Friday, July 16, 2010

"Gold priced in euros may have topped " (GLD)

Comex gold closed down $15.40 at $1192.90.
From FuturesMag:
Livin’ in the USA cost less for a third consecutive month according to estimates offered by most economists surveyed by Bloomberg News. The drop in inflation underscores the reluctance of consumers to do what they do best as still-weak employment conditions continue to undermine their collective sentiment. Today’s CPI report is expected to indicate a gain of only 1.2% for the year ending in June. 
That’s a figure that represents nearly half of the inflation level recorded in the May-to-May period. Thus we find a Fed that talks about something that was only last heard in Japan in recent history: “desirable levels of inflation.” The Fed ‘desires’ to keep long-term inflation trends between 1.7 and 2 percent. Livin’ in the USA therefore –for the time being-implies livin’ in the land of bargains, despite the slightly more elevated that expected core CPI data.

Meanwhile, livin’ in the Old World became a tad more reassuring over the past month as the credit storm appears to have run out of the scary lightning and thunder found in news headlines. The head of the IMF this morning opined that the European bank stress tests will reveal that most of the 91 institutions to be hooked up to the testing apparatus will show a healthy enough state of fitness to be declared ‘sound.’ 

While some smaller banks may have to embark on an exercise program involving the shoveling of additional capital onto their balance sheets, the consensus is that the tests will show that fear was the only thing to be afraid of when diagnoses of imminent flatlining were being doled out by the day during the last quarter.
Also during the last quarter, gold –in terms of euros per ounce-may have just put in a top. This, according to Commerzbank metals analysts who live and breathe gold charts. Technical analyst Karen Jones opines that-given the yellow metal’s breach of the 55-day moving average for the first time in one year- gold may have seen its high at the 1050 euro/ounce level on June 8. 

Having broken under the 975 euro/ounce level, the metal is poised to spend many a fortnight under the round 1000 euro figure. However, so long as it remains above 935 euros/ounce, bullion is seen as remaining in a bullish posture, according to Commerzbank’s analyst....MORE