Gold Holds at 596

Spot gold holds at $596.90/oz, at the day's low and down from an earlier high at $603.50.
The precious metal has been weighed by three factors over the past 24 hours.
First, gold failed to push over recent the Sept 11 high at $610.40.
Then o/n the Swedish central bank announced plans to sell gold over the next year. While it is not a large amount (10 tonnes), it has raised concerns that other CBs might also begin to sell. Finally, dollar strength on the day has been a factor.
A close back under the 200 day moving average at $599 would suggest scope for further declines back to the $570/$575 support seen earlier in Sept

EUR/USD Back to 1.27 levels

EUR/USD Back to 1.27 Levels
Gold pushing lower to 590 levels, where we mentioned risks for it to move lower after crossing 200 MA - 598.
However, Another reason for drop is due to Crude Oil Down Fall as well.
Crude Oil is Down $1.12 on word that there will be no OPEC press conf. and, apparently, no significant production cuts by that body.

Fresh Geo-Political Tensions to worry about : Russia-Georgia

There could be a fresh geopolitical tension for the markets to worry about. There's talk of Russian troop redeployment near the Georgian border, with a Georgian minister calling the maneuvers "saber-rattling." An already tense relationship between the two has deteriorated in recent days after Georgia arrested several Russian troops and charged them with spying. Russia also accusing Nato of illegally sending arms to Georgia

GOLD FUTURES

Gold Futures Trading Below $603/605 resistance.
Target should be around $597
Stop Above $606

Gold trading in OverSold Territory

Gold Trades in OverSold Territory Right now
Finding new buyers, to push Higher crossing the resistance 607 - which it tried crossing yesterday.
Todays Drop is mostly considered due to Profit Taking and not much Downpush due to USD. Due to Month coming to end and end of a week, traders feel to take out the money, to trade with new fresh money Next week.
However, EUR/USD is pushing up higher now, trading at 1.2674 levels.
AS Sources comment, we Should Expect OPEC to release the Statement. Which In return could Push Crude Oil, mentioning they could Cut Supply, Pushing the price up, in return helping Precious Metals, there is a good co-relation between oil and gold for the moment.

OPEC will Issue a Statement by end of Europe trading today

OPEC will issue a statement by the end of trading in Europe today, as some of the sources mention. However, no further details on the statement.

FED: Poole Says there would be room for FED to ease

Poole, in prepared text, says there would be room for the Fed to ease aggressively if GDP is below forecast. Says would need to see a consistent picture of slower GDP and inflation before any easing could occur. Says "Policy is in a range that can be considered neutral."Says FOMC expects inflation "to recede only gradually." Fed has "deep commitment" to preserving price stability.

Gold Still at 200 MA Level

Gold is Still At 200 MA Level
Waiting for U. of Michigan Confidence and Chicago PMI to release.
Which shall give more signals.
We are still looking upward push.

Sweden Central bank Wants to reduce Gold Reserves

Swedish Central bank wants to reduce its Gold reserves by 10 tons, 200 Mln USD worth, Short term. They Will buy foreign bonds for the money. (Source: Dagens Industri, Sweden)

Gold trade now at 200 MA Level

Gold trades now at 200 MA Level.
Heavy Continous Push Downwards could face it go towards 590 Levels.
Market reaction on the Datas, which released 20 Minutes before.
Shall Expect such movements before 14:00 GMT Data, confirming more signs.

FX Movements

EUR/USD Falls below 1.2650
Next aim 1.2630/20 support

GBP/USD Hitting stops below 1.8650 Support, Aiming for 1.8600/15.

Dollar Higher - Traders Await PCE Core MoM

The dollar is higher against the euro and yen early Friday as traders await the release of a U.S. inflation report closely watched by the Federal Reserve, the price index for personal consumption expenditures for August

U.Of Michigan Consumer - ReScheduled

Starting from Today,
U.Of Michigan Consumer is now Re-Scheduled at 14:00 GMT instead of 13:45 GMT.
Todays U. Of Michigan Consumer shall also come at 14:00 GMT - Make note of it

US ECONOMIC DATA

12:30 GMT

Personal Spending - Expected - 0.2%
PCE Deflator YoY - Expected - 3.2%
PCE Core MoM - Expected - 0.2%

13:45 GMT

U. of Michigan Confidence - Expected - 85.0%

14:00 GMT

Fed Pool Speaks in Tennessee
Chicago PMI - Expected - 55.5%

EURO May get Help by Aggressive ECB

The European Central Bank may prove even more aggressive on interest rates than expected next Thursday, making it more likely that the euro will finally breach $1.30.

Expectations that the ECB will hike rates more than initially anticipated are growing, despite data later Friday that may show inflation in the euro zone is falling back under the ECB's own target of 2%.

Just because inflation is lower than the target does not imply that the ECB will stall

On the contrary, this could encourage the central bank to accelerate its rate hikes - raising them by 50 basis points rather than just 25 basis points at its policy meeting next Thursday.

We actually wonder whether the ECB might hike 50 basis points just to get through the rate hikes before inflation falls too far and the economy slips next year.

Axel Weber, the Bundesbank President, was similarly hawkish earlier in the week, arguing that the recent fall in oil prices isn't necessarily going to translate into a sustainable fall in inflation, given the risk of second-round effects from wage increases.

