Gold Returns to Congestion Awaiting Stimulus Decisions from Fed, ECB, BoE :- Though gold may have lost momentum from its rebound from a 23 percent, second quarter plunge; stability may be better serve the ravaged commodity. Volatility begets volatility. Looking at the CBOE’s volatility index for the precious metal, the 27 percent reading from this past session is still nearly double the ‘fear’ gauge’s levels preceding April’s epic plunge below $1,500; but it is also 6 vols (20 percent) lower than last week’s spike. Traders don’t have the luxury of breathing easy just yet though. On the contrary, we have important event risk over the coming 48 hours that speaks to gold’s fundamental value. The ECB and BoE rate decisions will decide monetary policy efforts behind two of the world’s premier reserve currencies. Stimulus diminishes a currency and bolsters gold’s alternate appeal. Friday’s NFPs will stir Fed Taper talk. Key support levels : $1,230 / $1,200 / $1,180 Key resistance levels : $1,250 / $1,285 / $1,300 Rgds, -BSK-
Posted on: Thu, 04 Jul 2013 07:22:07 +0000
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