Market Commentary

Ø Dollar gains overnight saw gold open lower at 1715/1716. Extending its slide to an intraday low of 1704.75/1705.75, the metal then reversed its losses on good economic data. Gaining throughout the day alongside equities, gold eventually closed the session on its intraday high of 1726.50/1727.50.

Ø Depressed base metals and crude prices overnight saw silver open lower at 33.07/33.12. A quick sell off just after the open took silver to its intraday low of 32.62/32.67. Good jobs and manufacturing data stifled silver’s losses, turning the metal around to reach an intraday high of 33.42/33.47 mid day. Silver ended the session at 33.35/33.40.

Technical Commentary:

Ø Gold closed essentially unchanged at 1726/27, forming a doji on the candlestick charts, and breaching another uptrend. We have redrawn the uptrend, with support now at 1709, classic technical theory suggests that the breach of the 3rd trendline will result in a steeper sell-off. Thepattern in gold resembles a rounding top, with support in the 1702 to would be bearish gold should we breach these support levels. 1710 levels, where we have made several lows since late January. We Resistance is at last week’s high around 1752.

Ø Silver breached key support on an intraday basis, but managed to hold it on a closing basis at 33.35/40. Key support remains at 33.00. Resistance is at 34.53, last week’s high. Key resistance sits at 35.16, the 50% Fibonacci retracement of the drop in silver from August 2011 highs. The Gold-Silver ratio closed lower at 51.59.

Technical levels for 17^th Feb, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1,710.80	1,743. 69
Silver	32.797	34.094

Economic Calendar:

Date	Economic Indicator	Country	Actual	Forecast	Previous	Effect & Remarks
17th Feb	Core CPI m/m	USD	Pending at 7:00pm	0.3%	0.1%	If Actual > Forecast = Good for currency. Change in the price of goods and services purchased by consumers, excluding food and energy.
16th Feb	PPI m/m	USD	0.1%	0.3%	-0.1%	As Actual < Forecast =Not Good for currency. Change in the price of finished goods and services sold by producers have Decreased.
16th Feb	Unemployment Claims	USD	348	364	358	As Actual < Forecast = Good for currency. The number of individuals who filed for unemployment insurance for the first time during the past week has Decreased.

Disclaimer:

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