This very much suggests that the ECB is still on for a rate hike next week and that the market will continue to look for a follow up move in December
Rhetoric from Weber stressing the need for continued vigilance and playing down the impact of the recent oil (price) decline has reinforced the perception of further monetary tightening

Important Europe Zone Economic Datas Coming out today

9:00 GMT

Business Climate Indicator - Expected: 1.20

Industrial Confidence - Expected: 1

Consumer Confidence - Expected: -8

Economic Confidence - Expected: 106.3

Services Confidence - Expected: 19

EUROPEAN COUNTRIES ECONOMIC DATA

There is another busy calendar to end the week onFriday.

Core European data starts at 0600GMT with German retail sales data for August. FSO retail sales are forecast to rise 0.9% m/m, falling0.4% y/y.

French data includes consumer sentiment at 0640GMT and theJuly-August reading of PPI at 0650GMT. Rising employment and falling petrol prices are widely expected to help consumers out of the doldrums and consumer sentiment is forecast to edge up to a reading of -23, while the PPI is forecast to rise 0.4% m/m, 4.0% y/y in July and 0.1% m/m,3.6% y/y for August. Oil price fluctuations explain the expectedacceleration in producer prices in July and the abrupt slowdown inAugust. The persistently high annual rate reflects the accumulated boostfrom energy and more recently from semi-finished goods over the past year.

Further inflation data sees Italian PPI for August at 0800GMT.

There is a raft of UK data due at 0830GMT, including August mortgage approvals, secured lending, final M4 money supply and consumer credit data as well as Q2 balance of payments and the September GfK consumer confidence data.

Eurozone data also sees a string ofreleases at 0900GMT, including the September EMU economic sentimentindex, flash HICP and EMU business climate data, released at the sametime as Italian preliminary HICP/CPI for September. For the EMU data,the economic sentiment index is expected to edge down to 106.2 withconsumer confidence unchanged at -8 and industry confidence slightlylower at +1. Flash HICP is now expected to come in just below the 2%level, at 1.9% y/y.

At 1140GMT, ECB Executive Board member Juergen Starkcloses the National Bank of Poland conference with a talk on "Economic Education: An Important Factor in the Implementation of MonetaryPolicy," in Warsaw.
At 1330GMT, ECB Governing Council member Axel Webergives closing remarks at a conference, in Berlin, while the last of the week's scheduled European speakers is at 1440GMT, when ECB GoverningCouncil member Erkki Liikanen participates in a seminar at theUniversity of Tampere in Finland.

OPEC Export Cuts - Oil Trade higher

November NYMEX crude contract trading at $63.73, up $0.77 after the talk of OPEC export cuts, trading at session highs.

The Rally Helping the Precious Metals

Gold in meeting with 607 - 1st Resistance

Gold Is heading to its 1st Resistance level 607
Clearance of that we will meet 612

Gold having hard time to cross 604 levels

Gold is having hard time to cross 604 level.
Gold shouldnt pass 200 MA below - 597-598 levels, or it will create chances for it to slide back to 574 Heavy Support.
Gold is trying to find some more Buyers at the current levels.
However it appears as few traders are Booking profits, and few getting Long, due to we have a Quick Zig-Zag Pattern being formed, playing in the same tight range Above $600 - $604.

NYMEX Crude Oil Technical Levels

RES 4: $68.75/90 Daily high 8 Sept & 50.0% of $52.52 to $78.40
RES 3: $66.70 38.2% of $59.52 to $78.40
RES 2: $65.15/20 Daily high 19, 18 Sept & 21-day moving average
RES 1: $63.35 Bear-flag top from 22 Sept

LAST PRICE: $62.92

SUP 1: $61.80/90 5-day moving average & 38.2% of $63.36 to $59.52
SUP 2: $60.30 Bear-flag base from 25 Sept
SUP 3: $59.50 Trend support line from Sept 2003
SUP 4: $58.60/65 Daily Bollinger base & Daily low 28 Nov 2005

Nov Nymex crude oil is forming a bear-flag on daily charts, i.e. continuation of move lower. Flag top comes in at $63.35 and whilst this caps, risk is on the downside, and break below $60.30 -- targets a measured move to $57.25. The long-term trend line at $59.50 is pivotal and break below here puts bears in control.

IRAN UPDATES

Iranian Pres Ahmadinejad rules out any suspension of uranium enrichment activities 'even for one day,

COMEX Gold and Silver Open Higher

Comex gold and silver open higher.
Support is coming from an upturn from early-week lows in crude oil.
Funds are starting to add to long positions again.
There is some strong buying across the board.

Silver is also benefiting from follow-through.

December gold is up $4.70 to $608 an ounce.
Gold support at $592 and resistance at $610 and $625.

December silver is up 7.5 cents to $11.775.

Data Reactions

A Rather large dissappointment from US GDP figures. Its rare that we see this kind of down-revision in the final estimate.
This is not positive for the US rate outlook, but the strong rally in fixed income in the last week has priced in this kind of revision already.
Hard to see that USD should go higher on these figures.

Market will take few minutes to digest the figures.

Prepare for US Data today at 12:30 GMT

As Market is getting near the time of US Data release, the Volume is going enormously low, Everyone getting ready for Big Datas coming out all together at 12:30 GMT
Expect very Heavy Movements in Market today.
Make yourself ready.

Comments from ECB Axel Weber

Comments from ECB's Axel Weber
-- Eurozone still faces inflation risks despite recent decline in oil prices.
-- No guarantee that downturn in oil prices will last.
-- ECB likely to revise down its inflation forecasts if oil price decline does last
-- But difficult to estimate the scale of such revision at this stage.

Important US Economic Datas Today

12:30 GMT

GDP Annualized - Expected - 2.9%
GDP Price INdex - Expected - 3.3%
Personal Consumption - Expected - 2.6%

Core PCE QoQ - Expected - 2.8%
Initial Jobless Claims - Expected - 315K
Continuing Claims - Expected - 2470K

All Above Coming out at Same time - 12:30 GMT
So we could see very HEAVY Big Movements in Currencies and all around the Board.



