Saturday, June 02, 2012

Gold Rose More Than USD60 on 1 June 2012

Dear fellow traders,

Gold has been hovering below the 150 Days Moving Average (DMA) since the beginning of March 2012, a stark difference with the bullish movement that Gold enjoyed back in 2009 to 2011, when Gold even hit USD1900 an ounce in Sep 2011.

But surprisingly (or it has been waiting for this moment), Gold price shot up more than USD60 on 1 June 2012 to end at USD1621.80 an ounce.

This could be largely due to the dismal May US jobs report, where U.S. Economy created only 69,000 jobs in May 2012, the fewest in a year; and the unemployment rate ticked up to 8.2%. There are also other factors involved - Europe's spiraling debt crisis where Spain's bank crisis deepened and confidence waiver with the spike in Italian benchmark bond yields.

The Dow Jones Industrial Average had its worst hit this year on Friday, 1 June 2012, shredding 274.88 points (2.2%) to 12,118.57 points. The DOW has officially dropped below the institutions observed 200 Days Moving Average with this move.

Yours Truly,

Tony Chai