The gold market has jumped sharply higher in sync with higher equities and a stronger Euro. Apparently the market thinks the fix is in for the Greek event today, but with US data recently supporting a recovery view, the bull camp in gold might feel like they have a number of themes operating in their favor today. In fact, rumors in the Asian equity markets that the PBOC might be poised to embark on another easing effort, probably gave gold and physical commodity markets a portion of their lift over the last several hours of trade. Another potential positive for gold today, is the positive buzz being generated by the latest product release from Apple, as that has at least partially distracted the trade from an intense focus on Greece. After such a definitive range up move in April gold this morning, the bull camp might need to see something supportive from the US jobs front. In addition to weekly claims, the markets will also be presented with a private Challenger layoff report early in the trading session. Gold also saw generally positive physical gold demand talk from China and India overnight and that joins forces with ideas that the US Fed has continued to foster an inflationary environment with its bond-buying program. It is also possible that gold and physical commodities are seeing some follow through support from news of a noted interest rate cut in Brazil, as that in turn has fostered talk of a series of South American rate cuts ahead. In fact, there would seem to be a long list of central banks that are thought to be into an easing posture. Comex Gold Stocks were 11.441 million ounces up 21,406 ounces. Gold stocks have declined 11 of the last 20 days. The bias is up as gold is benefiting from a number of positives this morning. In addition to easing rumors in China, the market also generally expects to see the Greece situation unwind favorably. With favorable currency market action and noted gains in equities, gold and physical commodities should be able to claw back an even bigger portion of the last two week’s slide in prices. While the gold bulls would like to see positive US data this morning, that might not be as critical to the bull case, with the majority of the outside market influences so positive early in the sessino. We suspect that April gold will now respect even number support of $1,700 and that there might be little in the way of resistance seen until the $1,725 level. In fact, if the markets manage to shift into a pro-growth tilt and equities return to this week’s highs that could pull in even more gold buying later this morning.
COMEX GOLD (APR):The cross over and close above the 60-day moving average indicates the longer-term trend has turned up. The downside crossover of the 9 and 18 bar moving average is a negative signal. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. A negative signal for trend short-term was given on a close under the 9-bar moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside target is 1666.0. The next area of resistance is around 1694.3 and 1700.0, while 1st support hits today at 1677.3 and below there at 1666.0.
StockMarketNews Research Team