14:30 GMT

EIA Natural Gas Storage Change - Expected - 78

TREASURIES UPDATE

Bunds will remain fairly calm in for the day until the U.S GDP data is released 14:30 this afternoon CET.

Euro Bund could be moving down from 118,66 with target 118,16 stops at 118,90

Other market movers than data would be central bank speakers, including ECB's Tumpel-Gugerell, Gonzalez-Paramo, Weber and Philadelpia Federal Reserve President Plosser.

Anything else than fresh hawkish comments from the ECB speakers would be a surprise and supporting the idea of remaining short in the European treasuries.

PRECIOUS METALS FUTURES UPDATE

Gold was spurred by the rallying oil where inflation hedgers entered the market, and by the increased Asian and middle East physical demand.

We expect both Silver and gold to move higher as we have entered positive territory breaking out of the range trading seen for some time.

Silver in a medium term trading should see 12.00 - 12.040 oz level in December contracts where a good entry point would be 12.500 oz

Gold support at 602,80 looks like it will hold where market in medium term should test the $615 oz level and in the longer perspective $625/oz

ENERGY FUTURES UPDATE

Yesterday´s main event was the inventories that came out with bearish numbers and pressed the crude oil just below the 60 USD level.

However, massive buy orders were triggered and pressed the oil back up and through the important 62,50/bbl resistance and peaked at $63,10 bbl.

With OPEC´s latest statements in mind that production could be cut if prices remains below $60 added to the buy side. With current outlook $65 is within the range for next few days of trading.

FOREX UPDATE - USD

The US dollar has traded in a 1.2698-1.2733 range against the EUR and a 117.33-117.55 range against the JPY this morning in Asia.

The USD continues to be stuck in its broad ranges against the majors despite the housing market continuing to slow as Fed officials so far have not signalled to the market that the next move in Fed funds will be down rather than up.

Yesterday the Fed's Lacker remained hawkish in an interview with Reuters, warning that he was not confident that US inflation was on a downward trend.

Lacker was the only member who voted for a rate hike at the last FOMC meeting on September 20 so his hawkish comments were not that surprising. Nevertheless while bond yields remain subdued below 4.60% for US ten year bonds, other Fed officials have so far not justified weaker interest rates at the long end. Last night the Fed's Hoenig also spoke arguing that while the economy will slow, inflation remains an issue and consumer optimism remains fairly high.

Thus with no cue yet from the Fed, the currency markets have not been able to break out of their ranges. Investors therefore need to keep watching Fed speeches and economic data for signs that the slowdown in the housing market will start to affect the broader economy.

Today we have the final Q2 GDP data and initial jobless claims. We think USD bears should remain patient waiting for either a surprise Chinese revaluation, weaker US data or a change in stance by the Fed to help push the USD weaker..

Gold Stands Above $600

Gold Stands above $600
Next resistance lies at 607 and 612 levels
Which is soon be Aimed, Clearance for it, will open channels for heading towards 640 levels.
Buying Interests Emerging in the Lane.

Nov WTI Crude Oil Closes Higher

November WTI Crude Oil closed at 63.05 (maintaining a nice reversal).
We have seen a nice turning point after the US inventories where traders believe that the recent $19 slide in Crude is Enough and may not price correctly the global growth if decelerating is still at a decent path for 2007.
Above $63, next resistance at $65.
Support at $61.85 / 62.30

The SOlid Push Helped Precious Metals

GOLD - Clears the Level as we ANalyzed today

GOLD CLEARS THE THE LEVEL AS WE ANALYZED TODAY
A nice clearance of 597, Impressive.
Crude Oil helped it today, by Bouncing Heavily after touching the lows and trading right now in Resistance.
Aslong as it stays above 597 and 600, Signs of good push upwards.
It Appears the reversal mood of Gold is Appearing in the Game.

Crude Oil Dropping Heavily

Crude Oil dropping like a stone after bearish Inventories Particularly with a huge draw on Unleaded Gasoline, no much support before the $60.10 level
Resistance $60.90 area.
If we have a daily close below this Support, we could retest the lows Quickly

The drop in Crude Oil is leading Gold to drop trading around 591.50 now

Dollar Choppy After New Home Sales Data

Dollar Choppy After the New Home Sales Data.
Providing a Suprising Strength.
Durable Goods Suggested Weak Dollar
New Home Sales - Heavy figure, giving signs of little strong dollar.
However, market will be Analyzing a Little right now, to adapt the trend.

US Data coming out in 5 minutes

Data coming out in 5 minutes
New home Sales - 1040 Exp
New Home Sales MoM - -3.0% Exp

Stocks Trade Idea - YAHOO

Sell Yahoo on the break of USD24.80
Target USD20
Stop USD26.5

Market Await for New Home Sales

Market waits for Heavy Data coming out at 14:00 GMT
New Home Sales - Expected - 1040K
New Home Sales MoM - Expected - -3.0%

We could expect Down Fall in Dollar today Heavily, Durable Goods pushed back the Dollar back in to RED Lane, Pushing EUR/USD upto 1.2720 but eased back traders Quickly booking profits, moved back to 1.2680 levels, Not much Volume seen at all today.

It appears Stocks Could start in a Minus Territory.

