Gold May Test $1733-1735

The Geek government and parliament have finally approved the new austerity plan needed to get another loan for the IMF/EU/ECB. In the meantime, the streets of Athens are crowded with people protesting against the spending cuts.  

In the meantime, the ECB is about to hold another auction of easy loans for European banks  - 680B euro for 3 years at 1% per annum. France, Spain and Italy are planning to hold bond auctions this week. Investors will be monitoring the yield.

Japan’s GDP shrunk by 0.6% in Q4 2011, twice as low as expected. Today and tomorrow the Bank of Japan is holding an emergency meeting to discuss the ways and means of stimulating the country’s economy. Nevertheless, some experts point out an increase in capital investment and consumer spending for the first time in 5 quarters.

In the meantime, the situation in the Strait of Hormuz keeps escalating. The US Naval Forces Central Command is sure that the US Navy will be able to prevent the blockade of the strait.  In its turn, Iran promises to reveal its nuclear achievements in the near future.

Last week the markets of precious metals received $495M of new investments.

According to the Department of Commodity Trading of , today gold may test 1733-1735, with a rebound down to 1724-1725 and may be 1720. If an H1 bar closes below 1720, gold may depreciate further down to 1700. Once the price consolidates above 1725, it may reach 1750.

As for silver, in order to resume its rally it will have to consolidate 33.92. In this case it may reach 34 and even 34, 50. Otherwise, the downswing may continue. The targets are 33.6, 33.2, 33,0.