We are passing historictime as both major economies of US and EU (as united) is in gloomy situationand possibly solution is far reach and can dampen global growth.
As economic power is transforming and ongoing questionis arising with changing situation about USD as reserve currency, whichargument is hot now a days and individually 2nd largest economyChina openly wished for Yuan to become a reserve currency (although they mayknow its not very easy to replace or a time taking process ). Nigerian central Bank governor told yesterdayto Invest 5% To 10% of their reserves In Yuan(effect of china’s long time effort on African countries).
In recent time we ‘ve seencentral banks coming openly to protect own currency which dampening safe heavenimage of some particular currencies like USD and CHF. As an example SNB intervention yesterday madeit weaker for more than 700 pips against USD, possibly it was a historic movefor USDCHF.
GOLD: aforesaidreasons are insisting investors and hedgers including central banks to accumulategold as an alternative. So mid to long term gold will remain difficultly positive, currency war,regrouping of world political powers after fall of Soviet union, rising ofChina, cornered USA, indicating ancient reserve currency to glitter.
Correction is a part of themarket movement and healthy correction always is an opportunity and as price isin record high area and volatility is very high in all sectors so better tostay cautious.
Globex SPOT GOLD made a outsideday and engulfment yesterday, which indicate more lower prices ahead and onegood sup is $1812-24 and major support $1794/98.
SILVER: volatility increased today, like gold, silver also inuptrend. sup here is $40.50 and one major trend sup $40, below can attractdownward pressure while mcx dec silver major trend sup 62600 and any convincingbreak below can pull prices down towards 61k and 59800.
DJIA: weak econ situation and lack of confidence ofany recovery, fear of 2nd dip of recession supposed to take itlower. Looks became negative, forming secondary bullish channel which normallytends to break down. Nearby resistance 11650, 11800 and sup 10800 and 10600,convincing break below 10600 to move towards 10k and for a longer periodpossible target 8800.
NB:today US beige book, on tomorrow Obama speechregarding plan for creating jobs, ECB and UK interest rate decision, ECBTrichet’s speech, Fed Bernanke’s speech can attract more volatility in allsector at the same time direction. Mostly market is waiting for FOMC on 20thand 21st Sept.