DOLLAR WEAK - BAD FALL IN DURABLE GOODS

Dollar Weak
Durable Goods Very Bad Fall
US Durables out at -0.5% vs 0.5% expected
Durable Less Transportation out at -2.0% vs 0.5% expected

10 Minutes for US Data

In 10 Minutes we will have
Durable Goods Orders - Expected 0.5%
Durables Ex. Transportation - Expected 0.5%

US Economy Datas

US Economy Data
11:00 GMT - MBA Mortage Applications
12:30 GMT - Durable Goods Orders - Expected - 0.5%
12:30 GMT - Durables Ex Transporation - Expected - 0.5%
14:00 GMT - New Homes Sales - Expected 1040K
14:00 GMT - New Home Sales MoM - Expected -3.0%

Energy Datas today

14:30 GMT - DOE Crude - Expected - -1600K
14:30 GMT - DOE Gasoline - Expected - 800K
14:30 GMT - DOE Distillate - Expected - 1700K
14:30 GMT - DOE Refinery - Expected - -1.00%

Gold giving a Solid Push - Buying Interests Increasing

As we analyzed Early Europe Morning, We expected 598 to soon be touched, However gold trades around 596, We look ahead in NY trading, to see how they react, And main focus remains on Datas, Weaking Dollar, gives another Pattern of boost.

Silver showing a very Nice Buying Pressure today, trading now at 11.65 levels.

METALS FUTURES MARKET UPDATE

Reports of strong physical bullion buying in the far and middle east, with increasing anecdotal evidence of investor demand moved precious metals into bullish territory yesterday. We expect this theme to develop further throughout today's trade.

We see metals further supported by what seems to be the end of the massive energy market liquidation, as we have seen an increasing correlation between Gold and Crude recently.

Silver Futures Buy support at 11.500 for short term long positions. Profit taking 12.000 – 12.040. Stops below 12.180 (Short term trade – 2-3 days).
Medium term trade perspective points towards a move back into the upper daily range between 12.040 to 12.639

Europe Zone Economic Data

8:00 GMT
Europe Zone Data
M3 sa. Mom 3 mth ave.
Expected 7.9%

FOREX UPDATE - USD

The US dollar is generally firmer against most currencies due to an improvement in consumer confidence, and is much stronger against NZD, which is down sharply thanks to comments from NZ Finance Minister Cullen. The Conference Board's consumer confidence index for September rose to 104.5 from 100.2 in August and was higher than market expectations of 103.0.

The data is potentially important as the link between a softening housing market and the broader economy is via the consumer and resilient personal spending could see the market question the consensus view of a sharp US slowdown.

Data in the near-term that is relevant to personal consumption includes personal consumption expenditure for August and Uni of Michigan consumer sentiment for September (final), both on Friday. Of course the views of Fed officials on this subject will also be important and we can look forward to speeches from Kroszner later today, Hoenig and Minehan on Thursday and Poole on Friday.

Meanwhile senators Schumer and Graham have indicated after meeting with Treasury Secretary Paulson that they are unsure whether to proceed with their bill this week.

Falling crude prices seem to be have also moderated pessimism with respect to the US outlook and in that context the OPEC President's comments that "something needs to be done" to steady the price of oil were interesting. That could potentially be bullish for oil prices if it signals a willingness by OPEC members to squeeze supply. In general any supply side driven shock to the oil markets is unambiguously negative for the USD, while a demand side shock can coincide with USD strength.

The strong consumer confidence data makes us a bit more cautious in our negative views on the USD although we should note that lower gasoline prices probably account for much of the bounce.

New home sales for August are due at 1400 GMT, while durable goods orders for August are due at 1230 GMT.

Market Update

Some talk about Abe appointed Finance Minister, Omi, which is supposed to be bullish for JPY: In favor of cutting government spending and doubling foreign investments in Japan. Watch out for the downside in EURJPY and USDJPY.

Stocks: A very strong day. 1370-area next on the upside in S&P500. DAX: the door is open to 6160.

Precious metals gathering strength. Silver looks promising.

574.98 Important Level for Gold

574.98 and 570 is Important Level for Gold, for the moment,
Crossing that will lead it to go 540 levels.

For Bullish Channel to form, we shall Cross 598 and 605 levels, to have a Steady Uprise.

We Aim for 597 this week and up, as the current momentum shows a Daily rise in the price, And we shall see a nice Long ride soon, due to heavy Physical buying intending to flow by. However we shall keep focus on Fundamental Results as well.

Crude Oil Reversal upwards helping Precious Metals,
Any chance of it striking to $55 - Could effect heavily..

FOREX UPDATE : EUR/USD Big support : 1.2630

EURUSD saw follow-through declines Tuesday, walking through Fibonacci support at 1.2708 without much hesitation. While hourly momentum indicators are oversold, there's not much significant support till the 1.2630 notable low from Sep 15. And it's a big one, with not much below it till 1.2570, the .764 retracement of the 1.2456-1.2941 rise. Right now, it would take a move a reaction high from Monday at 1.2767 to offset current downward pressures.

USDCHF made further upward progress Tuesday, knocking mild resistance at 1.2419, the .382 retracement of the 1.2626-1.2291 decline. Now there's room toward secondary resistance around 1.2497, the .618 retracement of the same drop. Only a break of the 1.2291 low from Friday would offset upward pressures for now.

GBPUSD slowly side toward the solid support zone from the Sep 14 1.8920 high to the Sep 20 1.8863 reaction low. The lack of downward momentum suggests that a break there will likely prove difficult. Nonetheless, only a break there would reasonably dismiss the chances for a run at Monday's 1.9076 high.

