Gold price tumbles on reports of de-escalating Middle East tensions
Gold plunged 3% after Axios reported that Israel and Lebanon have accepted the terms of a ceasefire agreement.
This week the Globex February Gold market traded a very choppy and volatile $41.90 as better than expected U.S jobless data is helping to fuel optimism concerning the U.S economy. The weekly Initial Jobless Claims was reported to be 404,000 and better than the 420,000 that had been projected. This week’s stronger U.S Dollar also added to the price decline in the precious metals as it made the dollar- denominated gold more expensive for investors holding other currencies.
The Gold closed at $1341.00 for the week and settling at a levels not traded since 11/17/2010 (2 months)…. This has certainly been strong retracement from the $1432.50 high made on December 7th 2010. However, we have been stating for almost a year that indeed the Gold market has been in overbought territory and in need of a retracement. The Gold and Silver market have made their accent to these lofty levels due to the economic climate of the globe. There are still many concerns world-wide as we’ve noted by the recent rate hikes from central banks primarily China and Thailand to name a few in order to curb their countries historically high inflation… we also have seen the Greek Bonds reduced to junk status….It is my opinion that this recent sell-off is needed to offset the “top heavy” over-bought status that was the gold and silver markets. I had felt the Gold and Silver had lost buying momentum as the U.S economic data has been showing some improvement. But we are a long way from being out of the woods…….
There is still an overwhelming demand to own physical bullion and this recent price dip may offer investors globally the opportunity to purchase both Gold and Silver at bargain hunter prices… Let us remember the last time we were trading at these levels (11/17/20100) three weeks later (12/07/2010) we were trading at $1432.50…. We as Gold bugs are aware of how quickly the price of Gold can fluctuate . .. If indeed the world is coping with both Inflation and European debt crisis it is important to realize that historically both Gold and Silver tend to retain their value better than most commodities during times of economic crisis…..
MY SWING NUMBERS 1/24
FEBRUARY GOLD
Resistance # 2…….$1355.00
Resistance # 1…….$1347.00
PIVOT………………….$1342.00
Support # 1…………$1335.00
Support # 2…………$1329.00
Mike Daly / Gold Specialist
PFG BEST [email protected]
877-294-4669
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