Technical Forecasts

Resistance:	1.0207	1.0225	1.0250-60	1.0275-80
Support:	1.0178	1.0154	1.0140	1.0103-23

BIAS: If this is to rally it needs to do so now…
MAIN ANALYSIS: As described yesterday the upside was always going to be limited and price didn't even reach the 1.0225 resistance. This is still the key resistance and if there is to be a stronger recycling higher then we need this to break. Once above 1.0225 we should see extension to around 1.0250-60 for a correction and once that is complete the next target should be the 1.0300-18 area. This peak should provoke only a minor correction - around 20 points - before extending to the 1.0384 -1.0433 area.
COUNTER ANALYSIS: However, if 1.0220-25 caps and we see a break below 1.0154 the risk will be for extension to the 1.0115 low. Around here - could be just below or just above - should see a correction higher. Only below 1.0090 would extend losses to 1.0058 at least.
For more information regarding the support & resistance and medium term outlook please see the attached PDF file.
Good trading
Ian Copsey



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Bullion Round Up

Official trade data released earlier showed that Chinese exports grew 14.7% from a year earlier in April, while imports grew 16.8%, bringing the country’s trade surplus to USD18.6 billion for the month, above expectations for a surplus of USD 15.05 billion. However, analyst Zhang Zhiwei of Nomura questioned the data and implied there were financial manoeuvring by exporters and speculative capital inflows to mask weakness in real demand (Reuters). The better than expected Chinese data helped Asian stock market to post modest gains.

Chinese Gold consumption increases by 26% in Q1 of 2013 – with sales of jewelleries high on demand as consumers flock to take advantage of the April selloff. China Gold Association confirmed a total of 320.54 tons of gold consumed in China alone but other places such as India, Dubai and the US also have a large appetite for physical demand. The current buying frenzy helped a rebound in gold’s price but analysts feared that the rebound may not last as we draw closer to $ 1500, physical demand may start to ease off. Investors who missed out on the great sales are waiting on the side-line for another price selloff before buying.
Despite the strong price rebound, daily ETF outflow continues as hedge funds and retail investors drawn to the strong equities rally.

Precious metal faced strong headwinds due to the lack of safe haven demand. Equities are acting as a better alternative given that bad economic data become a reason to expect longer duration of QE which support stocks, while good economic data seems to reinforce that buying stocks is the way forward.
Commodity trader Dan Norcini simply summarise his argument “In Short, it is a ‘no-lose-scenario’ for hedge funds”. He added that the central bankers are pumping more liquidity to prop a higher stock market but warned that the unconventional method could undo all the positive sentiments. There were questions raised with regards to how much higher could stocks go should company fail to produce good earnings figures?

Gold Technical

Gold continue to trade in the range of $ 1440 to $ 1488 and today rebound higher to retest $ 1468 after a retest to previous low at $ 1440. China insatiable physical demand has helped to support a higher gold price despite the continuous ETF outflow. Technically, gold continue to trade in the uptrend line basis the daily chart and yesterday put up higher prices on the back of a weaker US dollar index. The rally remains cap as equities rally continues to take the shine off precious metals. Should we see a slight correction in the equities market, gold could potentially benefit to retest the resistance level at $ 1488.
We would like to repeat our advice from our previous commentary that the gold market could see possible slowdown in physical demand which may weaken gold rebound. In addition, continuous outflow of funds from ETF only increase selling pressure. Investors who are still holding will be wary of a possible margin call again.

Resistance: $ 1488, $ 1496, $ 1525 Support: $ 1440, $ 1425, $ 1404, $ 1325

Bearish – target $ 1424

Bearish – revisit previous low at $ 1325

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Silver Technical

After the better than expected Chinese data, Silver rallied to $ 24.08 but failed to keep its gain. Prices faltered lower and trade at $ 23.80 area where the market open. The positive takeaway is that silver have rebounded from Tuesday low of $ 23.48 and posted higher high and low. The white metal continue to consolidate but the longer it take to do so, the more vulnerable it will be for short sellers to add pressure. Despite a weaker US dollar index, silver did not manage to take full advantage of it.
We continue to warn that the rebound could be on its last leg and a break below the lower trend line (Daily Chart) could spell more downside pressure on the white metal. The market remains bearish and this rebound could prove short lived as the speculators are positioning for more price weakness in the next few weeks.