USDJPY responded to the upside on back of rising hourly momentum indicators. Resistance comes to play around 117.44, the .618 retracement of the 118.30-116.06 decline. Not far of is congestion in the 117.53 to 117.80 area, reaction highs from Sep 20 and 19, respectively. As long as this area holds, we'll expect this pair to remain vulnerable toward the Sep 5 115.56 reaction low.

USDCAD continues to consolidate last week's late drop. Resistance runs from Thursday's 1.1208 reaction high to 1.1229, the .618 retracement of the 1.1298-1.1118 decline. But only a move above last week's 1.1298 high would offset the overall bearish pressures. Looking ahead, below Friday's 1.1118 low, the next support is nearby from 1.1092 to 1.1091, the .764 retracement of the 1.1029-1.1298 rise and the Sep 8 reaction low, respectively.

AUDUSD maintains choppy path from the Sep 12 0.7482 low, keeping the bearish tone intact from the Sep 4 0.7722 high. Penetration of 0.7482 would open the door toward the 0.7442 Fibonacci support. It marks the 61.8% retracement of the 0.7269-0.7722 rise.

Senators Schumer & Graham are scheduled to meet T Secretary

Senators Schumer and Graham are scheduled to meet T Secretary Paulson today at 3:30 GMT.
They will discuss the proposed 27.5% Chinese Tariff which is planned to hit the Senate floor this week.
We are expecting to hear comments after the meeting regarding if the bill will go forward or not.
The outcome of this meeting could have significant ramifications on the FX Markets.

EUR/USD looks mantaining Pressure below 1.2700

EURUSD continues to edge lower from 1.2834, Sep 22 high. This level now stands as yet another obstacle ahead of the cluster of resistance between 1.2868, the 76.4% retracement of the 1.2941 to 1.2630 decline and 1.2880, Aug 31 reaction high. Having already violated last Friday's 1.2775 low, we expect further downside towards 1.2708, the 61.8% retracement of the 1.2630 to 1.2834 advance.

USDCHF having held support at 1.2287, the 76.4% retracement of the 1.2183 to 1.2625 advance, the USD is now poised for a fresh assault on Friday's 1.2432 high ahead of extended upside towards last Thursday's 1.2545 high and ultimately Sep 15's 1.2625 top.

GBPUSD the risk of an intra-range setback is now more acute as sterling encroaches on the cluster of resistance between 1.9094, Aug 31 reaction high and 1.9146, Aug 8 top, but the immediate outlook remains constructive above the formerly resistant 1.8920 level.

USDJPY is expected to remain vulnerable near-term following the recent failure ahead of the key multi-year trendline resistance at 118.56. With short-term trend-line support originating form early August also cleared, the focus remains on 115.56, Sep reaction 5 low. Retain a negative near-term stance beneath 117.49, Sep 21 high.

USDCAD having rejected the 61.8% retracement of the 1.1460 to 1.1029 decline at 1.1295, looks set to take out support at 1.1118 from Sep 22 and downside trigger for 1.1029, Sep 1 reaction low. Maintain a bearish view below 1.1298, Sep 20 reaction high.

AUDUSD failure to make headway beyond 0.7582, Sep 21 high continues to weigh, with a break of 0.7482, Sep 13 low expected to yield further downside towards 0.7442, the 61.8% retracement level of the 0.7269 to 0.7722 advance and ultimately 0.7405, Jul 19 reaction low.

EURO Eases As Investors rethink ECB rate hike prospects

The euro drifted lower as investors continued to scale-back European Central Bank rate hike expectations. It did however, get a fleeting lift from stronger-than-expected German data. The key Ifo business climate index declined for the third month in a row, easing to 104.9 in September from 105 in August. The headline index has been easing since it hit a 15-year high of 106.8 in June.

Investors greeted the news by buying euros but there was not enough momentum to push the single currency higher by any significant margin. Given that the outcome was only slightly above consensus, the data is unlikely to have a lasting impact.

Concerns about slowing US growth, the strengthening euro, elevated energy prices, and the upcoming VAT hike in Germany will continue to put downward pressure on the Ifo in the months ahead.

Euro zone rate expectations are starting to recede. This is probably a reaction to the drop in oil prices which should in turn drag euro zone inflation well below the European Central Bank's 2 pct target rate."ECB inflation hawks must be a lot less worried than they were. Softer inflation data will ensure the ECB sticks to gradual, 25 basis point moves,".

The dollar, meanwhile, was stuck in narrow ranges ahead of some key US data. The Conference Board's consumer confidence index is seen rebounding to 104 in September from August's 99.6. Falling energy prices have given extra cash to consumers, but the index is still expected to remain below the average level of the first half of the year.

Tomorrow, market attention will be on US durable goods orders and new home sales.
That aside, markets will also be keeping a wary eye on US Treasury Secretary Henry Paulson's meeting with Charles Schumer and Lindsey Graham, the key sponsors of legislation that would impose penalty tariffs of 27.5 pct on all Chinese products coming into the US unless China goes further to revalue its currency.

The pound held steady despite a survey showing that wage deals in the UK remain at subdued levels. Markets are holding steady to predictions that the Bank of England will put up interest rates again in November, to 5.00 pct from 4.75 pct. The central bank hiked the benchmark rate by a quarter point to 4.75 pct in August.

Gold Futures Update

Still sideway trading yesterday, Gold resistance seen at $599 where a double top is possible, though we have a more positive bias as we see some improvement on the technical side with an engulfing pattern on the daily candlesticks chart.

Gold Support at $589/92 level; Resitances at $607 and $615.

