The Metals Report: March 1, 2012

Today’s April Gold Futures contract traded an amazing $83.90 range.
Today’s session started off innocently enough as it turned out to be the quiet before the storm.

The April Gold market had lost rally momentum early as traders were side-lined awaiting FOMC Chairman Ben Bernanke’s Humphrey / Hawkins testimony. Prior to the Chairman’s speech the Gold market began to sell-off when the State Department announced that North Korea agreed to suspend nuclear weapons tests and uranium enrichment and  allow international inspectors to verify and monitor activities at the main reactor site. This is considered an easing of geo-political tensions for that region. However, the tension in the Iranian region is still very high.

The avalanche began as Bernanke hinted that there was not a present need for more easing at this point. This sent the Gold bugs into a selling frenzy as most traders and investors were all but certain that Quantitative Easing 3 was a foregone conclusion. The earlier FOMC meetings this year gave a strong indication that the voting Board Members were in favor of additional easing. Many traders and investors alike based there precious metals positions of their earlier statements and was the fuel that helped propel this years gold and silver rallies. There is little question that the Gold was a bit overbought and top heavy however, with all that has been going on in the world it appeared to be warranted. Today saw the biggest sell-off /correction / profit take of the year. Markets need to refresh in order to keep them healthy and two sided.
This huge price dip may be seen as a “bargain buying” opportunity in the Asian sector tonight.

APRIL GOLD
RESISTANCE # 2………………...$1821.00
RESISTANCE # 1………………...$1766.00
PIVOT……………………………...$1737.00
SUPPORT # 1……………………. $1683.00
SUPPORT # 2……………………..$1653.00
VOLUME……………………………268,000

MAY SILVER
RESISTANCE # 2…………………. $39.10
RESISTANCE # 1…………………. $36.88
PIVOT………………………………. $35.35
SUPPORT # 1………………………$33.12
SUPPORT # 2………………………$31.60