Edward Culchenko
President Obama has officially addressed the US Congress and asked the legislators to increase the US debt ceiling by $1.2 trillion, thus allowing it to grow up to $16.3 trillion. The Congress has 15 days to consider this request. During the first 11 days of 2012 the US Mint sold 82.5K ounces of gold coins, the biggest amount since 1999. The sales of silver coins were equal to 4.257K ounces.
In the meantime, the US authorities keep intensifying their efforts to impose embargo on the import of crude oil from Iran. Iran’s national currency keeps depreciating while the country’s national bank has increased the interest rates in effort to curb the depreciation and to stabilize the internal gold prices.
The ECB and the BoE have left the interest rates unchanged. China’s currency reserves have declined for the first time in 10 years as the result of the investment outflow and a decline in China’s balance of trade surplus. Indian investors have switched from gold to T-bonds.
Forecast: According to the Department of Commodity Trading of , today gold traders and investors will probably be reducing exposure after the recent rally. A rally to 1648 and 1656 is probable. However, the price is more likely to retrace or move in the 1656-1636 range. A break and consolidation above 1657 will increase the probability of a further rally. A break and consolidation below 1636 will suggest a deeper retracement movement down to 1622, 1617.
As for silver, it will probably be consolidating as investors will be reducing exposure. However, a movement to 30.12, 30.20 and 30.40 with going back to 30-29.50 is still probable. A beak and consolidation below 29.50 will increase the probability of going down to 29.30. Once the price consolidates above 30.40, it will get a chance to continue the rally.
Edward Culchenko