Markets Buzz

Unsourced story going around that "ECB unhappy to see more reverse shifts into EUR Currently"

Silver Futures Update

Silver Futures targeting 11.90 levels, As been having Sideway trading for the last three sessions but technical shows an Engulfing pattern with some potential to the Upside.

Crude Oil Update

Reported comments from SAMA Vice Governor -
- Even at $60.00/barrel, oil price is "very healthy"-
- Inflation not a worry, declines comment on rates

Todays Data

Spotlight falls on the German September IFO survey with the business climate seen at 104.4, expectations 100.5 and current assessment at 108.30 (0900 GMT).

Then it's over to the US slate for Richmond Fed September manufacturing index and September Conference Board Consumer Confidence index, seen 104.0 (1400 GMT) and the ABC/ Washington Post Consumer Confidence Index (2100 GMT)

Gold - Signs of Bullish

Gold looks like Aiming for clearance of $600.
Buy at 590-593 levels
Stops at 587 level

North Korea will probably test a nuclear, chance of this year

North Korea will probably test a nuclear weapon, with an even chance of doing so this year, as Kim Jong-il's regime tries to assert its defiance in the face of increasing international pressure, Richard Armitage, former US deputy secretary of state, said in an FT report. "I think it is more likely than not," Armitage, who is urging Washington to talk directly to Pyongyang to try and resolve the nuclear stand-off, said.

Equities Update : JAPAN

Nikkei 225 is expected to start up in positive territory on speculation the US slowdown is not as severe as originally thought after the housing sales fell less than expected.
There is a lot of fear about a housing bubble, but those may have been exaggerated a bit.
Nikkei futures December last traded at 15,685 up from the close of 15,580 in Osaka and 15,585 in Singapore./

Precious Metals in Lead, Crude Oil Stands above $60

We look for 597 levels to be cleared, for opening a good channel upwards.
The current momentum is Bullish Overall.
EveryDay Closing is forming a Bullish Panel, And as we see Around every 2-3 days we are seeing $10 up or down, last week we were around 575 levels, today we stand above 585 , currently gold at 590+
Crude Oil Positioned itself above $60 before closing today.
EUR/USD had a slam down, due to Existing Home Sales data.
We still eye for 1.30 in 1 month period time, USD/JPY plays in tight range of 116 - 117, Eyes at 114 in a month.
Overall the Position of the Precious Metals Stands Satisfactory, and we shall see slight increase soon. Any Suprise downfall crossing 575 (mini support) , 570 (Heavy Support) shall change the whole picture, leading it to have a high fall towards its Previous 200 MA, where it reversed at 541 - 543 levels.

Oil Trading Higher

Oil trading higher today after OPEC said its members had discussed falling prices since their Sep11 meeting.
There is a lot speculation that OPEC will take Action if the current market continues.
They Announced earlier this month that they will defend the $55-60 level.
Nov WTI +1.11 at $61.66

The Push is helping precious Metals as well

Crude Oil Pushing Higher

Crude Oil Spiking higher Heavily Again
November Contract now up $0.95 at $61.50
Helps Precious Metals

GOLD RALLIES BACK TO POSITIVE

Gold with a Very Quick force, bounces back to 589 levels, coming in to positive levels, just before NY Spot market closing, After it went to 582 levels, Which appears a Solid Good Signal of a reversal very soon to come.
This week we await for clearance above 597, which is important for the Gold to perform a Bullish Path, and cut its level from range bound trade.

FUTURE Update : Cocoa

NYBOT Cocoa Pushing Lower on Speculative Selling.
Dec Cocoa -9 at 1490

FED Fisher Says

Higher inflation remains a bigger risk for the economy than a sharp slowdown of growth, said Richard Fisher, the president of the Dallas Fed bank on Monday.

"I continue to fret more about inflation than I do about growth," Fisher said in a speech prepared for delivery in Monterrey, Mexico.

Many economists see the economic slowdown accelerating, but Fisher has remained upbeat. In a speech earlier this year, he said economists predicting a recession sounded like "Eeyore," the gloomy donkey from the Winnie-the-Pooh children's' books.

"While I am well aware of the risks to economic growth, the history of inverted yield curves, and the ever present possibility of exogenous shocks in a politically hazardous world, the 'balance of risk' in my book, is still tilted to the inflation side of the equation," Fisher said.

Fisher dismissed the benign August PPI report released last week as unreliable. The best gauges of inflationary pressures "are not yet comforting," he said.

Fisher said the August core CPI "was closer to 3%, not 2%."

"Inflation remains elevated and leaves us small choice but to remain vigilant," Fisher said.
Fisher said there was a "serious correction" taking place in the housing sector, but said outside this sector, the economy is "healthy and robust."

Fisher said the correction in housing was inevitable especially after cheap financing and mortgage "innovations" added to the fervor.

"Regardless, the market for residential real estate had to adjust and it is now doing so," Fisher said.

"As long as that correction is orderly and does not threaten the economy's financial stability, we are best advised to let it run its course, monitoring it carefully to ensure that it does not infect the rest of the economy," he said.

Helping to mitigate downside risks is the fact that consumers are getting "a shot in the arm" from lower gasoline prices, he said. In addition, the rest of the world is growing faster than the United States.

Dollar gets Slight lift after Data

Dollar gets a slight lift as the Existing-home sales beat expectations, less softness. Stocks steady but Tsys deflate.

