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.
Today’s Gold session produced another all-time High ($1276.50) and covered a trading range of $30.50.The initial rally was fueled by lower Gold production news from Russia.
The news indicated a 3% decline for the first 7 months of 2010. Normally Gold bugs are not concerned with supply indicators but with the recent physical buying demand it is a valid concern.
The Gold continued to rally off of weaker Industrial Production data out of the European Union. Production rose 7.1% year over year however, this was less than the 8% projection. This along with the United Kingdom higher than expected Consumer Price Index sparked inflationary worries. Savvier investors realize that Gold and Silver are a safer haven in times of economic crisis. They have a history of retaining value better than most commodities.
As the market rallied it proceeded to take out key resistance levels as well as touching off stop-loss orders on its way to new all-time highs. Also remember the month of September is a historically a very strong month for Gold. This is the month the Wedding and Festival seasons begin in India and China. The demand for physical Gold during September through December is insatiable.
My Swing Numbers For 9/15 (December)
RESISTANCE # 2……………$1295.00
RESISTANCE # 1……………$1284.00
PIVOT………………………….$1265.00
SUPPORT # 1………………..$1254.00
SUPPORT # 2………………..$1235.00
Mike Daly / Gold Specialist
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