Resistance: $ 24.82, $ 24.91, $ 25.59 Support: $ 23.26, $ 22.88, $ 19.00

Bearish – break below $ 23.20 could see a retest of $ 22.00

Bearish – a retest of $ 22 is possible and could go lower to $ 21.00 or $ 19.00

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Daily Reports (Trends, Precise Entry & Exit levels and Strategies) on 36 Crosses and Spot Gold. Also provide Live Trade Signals on a daily basis.

SPOT GOLD

SPOT GOLD closed @ 14580 which was BELOW the open and was within prior day's trading range. The High was 0.5 Dollars from Precise Trader's Res Zone 1 and the Low was 3.5 Dollars from Precise Trader's Sup Zone 5 (U Turn Zone).
The Hourly Oscillators are Bearish and the Price is Below the MA, so the Bulls have to be Sidelined. Hourly Trend is Sideways while 14730 holds and Daily Trend is Limited Down while 15630 holds, so expect the price to be Choppy until Breakout.
The Daily Closed S1 ,is in a Range with a Downside bias and 8545-95 are the Bearish Violation Zone . The Patterns are suggesting a range with a potential to break lower. The 15min is in a Range until the breakout . The Bearish Violation Zone is 8430-8475 levels and the PT Anchor Low/ High is 8350-8420 levels.

USDSGD

Market Summary USDSGD closed @ 12335 which was ABOVE the open and was within prior day's trading range. The High was 10 pips from Precise Trader's Res Zone 2 and the Low was 15 pips from Precise Trader's Sup Zone 1.
Trend The Hourly Oscillators are Bullish and the Price is Above the MA, so the Bears have to be Sidelined. Hourly Trend is Turning Up while 12265 holds and Daily Trend is Sideways while 12530 holds, so expect the price to Turn Up Soon, so the Bears may stay Sidelined and the Bulls get ready to pull the Trigger.
Patterns The Daily Closed > R2,it is creeping higher and it is in a Corrective Up Mode and 12395-12445 are the Bearish Violation Zone . The Patterns are suggesting higher highs are expected. The 15min is creeping higher and expected to continue up. The Bullish Violation Zone is 12270-12300 levels and the PT Anchor Low/ High is 12330-65 levels.



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Daily Reports (Trends, Precise Entry & Exit levels and Strategies) on 36 Crosses and Spot Gold. Also provide Live Trade Signals on a daily basis.

USDCHF

USDCHF closed @ 9480 which was ABOVE the open and breached the previous day's high. The High was 20 pips from Precise Trader's Res Zone 5 (U Turn Zone) and the Low was 5 pips from Precise Trader's Sup Zone 1.
The Hourly Oscillators are Bullish and the Price is Above the MA, so the Bears have to be Sidelined. Hourly Trend is Sideways Up while 9385 holds and Daily Trend is Sideways Down while 9575 holds, so expect the Price to be Choppy with a potential to Break Higher.
The Daily Closed >R5 ,it rallied higher and the Bullish Violation Zone is 9415-9330 levels. The Patterns are suggesting higher highs are expected . The 15min has marched higher and any pullback lower should be limited . The Bullish Violation Zone is 9375-9340 levels and the PT Anchor Low/ High is 9470-9510 levels.
BULLS:**** *9470*** *9435*** *9400*** *
BEARS:*** *9525**** *9560*** *9615
Today's Strategies:*** *LONG near 9470 9450 with a tight stop with a 35-50 pips price target.