Data out : Existing home sales

Existing Home Sales out at : 6.30 vs 6.20 Expeccted
Mom Out at -0.5% vs -2.1% expected

Economy Data Update

US Existing Home Sales out in a few minutes
Very Important Figure
Market Expects a slow down to 6.20 M units from 6.33 in July
If this figure disappoints, the rally in fixed income will continue and the USD will weaken.
European Currencies should be bought if we see a dissappointed.
Stocks could get hurt

FUTURES UPDATE : Precious Metal Weaken before Existing Home Sales

Precious Metals Weakening Before the Existing Home Sales (coming out at 14:00 GMT)
Gold FUTURES Support seen at $587 if broken down we will see it moving towards 578 - 580
Resistance 593

Fed President Fischer says..

Fed President Fischer (non-voting Hawk) is speaking in Mexico.
Saying "appropriate action needed if inflation remains high... Mexico less vulnerable to crisis.. US growth should lower inflation over time.. US Consumer will get a shoort in the arm with cheaper gas..Serious corrention is the US housing Market."

FED: Recent Development in Several Areas

FED Reports : "recent developments in several areas, especially energy prices, now suggest... could be a boon for both stocks and bonds: The Fed might be content to sit on the sidelines for a very long time... trends in inflation and economic growth appear to be closely tracking the favorable expectations the Fed laid out in its June forecast."

Many Papers Carried the TOP STORYat the Weekend

Many papers carried the story at the weekend that Osama bin Laden had died in August after falling to Typhoid. However, spy agencies and French President Jacques Chirac played down the claims.

Gold trading in Range Bound - Awaits Economic Data

Spot Gold, Continues to play in Range bound trading before the US Economy Data, At the range of 585 - 589.
Existing Home Sales is considered an Important key Data which comes out at 14:00 GMT, and as well todays Fed Speaker speaking on Economy at 13:15 GMT.

FOREX UPDATE - EUROPE

The US dollar traded with a soft undertone during the Asian session, posting a 1.2778-1.2820 range against the EUR and a 116.69-116.27 range against the JPY.
The risks of a US led global slowdown and speculation of further yuan appreciation are weighing on financial markets.
The USD softened while Japanese stocks ended the Asian morning session lower across the board with the Topix down 0.5%. Oil prices traded below $60, their lowest level in six months.

It's a moderately heavy data week in the US, and in general we expect the numbers to support market views that the economy is slowing, with contained price pressures.
Fed speakers will also be of interest with Fisher, Hoenig, Kroszner and Poole all scheduled, and the market will be sensitive to any changes in tone from the very consistent message sent over the past two months.

Fed's Fisher speaks on the economy (13:15, GMT), while August Existing Home Sales are due at 14:00, GMT.

Energy Future Update

Oil Continues its free fall and no chances of looking to stop, we do not see any technical sign of a recovery. Even if we are overstretched on our weekly and daily charts we could easily go towards $50 a barrel in the next months with ample stocks and no “bad” news on the geopolitical side.

The Iranian president said “we don’t need a nuclear bomb”. US UN Ambassador said the denial is not credible. Market sentiment has completely changed and each normally is a reason to sell.

Short term WTI support at $59.60/25 and 2006 low at $57.72.

METALS FUTURES MARKET UPDATE

Recently Precious metals technicals are showing some strength with Friday breakout above $592.70 for Gold but we are still range trading .

Russia said on Friday that the Central Bank wants to increase the volume of Gold in its currency reserves, it was enough to take the market higher.

We could see more gains in the pipeline to $607 and $615 during this week even if it is a 50/50 call as recent weakness in US economic datas could pressurize metals.

Trade Idea: Silver: Buy at $11.24/28 targeting $11.55 and $12.00 with a stop below $11.165.

Crude Oil Fall in Asia Trade -

Oil prices fell below $60 in Asian trade, their lowest level in six months, before regaining some ground as concerns over Iran's nuclear program continued to ease.
At 0400 GMT, New York light sweet crude for November delivery, was down 42 cents at $60.13 a barrel, having touched a low at $59.94.

FOREX TECHNICAL LEVELS

EURUSD spent much of the American session backing and filling the overnight run-up to the 1.2834 new weekly high. While the action from this high had corrective qualities, lacking upside momentum, heavy resistance in the 1.2880 area should prove quite formidable. Support is at the 1.2755 previous high and breakout trigger.

USDCHF followed through to the downside early Friday, knocking out the 1.2394 reaction low from Sep 11. Penetration there leaves little support till the Aug 31 reaction low at 1.2228 before the prominent 1.2183 low from Aug 21. Mild resistance is at Thursday's 1.2545 reaction high.

GBPUSD consolidated the new short-term trend high at 1.2065 on Friday. With solid support running from the Sep 14 1.8920 high to Wednesday's 1.8863 reaction low, focus will remain on the 1.9094 Aug 31 high.

USDJPY consolidated recent declines, but held below initial resistance from the previous breakout low at 116.97. Focus remain on the 115.56 Sep 5 low.

USDCAD sold off sharply after the rally from 1.1029 stalled around the 1.1295 Fibonacci resistance, the 61.8% retracement of the 1.1460 to 1.1029 decline. But this drop stalled right at the 1.1119 support, a reaction low from Sep 14. Mild resistance is at Thursday's 1.1208 reaction high, but only a move above 1.1295 and 1.1298-this week's high-would offset downward pressure for now.

AUDUSD has maintained a choppy path from the Sep 12 0.7482 low, keeping the bearish tone intact from the Sep 4 0.7722 high. Penetration of 0.7482 would open the door toward the 0.7442 Fibonacci support.

FOREX UPDATE : USD

USD Fed officials to speak this week.

Currency markets were flat on Friday in the absence of any new economic developments, and the EURUSD trade a 1.2780-1.2827 range, while USDJPY traded between 116.08-116.54. It's a moderately heavy data week in the US, and in general we expect the numbers to support market views that the economy is slowing, with contained price pressures.

