Gold Poised to Revisit Upper End of Range?

Last week came to an end with gold and silver holding the lower end of their recent trading ranges and showing signs that we were poised to revisit the upper end of the same range. The two key supportive events last week were a downward revision in U.S. Q1 GDP which now shows the economy shrank by 0.7 percent as the strong USD weighed heavily on exports. While this is “yesterday’s” news it allowed bond yields to fall and the USD rally took a break which helped stabilize gold and company.

<p>The second event took place in the GLD ETF market where a very large purchase report to be 100,000 contracts (1 million ounces) of a bullish options strategy was reported to have been placed by one trader.  Following these events there has been much chatter over the weekend which surrounding the possible Greek exit from the Eurozone and the possibility of a spike in oil prices as tensions continue to grow in the Middle-East as fighting in Iraq intensifies. Both of these headlines are likely to cause many of the recent “shorts” to cover.    In early U.S. trading gold and silver have rallied above $1,200.00 and $17.00 but the in order for the momentum to continue gold needs to break through resistance from $1,210.00 through $1,215.00.