AUDUSD

AUDUSD closed @ 10090 which was BELOW the open and breached the previous day's low. The High was PRECISELY at Precise Trader's Res Zone 4 and the Low was PRECISELY at Precise Trader's Sup Zone 5 (U Turn Zone).
The Hourly Oscillators are Bearish and the Price is Below the MA, so the Bulls have to be Sidelined. Hourly Trend is Sideways while 10215 holds and Daily Trend is also Sideways while 10505 holds, so expect the Price to be Choppy until the Breakout.
The Daily Closed < S2 ,it plummeted with a Downtrend Mode and 10265-10340 are the Bearish Violation Zone . The Patterns are suggesting that we may pause or be slow for a while before the next phase down. The 15min is in a Range but it is in a Downtrend Mode . The Bearish Violation Zone is 10215-65 levels and the PT Anchor Low/ High is 10050-10120 levels.

USDCAD

USDCAD closed @ 10070 which was ABOVE the open and breached the previous day's high. The High was 10 pips from Precise Trader's Res Zone 1 and the Low was 5 pips from Precise Trader's Sup Zone 1.
The Hourly Oscillators are Bullish and the Price is Above the MA, so the Bears have to be Sidelined. Hourly Trend is Turning Up while 10015 holds and Daily Trend is Sideways while 10195 holds, so expect the Price to Turn Up Soon, so the Bears may stay Sidelined and the Bulls get ready to pull the Trigger.
The Daily Closed > R1 , is creeping higher and looks like it may have bottomed and 10225-80 are the Bearish Violation Zone . The Patterns are suggesting higher highs are expected . The 15min is in a Range but the low may have been seen.



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Daily Reports (Trends, Precise Entry & Exit levels and Strategies) on 36 Crosses and Spot Gold. Also provide Live Trade Signals on a daily basis.

EURUSD

EURUSD closed @ 13045 which was BELOW the open and breached the previous day's low. The High was PRECISELY at Precise Trader's Res Zone 1 and the Low was PRECISELY at Precise Trader's Sup Zone 5 (U Turn Zone).
The Hourly Oscillators are Bearish and the Price is Below the MA, so the Bulls have to be Sidelined. Hourly Trend is Sideways Down while 13160 holds and Daily Trend is Sideways while 12845 holds, so expect the Price to be Choppy with a potential to Break Lower.
The Daily Closed >S4 ,it is at the bottom of the daily trading range and the Hourly looks vulnerable for a downward move and 13050-12845 are the Bullish Violation Zone . The Patterns are suggesting a lower lows but the break of 12990-55 is needed by the Bears. The 15min is within the down channel 12975-13050 levels it is in a Corrective down phase until 12955 is cracked . The Bearish Violation Zone is 13145-75 levels and the PT Anchor Low/ High is 13010-50 levels.
BULLS:** **12975 ****12930 ****12880 ***************
BEARS:*** 13075*** *13115*** *13145
Today's Strategies:*** *SHORT near 13080 13110 with a tight stop with a 35-50 pips price target.
*
GBPUSD

GBPUSD closed @ 15450 which was BELOW the open and breached the previous day's low. The High was PRECISELY at Precise Trader's Res Zone 2 and the Low was 10 pips from Precise Trader's Sup Zone 4.
The Hourly Oscillators are Bearish and the Price is Below the MA, so the Bulls have to be Sidelined. Hourly Trend is Sideways Down while 15380 holds and Daily Trend is Limited Up while 15265 holds, so expect the Price to be Choppy with a potential to Break Lower.
The Daily Closed R8 ,it broke out of the Range and making new highs and 9820-9730 are the Bullish Violation Zone . The Patterns are suggesting higher highs until the Price target is reached. The 15min is marching higher and we may see 10180 before reversal . The Bullish Violation Zone is 9880-9925 levels and the PT Anchor Low/ High is 10050-10100 levels.


