Market Commentary

Ø Rallying equity markets overnight saw gold open higher at 1566/1567. The metal reached an intraday high of 1577.50/1578.50 after neutral jobs data. Profit taking took gold lower throughout the day with the metal closing the session on its intraday low of 1557.50/1558.50.

Ø Stronger base metals and crude overnight saw silver open strong at 28.14/28.19 but slipping to its intraday low of 28.00/28.05 quickly after. Silver pared its early morning loss and eventually reached an intraday high of 28.53/28.58 early morning. As with gold, profit taking, as equities began to decline, took the metal to its close at 28.17/28.22.

Technical Commentary

Ø Gold closed lower at 1557 today, unable to hold onto its highs from yesterday or today. Gold remains under the bear channel and thus the bias is for further downside; however, the trading action for the past 9 sessions has essentially been sideways. Support is at the previous low of 1522, and resistance is at the last correction high of 1599.

Ø Silver closed higher today at 28.22, in the middle of the bear channel. Resistance is at the top of the channel, currently at 29.54 and support is at the bottom of the channel at 26.47. While we may see a small correction higher in the near term, the trend remains bearish. The Gold-Silver ratio formed a bearish engulfing pattern in the candlestick charts. While this may be the setup for a short-term correction downward, the uptrend remains intact. Support from the uptrend is at 54.18 and resistance is at the recent high of 57.11. It is currently trading lower at 55.24.

Technical levels for 25^th May, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1 ,544.34	1 ,571.26
Silver	27.694	28.582

Economic Calendar:

Date			Economic Indicator	Country	Actual	Forecast	Previous		Effect & Remarks
	25th May	Revised UoM Consumer Sentiment		US	Pending at 6:00pm	77.7		77.8	If Actual > Forecast = Good for currency. Level of a composite index based on surveyed consumers.
	24th May	Unemployment Claims		US	370K	372K		370K	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.
	24th May	FOMC Member Dudley Speaks		US	NA	NA		NA	Monetary policy in today’s challenging economic environment. As part of this, he will discuss how simple policy rules might appropriately be used as a guide to decision making. Fed’s Dudley Says Labor Market Slowdown Would Tilt To Easing.

Disclaimer: -

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