A Week To Watch Gold

This week is studded with a number of briefings, meetings & reports effecting Gold. Tomorrow Bernanke will go before Congress to testify on the economic outlook to the Joint Economic Committee. The ECB holds a regular meeting this week which it is expected to leave Euro Zone rates on hold at 1.5 %.   The week will end with the Jobs report for Sept. that will either be a cause for celebration or concern.

Given the nature of this week Gold has the potential to make back some of the losses of the last 2 weeks.  After the recent washout, gold positioning is far from extended and this is quite a bullish signal for price strength ahead. The ‘clean’ nature of current spec positions, along with physical and long-term demand, is creating a very healthy foundation for gold to climb from, UBS analyst Edel Tully was quoted on CNBC.

This week should put Gold & Silver back on track as a safe-haven in vestment. This recent price drop follows the same pattern we saw during the 2008-09 collapse, where Gold was sold to cover losses.  The only real resistance to Gold could be its own success.  So it’s a data-packed week; you’d think the balance of the news would be gold-friendly, or at least what we used to describe as gold-friendly before it fell so sharply, which was bad economic data and bad economies and loose monetary policy. The problem for gold could be if any serious rallies will see selling into them if some people think it’s a good chance to get out, Mitsubishi analyst Matthew Turner pointed out on CNBC.

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