Gold broke the support, testing a lower level in short-term

Although no serious incidentshappened last week, a lot of messages and data had impacts on different financial markets and investment tools. For example,the EU countries didn't have uniform views toward Greek debt crisis and the situation changed from time to time. The globe worried that the outbreak of“debt bomb” from Greece and Spainwillgreatly affect the whole European economies and the euro system. When there is a similar situation in the past that the market information is not clear, capitals wereusually flew into the gold market. However, considering the market capital flows and the price of goldlast week, inflow of capitalwas not obvious in the gold market.
The United States has disclosed the selling of some strategic oil reserves last week. The oil price firstly fell to below 90 USD/barrel after receiving this news, but during the sales period, since market were quite interested in the oil, its price rose to 95 per barrel.

Gold slightly rebounded from last Monday to Thursday. The opening price on Monday was just 1,500 USD, followed by a gradual rebound when being affected by the weakening dollar and the increase of the oil price. Last Tuesday and Wednesday's high levels were 1,406.20, and 1,513 respectively. The all-week high was 1,413.90on Thursday. It fellon Fridayfrom the opening high 1,501.80 plunging to the lowest ofthe day at 1,478, and finally closed at 1,487.20.

The price trend of silver and gold were similar last week. It rebounded at the beginning of the week and then plunged on Friday, from highest daily price 34.80 USD to the lowest 33.50. The decline of silver is more significant. It is probably because buying orders of real silver stopped, especially when China, a country with high demand of gold and silver, has repeatedly implemented the recent tightening financial measures. The domestic hot money relatively decreased. It therefore affectedthe demand for gold and silver.

From the charts, gold and silver prices formed a downward trend in short-term. The price of gold and silver falling below1,500 USD and 35 respectively showed a bearish signal. It is believed that gold and silver will further down test the support in short-term. Gold's big technical support is at1,430 and then 1,420,followed bythe stronger support 1,400. It is predicted that spot goldthis week will be in bearish trend and looking for supports. The price volatility is estimated between 1,460 and 1,510; silver’s price volatility will be between32.50 and 34.50. Its support in short-term will be located at 30 and 28.