in the wake of rate hikes from Thailand and South Korea. This week the Gold and Silver markets could not extend early momentum due to the overwhelming rumors of rate hikes that eventually became factual. Despite these rate hikes we are still trading around the $1360.00 level as of this post. These levels may offer bargain hunters the opportunity to re-enter the market. We learned today that Greece’s Bond rating has been lowered to “JUNK” status….
This report is obviously not a good indicator for the European Union. This week had one simple theme “FEAR OF INFLATION”…..this was the reasoning behind all the rate hikes from the Central Banks…..Historically Gold and Silver retain their value better than most commodities during times of crisis….High inflation is normally “BULLISH” precious metals….However, anytime Central Banks raise rates it is normally “Bearish precious metals”. This indicates to me that the Globe is very concerned about the state of Euro region as well as the U.S “Quantitative Easing 2” policy…Anytime you print more money…it is worth less…. And since the worlds commodities Gold, Silver, and the Energies are based off the U.S Dollar it Is apparent the world wants a strong U.S. Dollar.
THIS WEEKS HIGHLITES………….
Weekly Jobless Claims reported that first time applicants for unemployment benefits was 445,000…This was expected to be 410,000. FOMC Chairman Ben Bernanke while attending a panel concerning small business stated that the FED see’s the economy strengthening however, the unemployment isn’t falling at a pace the FED would like. There also is NO doubt the globe is concerned about world-wide INFLATION.
*South Korean’s Central Bank raised rates by .25 basis points….this was done as an anti-inflation measure..The BOK has hinted that they will raise rates .25 basis points every quarter to curb their high inflation……
*Thailand’s Central bank raised for the fourth time in six months the bank raised their rate .25 basis points “in light of rising inflation”….
*There are indications that the Central Bank of India is about raise their rates…..
*There are also indications that Poland’s Central Bank will raise rates soon. Poland’s inflation rate has reached a 11 month high
*the 10 member Board of the Central Bank of Chile are split in their consideration of a rate hike……
*EXPECT OTHER NATIONS TO FOLLOW SUIT………
Despite all these Central banks raising rates…..Gold remains resilient…so far Gold covered a $ 38.30 RANGE this week…..
MY SWING NUMBERS 1/18
February Gold
RESISTANCE # 2…………………….$1387.00
RESISTANCE # 1…………………….$1373.00
PIVOT ………………………………….$1364.00
SUPPORT # 1………………………..$1350.00
SUPPORT # 2………………………..$1341.00
March Silver
RESISTANCE # 2……………………$29.32
RESISTANCE # 1……………………$28.82
PIVOT………………………………….$28.46
SUPPORT # 1……………………….$27.96
SUPPORT # 2……………………….$27.60
Mike Daly / Gold Specialist
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mdaly@pfgbest.com
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