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Bullion Round Up

Chinese aunties defy Warren Buffett perception on gold and their purchases are supporting the current rebound. Chinese demand for the yellow metal in physical form is insatiable – given the lack of other investment opportunities in China. Could this all change in the near future as Chinese consumers are introduced to financial products such as ETFs in the near future or has confidence in paper gold eroded? Some argued that the purchasing power in China is tremendous and most sought gold for long term investment such as wedding gifts or as family heirloom to pass to future generation. With real estate prices at all-time high and a stock market which only allow one to profit if it goes up make gold a lot more appealing. However, there was real concern among analysts that this rebound will not last. “Further drops may not spur as much buying because consumers will likely hold off, waiting for it to hit a bottom”, said Larry Cho, an analyst at CIMB Securities HK Ltd in Hong Kong.
What if gold price is a misinterpretation of few in the Wall Street against the masses in the Maine Street?
Gold bugs will argue that such distortions have increased over the years after the 2008 financial crisis as one after another; central banks just cannot stop the money printing programmes. However, there is no inflation as wages remain depressed and unemployment remains at an all-time high in the Eurozone area and the US unemployment rate continue to stay above the target set by the Fed. Even if they hit target, Fed Bernanke insists that unwinding the QE programme will be another complications. Global stock market continues to rally higher and making new record.
We have questioned the current Bull Run – QE-fuelled stock market; as to whether it is sustainable at all? It is another caveat for economic leaders to think while trying to move forwards cautiously with any reforms or policies they might implement. What more harm can be done when they are already knee deep in unconventional policies? We will worry that later in the future.

Gold Technical

Early Asia trading hours, gold traded as high as $ 1476.60 before breaking lower to retest support at $ 1459.87 – post US jobless claim. The better than expected numbers sent shiver among gold investors and the selling activity took gold down right before the release of the data. Does that mean that certain group knows a better than expected data is due or they are just pure lucky to bet the right direction? Other indicator such as June Crude Oil took a beating as well – which tend to indicate a weaker precious metal. The US dollar recovered after posting a low of $ 81.81 and post jobless claim data, it rose to a high of $ 82.24. All of these add selling pressure on gold and hamper any upside rally.
We look to short gold should it test the following area $ 1490 – 1510 as it has the potential to retest previous low at $ 1325.
We would like to repeat our advice from our previous commentary that the gold market could see possible slowdown in physical demand which may weaken gold rebound. In addition, continuous outflow of funds from ETF only increase selling pressure. Investors who are still holding will be wary of a possible margin call again.

Resistance: $ 1488, $ 1496, $ 1525 Support: $ 1440, $ 1425, $ 1404, $ 1325.

Bearish – target $ 1445

Bearish – revisit previous low at $ 1325

Silver Technical

Silver prices could not benefit after the better than expected jobless claim data despite testing a high of $ 24.20 but soon traded lower to retest support at $ 23.73 which held for now. Failure to keep gains and any momentum to trade above $ 24.00 has raised many questions of its ability to break higher. Silver prices suffered as gold did, the strong US dollar index hamper any potential rally. The white metal continue to consolidate but the longer it take to do so, the more vulnerable it will be for short sellers to add pressure. Technically, the daily chart shows a Bollinger band that is coming closer to a breakout. At the moment, the risk for further correction is higher.
We continue to warn that the rebound could be on its last leg and a break below the lower trend line (Daily Chart) could spell more downside pressure on the white metal. The market remains bearish and this rebound could prove short lived as the speculators are positioning for more price weakness in the next few weeks.

Resistance: $ 24.82, $ 24.91, $ 25.59 Support: $ 23.26, $ 22.88, $ 19.00.

Bearish – break below $ 23.20 could see a retest of $ 22.00

Bearish – a retest of $ 22 is possible and could go lower to $ 21.00 or $ 19.00

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The U.S. Comex gold futures surged 1.72 percent on Wednesday but retreated 0.35 percent on Thursday to $1,468.60. Gold weakened further by about 0.60 percent during Friday Asian morning. From the recent trough, the gold futures have rebounded 11 percent, but were down 12.4 percent year-to-date. The S&P 500 index and the Euro Stoxx 50 index inched up 0.04 percent and 0.15 percent in the past two days. The Dollar Index surged 1.10 percent on Thursday as the Euro/Dollar fell 0.84 percent while the Dollar/Yen declined 1.60 percent to breach 100 the first time in four years.

