Comex Gold Futures (continuous) Contract as of the week ending 1st June 2007 showed resilience beyond the call of duty as it found support at the .707 Fibonacci level of the previous run up. It must be noted that there was a change of contract from the June Gold futures to the August contract as volume kicked during the week.

After period of “accumulation” between the .50 (666.20) and the .707 ( 653.10) fibonacci levels before an explosive upward move. Again we must note the change of contract may have had some influence so the coming weeks action will be of great interest.

Considering the overhead resistance Gold is to encounter you would feel very confident as a buyer of Gold at the levels mentioned above and the future prospects of Gold taking out the psychological level of 700.

Obviously time will tell …

If anyone was ever in doubt of the inverse relationship between the U.S Dollar and Gold as the views expressed by Mr. Sinclair take a look at the charts. Where Gold accumulated at the .707 Fibonacci level the U.S Dollar appears to be distributing at the .707 level.

Could we expect a hard downward swing to re-test the .8110 low in the U.S Dollar???

We do have support at the various “Fibonacci Levels” worth looking at, however should Gold continue on its merry way and test the 700 level you could safely bet that the U.S Dollar will give up the ghost and not only re-test the .8110 level but also the .8048 level.

Should those levels of support fall we certainly have history in the making and the 1970’s - 1980 all over again.

Again for a more detailed round up of the markets please review Dan Norcini’s excellent market summaries posted regularly on Mr. Sinclair’s site.

Gold futures after Wednesday 16th May 2007 saw Gold take a fair hit breaking the support line it appeared to be holding at the 666 level, finding support at 660.50 the .618 Fibonacci level.

Gold also found a friend and support from the up-trend line and it remains to be seen if the buyers will find this area to their liking or will the sellers test the stops below???

The long-term trend is still fully in tact even though the sellers are certainly on top of this battle at present. Buyers will want to see the 675 level on any upward move taken out before regaining the confidence for another possible tilt at the psychological 700 level.

The U.S Dollar found support at the .618 Fibonacci level, re-testing the previous .50 Fibonacci level which begs the question how long can the U.S Dollar maintain the little momentum it has surprisingly mustered???

With overhead resistance and considering the March Trade Deficit was larger than expected as ‘inventories’ showing the first monthly decline in almost two years and the Gross Domestic Product (GDP) expected to be revised to below 1% for the first quarter. This influence on unemployment will be interesting looking ahead into the future ….

Core Inflation risks according to the figures are “FADING”???

With Core CPI falling to 2.3% at the upper end of the Federal Reserves comfort zone putting a further hold on interest rates.

The mind boggles as as the price of just about ‘anything’ and ‘everything’ continues to rise all around us that the figures can still show up as they do!!!

Time will tell the extent of this unexpected move in the U.S Dollar and its inverse effects on Gold.

Rest assured the long-term trend is still firmly intact and with economic and geopolitical influences remaining as they ‘were’ it is difficult to see any other long-term direction for Gold and the U.S Dollar then the one that is already in place at this very moment.

Gold action for the week ending the 12th of May 2007 was certainly a battle won by the short sellers. Restricting the Comex Gold Futures Contract from punching through the psychological 700 level which will certainly open the flood gates to bigger and stronger things to come where Gold is concerned..

With heavy selling driving Gold down to the .50 Fibonacci level of the last run up, forming a minor two day double bottom where buyers will be looking to hold for another possible attempt at the 700 level.

Despite the heavy selling during the week Gold still looks strong making higher lows on the Comex Gold Futures Continuous Contract weekly chart. Gold has also major support coming from the “up-trend line”.

So the coming weeks battle will be one of great interest as the ‘war’ continues between buyers and sellers. Lest we forget “Central Bank” selling will become old news soon enough ‘demand’ takes Gold through the 700 level.

As has been mentioned on many occasions Gold and the U.S Dollar have a ‘inverse’ relationship thus it was no sup rise to see the U.S Dollar rally on the back of Gold selling.

Currency traders saw the U.S Dollar break the .50 Fibonacci level re-testing the series of lows and the .618 Fibonacci level but could not sustained the rally and closed below the resistance level for what may become a defining moment in the immediate outlook for the U.S Dollar.

Should the U.S Dollar not maintain its upward thrust the series of lows at the .8113 level will be tested as will the .8035 level.

However should the U.S Dollar continue its upward movement overhead resistance at .8297 and .8319 could be the stumbling block for the U.S Dollar remembering that we are in a long-term “bear” market concerning the U.S Dollar which can be easily appreciated when studying the weekly or monthly chart.

Both charts clearly illustrate Mr. Sinclair’s point of view that the U.S Dollar and Gold have an inverse relationship and longer term charts which we will explore at a later time clearly show the U.S Dollar in a “bear market” and Gold in a “bull market”.

