Market Commentary

Ø Overnight optimism of Europe’s crisis improving saw the dollar softer and gold higher, opening at 1741.25/1742.25. Gold reached an intraday high of 1747.50/1748.50 early morning before disappointing economic data reversed gold’s gains, sending the metal to its intraday low of 1725/1726 mid day on profit taking. Gold made a quick recovery and promptly settled into range bound trading for the remainder of the day. The metal ended the session at 1737/1738

Ø Silver opened a little higher at 33.67/33.72. The metal reached an early morning intraday high of 34.11/34.16 alongside strong rallies in crude and base metals. Mid morning profit taking in commodities took silver to its intraday low of 32.93/32.98 mid day. Recovering small throughout the afternoon, silver eventually ended the day at 33.26/33.31.

Technical Commentary:

Ø Spot gold closed higher today at 1737/38. RSI has turned back upwards and remains close to overbought levels at 69.70; however the uptrend is intact and there is no divergence. Resistance is at 1756, the December 8th high, followed by 1800. Key support sits at 1696, the 61.8% retracement of the November-December downtrend.

Ø Silver closed down slightly at 33.26/31, its second consecutive down day. Support at 33.00 was breached on an intraday basis, but held on a closing basis, and should continue to provide some support. Resistance is at 34.63, the November 16th high. The Gold-Silver ratio traded higher at 52.4.

Technical levels for 1^st Feb, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1,725.49	1,749.11
Silver	32.718	33.980

Economic Calendar:

Date	Economic Indicator	Country	Actual	Forecast	Previous	Effect & Remarks
1st Feb	ADP Non-Farm Employment Change	USD	Pending at 6:45pm	189	325	If Actual > Forecast = Good for currency. Estimated change in the number of employed people during the previous month, excluding the farming industry and government.
1st Feb	ISM Manufacturing PMI	USD	Pending at 8:30pm	54.6	53.9	If Actual > Forecast = Good for currency. Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.
31st Jan	CB Consumer Confidence	USD	61.1	68.2	64.5	As Actual < Forecast =Not Good for US Currency. Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity has Decreased.

Disclaimer:

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