Jobless Claims, Inflation and Yen

Recent economic data from the U.S. have dampened the rebound in gold prices. The U.S. reported that jobless claims fell 4,000 to 323,000 in the week ending 4 May, with the average claims over the past month back to the pre-recession level in 2007. The U.S. consumer sentiment is at a five-year high while payrolls improved again in April. The Chicago Fed however wanted to see a monthly job growth of at least 200,000 continuously for six months before calling a sustainable labour market recovery. The April Chinese inflation climbed to 2.4 percent due to rising food prices. Inflation is expected to increase further as the government plans to relax the constraints on utilities and resources. Many economists do not see further monetary stimulus from China given the country wants to restrain credit growth and improve the quality of economic growth. As the BOJ is purchasing more bonds to reach its two percent inflation target and the dollar continues to strengthen, the Dollar/Yen crossed the important level of 100 on Thursday, representing the 50 percent retracement between the 2011 high of 75.35 and the 2007 trough of 124.14. The Yen is expected to weaken further.

The First Gold ETP Rise in Five Weeks

During the week ending 9 May, the gold-backed ETP holdings rebounded 0.1 percent to 2,241.708 metric tons, the first rise since the beginning of April. In India, gold imports will likely top 100 tonnes in May after rising the same amount in April. The weaker gold prices, the concern that the central bank may restrict banks’ gold imports as well as the festival of Akshaya Tritiya next week all help to boost the gold demand.
The Bank of America tallied that the global central banks have cut rates 511 times since June 2007, and still have an easing bias as recovery is weak and inflation is low. Low real rates should help to support gold prices while inflation will tick up at some point given all the liquidity.

Data to Watch Next Week

The market will focus on Ben Bernanke’s speech this Friday. Next week, we will watch China’s April industrial production data and the U.S. April retail sales on 13 May, the EU-17’s preliminary Q1 GDP on 14 May, the U.S. April industrial production and Japan’s preliminary Q1 GDP on 15 May as well as the ECB President’s speech on 16 May.


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Resistance:	102.15	102.35	102.67	102.91
Support:	101.70-75	101.50	101.36	101.15

BIAS: While 102.15 (max 102.35) caps we should see a pullback to the 100.65-91 area



MAIN ANALYSIS: We saw a direct move higher without any significant correction and this is approaching the 102.15 target. Allow for 102.35. However, from here we should now see a modestly deep correction. First support should be around the 101.36-50 area. There should be some sort of correction from here but given the earlier (linked) correction I feel this may well be fairly swift and reach down to the 100.65-91 area. If this is quick then we'll likely remain in a 100.65-102.15(-35) range for a couple of days. Otherwise, a slower, more ponderous pullback should develop to the same area.

COUNTER ANALYSIS: Only a direct break above 102.35 would see 102.67 at least. Above there note the 102.91 and 103.31 projections.
For more information regarding the support & resistance and medium term outlook please see the attached PDF file.
Good trading
Ian Copsey



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Bullion Round Up

The biggest headline last week apart from a planned strike by Israel on Syria was the stronger US dollar index that sent Japanese Yen breaking free of the 100.00 mark. Shinzo Abe cabinet ministers can be proud of what they have done in terms of massive monetary easing to boost the Nikkie and bring life to the Japanese economy. The fight of deflation is underway in Japan and they did send a rather strong message to the outside world. South Korea government have injected $ 15.3 bln to stimulate economic growth, weakening Korean Won so that domestic goods can be more competitive (think LG, Samsung and Hyundai). We have mentioned in our previous commentary that central banks are all working to ease the global economic constraints with whatever tools they have. Central bank intervention is crucial as the “currency wars” intensified. Money printing in droves has the short term effect and it is benefiting stock markets for now. Some called asset bubble in the real estate industry as well as so much money are chasing after yields. However, many have asked what the consequences are when the liquidity juice ran dry and the bubble pops?