Everything else is just noise …

Gold Futures update as of week ending 4th of May 2007 saw Gold retrace and close slightly above the .382 Fibonacci level of the last run up from the 634.50 low on the Gold Comex Continuous Contract.

One would have to be most impressed with Gold’s resilience and should the buyers win out from here the outlook for a strong upward movement through and above 700 is looking very likely. With immediate resistance coming from the previous 692.50 top and the last 697.70 top one would think Gold’s ability to slice through these levels would see the psychological 700 point taken out and a challenge to the 732 previous top becoming Gold’s next point of resistance.

Many Gold stocks have been getting hammered of late with many making new lows considering the strength Gold is showing and the ever increasing economical problems faced by the U.S on top of the geopolitical troubles and shift you got to wonder how long sellers can keep well managed Gold stocks at such low levels???

A run through the 700 level could well be the kick start Gold shares need for buyers to overrun the sellers and breakout of the present accumulation phase.

The U.S Dollar continues to struggle and even though it has made a modest rally the overhead resistance could prove too much for this “sick puppy”. With the coming week’s Federal Open Market Committee meeting on May 9th, the general consensus is that the Federal Reserve is not expected to take any action on the Federal Funds Rate. The wording of the policy directive will be of most interest.

However as Mr. Sinclair continues with the same mantra he has been preaching for many years now the impact on Federal Tax Revenue as U.S Business rolls over in an environment of rising Federal Expenditures.

This puts enormous upward pressure on the U.S Federal Deficit which in turn puts enormous downward pressure on the U.S Dollar and for the price of Gold puts an enormous upward pressure towards the “first landmark level of $1000.”

Again for a more thorough reporting I recommend the brillant commentary provided by Dan Norcini at JsMineSet.

The Gold Futures Market after taking a hit on Thursday 04/26/07 recovered somewhat on Friday after holding at the .382 (673.8) Fibonacci level and retesting the 677.5 level on the back of a weak GDP figure.

Actually, the growth of 1.3% in the first quarter of 2007 was the weakest in 4 years with housing being the key drag with upward inflation risks remaining quite high. With a busy week ahead regarding the release of more statistics it could be a most interesting week ahead.

After tackling the previous top of 692.5 (Comex Gold Futures Continuous Contract — day traders view the June ‘07 for a better guide) the market was unable to challenge the psychological 700 barrier at its first attempt and corrected back to the .382 (673.8) Fibonacci level before rallying above Friday’s open and above the 677.5 support line.

Should Gold Futures hold firm another attempt at 700 will be in order and to become fully convinced we have gained momentum a 3 day close above the 700 level will certainly bode well for an attempt at the previous major top of 732 (Comex Gold Futures Continuous Contract) and depending on the speed and ease the market takes out this top Mr. Sinclair’s temporary top of 761 comes into play.

Lest we forget we are concentrating on the upside of Gold because we are in an ‘up-trend’ and geopolitical and economical policies and tensions have not subsided, changed or even look likely to change for the better any time soon.

Should the Gold Market correct further you would see major support at the .618 Fibonacci level and the previous top of (660.5) holding true …

Gold stocks have been hit serverely considering the rather small correction and the mounting evidence that we are in a “GENERATIONAL GOLD BULL” run and an ever changing world. One wonders when the investing world ‘wake up’ to potential ‘well managed’ Gold Stocks provide we could see prices in the tune of multiples to where they sit “TODAY”.

The U.S Dollar found temporary support at the .8113 level before a very modest rally to the .236 Fibonacci level of .8162. Next week should be an interesting time for the U.S Dollar as figures being released will determine its immediate reaction but with growing tension between the U.S and Russia, the never-ending violence in Iraq and Afghanistan, the discovery of terrorist cells in Saudi Arabia combined with the increasing imbalances of the U.S Current Accounts and the continuing failure in subprime mortgage loans any rally in the U.S Dollar if it can muster one …. you would think would be short-lived.

Thus, a rally back to the 50% Fibonacci level of .8216 and the .8205 low if possible would provide major resistance and certainly a point of entry for sellers believing in the downward potential that a weak U.S Dollar provides.

NOTE: For a more detailed summation of the markets it is well advised you check the daily updates provided by “Trader” Dan Norcini at Mr. Sinclair’s site JSMINESET. Where you will get trading lessons of the highest caliber for “FREE” …

The week ending Black Friday 13th April 2007 may well go down as the feather that broke the U.S Dollar’s back. As the U.S Dollar closed below the support line of .8205 on the USDX Continuous Futures Chart “Gold” its inversely positioned itself to take out the most recent high (Comex Gold Futures) and resistant level of 692.50.

