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.