Living under the “New Normal” economy, kicking the cans a little further down (we have kicked many times already) is the way to go for now. We will worry that later in the future is an understatement at the rate that central bankers are easing their way out. The 2008 financial crisis was 5 years ago but the pain is ever lasting with no end in sight. It seems like we are merely moving along, bleeding but patching up with some bandage every time a crisis knocks on the door. We saw how ECB Mr Draghi bulked under pressure to cut interest rate in the Eurozone. He aired his “Djisselboom” view that the ECB could even consider a negative interest rate just to send a strong message that banks must lend and help stimulate the economic growth. After this comment, several ECB policymakers played down the prospect of the negative interest rate.

However, Super Mario has once again create the perception that the ECB might do just that – living up to his previous comment “whatever it takes” and “to take further action”.
There is no denying that with global easing comes global growth, albeit only in selective industry. Stock market in general continue to benefit from the money printing programme, companies will hire and produce more. All the reforms and economic policies are slowly trickling down through the economic system but most central banks think that it is too slow and fresh money created continue to start dormant. Banks are reluctant to lend and even if they do, higher interest rate and current economic sentiment raised more concern of toxic debt. The general public are poor and wages continue to stay low. Even when companies are busy hiring (at minimum wage or depressed salary) and produce more goods, there are lack of demand. It is hardly surprising then to see an increase in anti austerity sentiment among Euro members – France, Italy and Portugal who were eventually given more breathing room in their austerity campaign.

Gold Technical

Gold took a dive after unconfirmed report that Wall Street Journal cum Fed writer – Jon Hilsenrath was releasing an article on the Federal Reserve exit strategy from the current stimulus programme. The initial rumour was enough to send the US dollar index stronger after hitting a low at 81.81 and rebounded to as high as 83.43. Most commodities index fell with Oil taking a huge beating with other PGMs soared on the back of supply disruption. Gold tried to stand its ground above the $ 1460 area but slowly bulked under the selling pressure as market participants feared the Chairman Bernanke will confirm the rumour during last Friday speech.
Given that “Global Easing” is a blessing for many central banks, gold look poised to benefit in the long run.

The current inflation rate remains muted but one cannot deny the eventualities when excessive money printing will start to erode the value of money. The stock market will continue with its rally but this rally may face more headwinds the higher it goes. Gold could soon be an alternative investment again in the very near future even without any economic crisis. That amount of “Hot Money” could once again reinvigorate the slumping ETFs market.

Resistance: $ 1475, $1488, $ 1496, $ 1525 Support: $ 1425, $ 1404, $ 1325.

Bearish – target $ 1400

Bullish – target $ 1600

Silver Technical

Technically, silver continue to consolidate in the descending triangle formation. A break below $ 23.15 will set off another round of selling spree that could take it back to revisit previous low at $ 22.00. In the short term, a break above $ 24.20 will be favourable for the bull as silver will trade outside of this formation and possibly test higher prices at either $ 25.03 (50% retracement) or $ 25.75 (61.8% retracement). The rebound rally lost its steam and silver has not really performed as well as gold. The white metal continue to consolidate but the longer it take to do so, the more vulnerable it will be for short sellers to add pressure. Technically, the daily chart shows a Bollinger band that is coming closer to a breakout. At the moment, the risk for further correction remains high.

Resistance: $ 24.82, $ 24.91, $ 25.59 Support: $ 23.19, $ 22.88, $ 19.00.

Bearish – break below $ 23.15 could see a retest of $ 22.00

Bearish – a retest of $ 22 is possible and could go lower to $ 21.00 or $ 19.00

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The pair is trading along an sideways trading pattern.
An downtrend will start as soon, as the pair drops below support level 1418, which will be followed by moving down to support level 1347.An uptrend will start as soon, as the pair rises above resistance level 1451, which will be followed by moving up to resistance level 1470 and then 1500.
Supports: 1418, 1405, 1347
Resistances: 1442, 1451, 1470, 1500





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