Gold, Silver, TRY All Starting The Week In Decline

Last week the expected FOMC meeting took place and Gold and Silver prices went down to 2.5 year lows. The FOMC suggested that if economic conditions continue to improve, the Fed will start narrowing its stimulus program later this year and this might be the signal for to possibly continue into the middle of next year but Bernanke stressed many times that ‘policy is not pre-determined’.

For now, the Fed will continue to buy $85 billion in US Treasurys and mortgage-backed bonds each month. Bernanke also said: “We’re only slowing the speed. Raising short-term interest rates is far in the future. There’s no change in policy. It’s a simple clarification”.

However, the market took his meaning differently than it was meant. Though for the past few years the commodity markets have been supported by the devaluation of the US dollar, now the Fed appears ready to end this practice. On the other hand, some reports show that Indian gold imports will decline by 30% due to recent Indian government taxation measures, for the purpose of reducing the country’s trade imbalance.

For the coming week, the market seems to be focusing on interpretations of how/when the US Central Bank will look to narrow its stimulus plan, paying special attention to the regional Fed spokesmen scheduled to speak during thecoming week.

In conclusion, I’d like to suggest CME evaluate raising gold margins as prices drop.

Gold
On a Monthly basis, it’s not only hard to think the decline is over as long as it’s below the 1385 level but also breaking 1,300 might have a big impact. Be careful with the June 2010 low of 1,196.50. On a Weekly basis it should not be surprising when Gold declines to 1,230. Resistance is at 1,375 and it shall start the first business day of the week with decline.







Silver
On a Monthly basis, it’s hard to think the decline is over as long as it’s below 20.20. Be wary of the 16.50 level. On a weekly basis, it should not be surprising when Silver goes down to the 19.00 psychological level. Resistance is at 21.70. Silver will start the first business day of the week with a decline.




USD/TRY
On a Monthly basis, it's no surprise that the Turkish lira is almost at the 1.9500 level, making new and historic highs. On a weekly basis it wouldn’t be easy and quick to break 1.9700 resistance on its way to the 2.0000 psychological at which it would reach a new and historic high. Support is at 1.9100, and it will start the first business day of the week in decline.





Disclaimer: This article is not an investment recommendation. Any analysis presented in this article is not meant to be relied upon for solely investment decisions. Please consult a qualified investment advisor. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author's best judgment as of the date of publication, and are subject to change without notice.