Should this occur there is daylight between the 693 top and the 732 top.

Thus such a move in Gold could be quite forceful overshooting to “Mr. Sinclair’s” temporary or minor top of 761.

With China’s emergence as an economic powerhouse U.S authorities attempt to toughen their stance towards China regarding their trade surplus with the U.S. Unfortunately proposed tariff and import duties on Chinese imports into the U.S threatens the “FREE” International Trade structure which has bode well for the International Economy most recently.

The ramifications of a ‘trade war’ are certainly a lower U.S Dollar but also the loss of one if not the biggest financier of U.S Debt. However it could harm the standard of living of almost everyone globally. As foreign trading partners match and expand such tariffs, causing trade to possibly slow dramatically causing widespread pain especially to developing countries.

As one can well see the recent developments regarding trade sanctions or penalties have done the U.S Dollar no favors …

Even though a lower U.S Dollar does increase the attractiveness of U.S exporters somewhat.

The use of trend lines, support and resistance lines and parallel lines are simple to use and interpret even though they may look confusing at first glance.

After a period of time the skill becomes an art form and can be used to great effective over any time frame, any market on any chart.

Acting and reacting on the interpretations becomes intuitive again with practice and experience …

Looking at the Gold Market week ending April the 6th 2007 you would have to be quite happy seeing the Gold making an upward move to take out it’s most recent high of 692.5. Even though many Gold stocks have refused to follow the move upward in physical Gold it is only a matter of time when the dollars begin to flood the market in search of quality stocks in a very small capitalized market.

Can you visualize the outcome when the penny drops???

Below is a Comex Gold Futures chart following on from last weeks market action ….

Now let us look at the U.S Dollar’s performance or lack of for the week ….

Last week we had a “MAJOR” development quite unexpectedly and very politically motivated regarding the placing of tariffs and duties on certain China imports into the U.S.

Monty Guild Of Guild Investment Management Site believes …

“The surest way to destroy the world economy is to damage free trade. The potential for wealth destruction caused by tariffs, import duties and the failure to allow and encourage free trade will undoubtedly be much more damaging than ten crises like the subprime debacle”.

Even though the U.S Dollar made a late recovery on friday the dollar’s outlook is not bright looking into the future …

Next week we have an interesting week regarding the release of Crude Inventories, FOMC Minutes, Treasury Budget, Trade Balance and Core PPI figures. Stay tuned as the market reacts and digests the news …

Gold Futures as of March 28th 2007 and as seen from a ‘daily’ prospective looks very healthy for Gold’s future. After a reaction to 636 from a high of 694 it has made a steady path to a .618 fibonacci resistant point. One however, would like to see the Gold Futures cross the previous high of 694 and then on to take out the 732 top before forging its way to 760ish in the near term and looking at ‘geopolitical’ issues that are brewing today the chances of a near term rally by the Gold Market is quite strong …..

Now if we look at the geopolitics of the day one would immediately surmize that the Gold Futures destiny is in taking out 694 & 732. Does anyone honestly believe that the current Middle East crisis will be resolved without any fall out???

Obviously history has little meaning or consequence to those that make decisions effecting so many. This discussion I will leave for another day …

Gold is the inverse of the U.S Dollar without question but the influence and the significance of geopolitics must never be under estimated as the world today is being divided and carved into sections of influence with plenty at stake which will determine ones existence for generations to come ……. lest we try as a race to live as one a fact that appears lost with most world leaders as they scramble over each other for the precious little resources we have become so reliant on.

Our role in this Universe is to Grow and Pro-Create but at what cost???

Again I will discussion geopolitical, issues at another time as it is of the utmost importance and effects the direction of the Gold market in the short term with knee jerk reactions which could be the very catalyst that catapults Gold prices into the stratosphere.

For now take a look at the U.S Dollar Futures contract as of March 28th 2007 and you will automatically see that it is in a disaster zone with little hope of coming out of it unscathed at the moment.

One sick puppy wouldn’t you agree???

Whilst Gold Futures has an inverse relationship with the U.S Dollar, the U.S Dollar reflects the health of the U.S economy and basically how the international economies and players interpret the reports on such healthiness.

Gold in turn is the ultimate currency and thus when there is trouble on the horizon there is rush or stampede to acquire it. It is also the most frustrating of markets as the Gold Futures and Gold Shares can and are easily manipulated due to the size (market capitalization) or lack of but only to a certain degree as any market will do what it ‘naturally’ has to do in time.

It will be my goal to interpret and explain to the best of my knowledge, ability and skill (and I hope to do it justice) the formula presented by Mr. Sinclair …….