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.
