Weekly Gold Review (2011.05.23): http://www.hx9999.com/
Gold and silver should have digested the the correction pressure for 2 weeks and returned to fundamental trends. The former tested the lower level in early last week, rebounded upon the level 1,500 USD. The commodity continued to decline to the day low of 1,488 USD on Monday and further to 1,471.80 USD on Tuesday. Price stabled since the level of 1,470 USD remained, reversing to 1,500 from 1,484 USD on Wednesday. On Thursday range narrowed and the 1,490 USD level remained. Gold obviously strengthened on Friday that the day high reached 1,516 USD and ended at 1,512 USD.
Silver had experienced a more apparent reversal. After reaching the weekly low of 33 USD on Tuesday price repeatly tested the 35 USD key level. At the level no substaintial support nor resistance was seen. The weekly high and closing were 35.80 and 35 USD respectively.
Other than reduction in selling pressure, performance of dollar and oil also affected the trend of the metal. Oil and gold were similar in tracks, heading downward in the early 2 days and then rebounded. The U.S. oil futures fell to the lowest of 95 USD on Tuesday and stayed above 101 USD in the next two sessions. The weekly high of 101.40 USD was seen.
Rumors of European debt crisis and Local economic data mixed to influence the dollar index. Overall the greenback headed upward and then retreated, matching with the performance of gold. Since the dollar index declined from 76 the commodity had been strengthened. Gold price extended gains when the dollar index breached the 75 level on Friday.
Technically, the lower levels in late Jan, mid Mar and early May formed a essential supporting line. The level was once breached on Tuesday but resumed very soon so that a bearish trend was not formed. Gold was predicted to trade around 1,500 USD in the coming week. the first resistance should be 1,520 USD and the next one should be 1,550 USD. Although trend seemed to recover but the the effect of the key support of 1,480 USD should be noticed.
Since sharply declined from the peak, technically silver remained lack of direction. In view of scale of correction, price had fallen from the highest of 50 to the lowest of 32 USD, or 36%, the current reversal could be expected. Yet the higher structural risks of silver had led to certain withdrawals of investors and movement tended to be more unpredictable. Range might be widened but actual trading price might stayed within 35-36 USD.
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