Market Commentary

Ø Overnight investor confidence rose dramatically after European leaders came to an agreement. With all assets gaining strongly, gold opened higher at 1585/1586. After a small dip quickly after to an intraday low of 1583.25/1584.25, the metal continued its rise alongside strong gains in equities, eventually reaching an intraday high of 1606.75/1607.75 late in the session. Gold closed the week shortly after at 1602.50/1603.50.

Ø Silver opened strong at 27.40/27.45. The metal reached an early session high of 27.92/27.97 before light profit taking took silver to an intraday low of 27.21/27.26. Strong gains in base metals however, coupled with a meteoric rise in crude, brought the buyers back, resulting in the metal recovering to close the week at 27.66/27.71.

Technical Commentary

Ø Gold closed hugely higher today at 1602. Despite the bullish move, gold still remains in the same range since early May, and would have to move above trendline resistance to reverse the bearish posture. Resistance comes in at 1624 today. On the weekly chart, gold closed higher but is still within a well entrenched bear trend with resistance at 1702. Support is at the 1522 low from December 2011.

Ø Silver closed hugely higher on the day at 27.66, forming a bullish engulfing pattern in the daily chart, but closed only slightly higher on the week. Still, the weekly close managed to hold above the long term uptrend off the 2008 low, with current support at 26.35. Resistance is at 29.12, the 50% retracement of the 2008 to 2011 uptrend. The Gold-Silver ratio is trading slightly lower at 58.19. Nevertheless, the uptrend continues to be strong with Directional Movement Index (DMI) at 34.95 and RSI approaching but not at oversold territory at 68. The next target is 63.9, the 61.8% retracement of the collapse in the ratio from 2008 to 2011.

Technical levels for 2^nd July, 2012:

Metal	Support ($/oz)	Resistance ($/oz)
Gold	1,566.24	1,618.55
Silver	26.601	28.001

Economic Calendar:

Date		Economic Indicator	Country	Actual	Forecast	Previous		Effect & Remarks
2nd July	ISM Manufacturing PMI		US	Pending at 7:30pm	52.1		53.5	If Actual > Forecast = Good for currency. Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.
2nd July	FOMC Member Williams Speaks		US	Pending at 10:45pm	NA		NA	Federal Reserve FOMC members vote on where to set the nation's key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy
29th Jun	Core PCE Price Index m/m		US	0.1%	0.2%		0.1%	As Actual < Forecast =Not Good for currency. Change in the price of goods and services purchased by consumers, excluding food and energy has Decreased.

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