Fed speakers will also be of interest with Fisher, Hoenig, Kroszner and Poole all scheduled, and the market will be sensitive to any changes in tone from the very consistent message sent over the past two months.

We expect the USD to continue to struggle as steady erosion of carry advantage and a less favorable environment for carry trades leaves the currency vulnerable to long running structural issues.

Also of note will be possible vote on the Graham/Schumer China tariff legislation in this final week before Congress recesses. Senator Schumer has vowed to press for a vote, but it is far from certain that a vote will be held. While even approval by the Senate would leave the legislation far from becoming actual law, a yes vote would be quite negative for the USD.

Crude Oil helping commodities as well

WTI Nymex crude oil is paring back overnight gains and now back below $62.00. The move higher overnight was seen as short-covering after reports that world powers had given Iran a new early October deadline to halt uranium enrichment, before they start discussing United Nations sanctions.

However, with oil supplies ample ahead of the winter season demand and risk of a hard-landing in the US in the wake of the surprising weak US Philly Fed survey, traders say speculators are seen testing the OPEC resolve by pushing crude oil prices below $60.00 level.

A close below $60.15 today will be deemed as extremely bearish, i.e. the first close below the 100-week moving average since April 2003.

Commodities Giving a Good Push

Commodities Pushing Higher.
Everything Providing a Clear picture now, after FOMC, where Dollar is all the way Weaker everywhere.
Gold trading 588 currently
Silver up to 11.20 levels.
We aim for gold to clear 596 levels where 200 MA lies

EUR/USD Update

EUR/USD clears 1.2803 Resistance level.
Aiming for 1.2830/40 where Stops are currently being Developed.

Commodities Pushing High

Commodities Shall be pushing higher. As Due to dollar weakness and Crude Oil pushing up a little, helping the commodities
The low prices currently Emerging interests of Jewellers in Asian Countries, to heavily buy at current levels, to compile Heavy Stocks for the sale for next month, when the Festival starts emerging.
As we mentioned last week, clearance of FOMC, shall help many other things to find perfect direction,
EUR/USD doing a good Job, and we aim for 1.30 very soon
USD/JPY came all the way from 118 rigt now 116.26 levels, We aim for 114 in 1 month time.

Gold Technically Developing its new Triangle, As we mentioned few days back regarding 570, Which is a very heavy Level, crossing that If a Suprise emerges, We could meet 543 again, However for the moment, its Unlikely, ANd we are seeing gradual Push upwards, with the help of other Instruments, which in result helps the Commodities Market.

FOREX UPDATE: EUR/USD Clears Resistance

EURUSD blew through the pivotal 1.2755 resistance on Thursday, ending over nine sessions of choppy action between there and the Sep 15 1.2630 low. The next resistance is at 1.2803, the 61.8% retracement of the 1.2941-1.2630 decline. A sustained move above there would certainly change the technical mood of this market, bring up the possibility of a move above the 1.2880 Aug 31 prominent reaction high. Mild support is Thursday's 1.2696 reaction low.

USDCHF broke the 1.2434 Sep 14 reaction low, putting the short-term bull trend on hold. The next support is 1.2394 reaction low from Sep 11. Only a move above Thursday's 1.2545 reaction high would offset the downward pressure for now.

GBPUSD continues to press higher, knocking out resistances at 1.8938 and 1.8978, the 61.8% retracement of 1.9146-1.8601 and the 76.4% retracement of 1.9094-1.8601, respectively. Penetration there brings the prominent reaction high from Aug 31 at 1.9094 into focus. Mild support is in the 1.8931 to 1.8920 congestion area from previous highs.

USDJPY pushed through support from Wednesday's 116.97 low. Mild congestion is in the 116.10 to 115.91 area, but the next bug support is from the 115.56 reaction low from Sep 5. The Sep 18 118.30 trend high to the 118.50 trendline intersection remains the pivotal upside barrier for now.

USDCAD has sold off sharply after the rally from 1.1029 stalled around the 1.1295 Fibonacci resistance, the 61.8% retracement of the 1.1460 to 1.1029 decline. Mild support is in focus at Sep 18's 1.1160 reaction low, followed by 1.1119, a reaction low from Sep 14.

AUDUSD remains choppy from the 0.7482 Sep 12 low, but it has yet to sustain a break from the 0.7574 Fibonacci resistance, the 38.2% retracement of the 0.7722-0.7482 decline. Violation there opens the door toward a mild resistance at Sep 7's 0.7607 reaction high, followed by the 61.8% retracement at 0.7630. Support is found at 0.7505 and 0.7404, reaction lows from Sep 19 and Sep 15, respectively.

USD Falls due to Philly Fed

USD gives a deep fall after Philly Fed
Providing a Clear picture for doors to open
We shall soon see EUR/USD heading 1.28+
A Negative reading in Philly Fed, havent been Seen in three Years, a Suprise Action, gave a solid push to EUR/USD, Commodities.
USD approached weaker, Fixed Income Pushed Higher, Stocks Dropping.
Clear Picture approaching.

EQUITIES : DJI Technical Levels

DJI Technical Levels


RES 1 - 11690.82
RES 2 - 11602.33
RES 3 - 11572.12

Current - 11613.20

SUP 1 - 11493.63
SUP 2 - 11446.35
SUP 3 - 11364.86

Equities Update

FOMC failed to stir much action in equity markets, which has often been the case. Investors widely expected the pause to continue accompanied by a dovish statement. That's what we got but S&P 500 still couldn't close above it's five year high 1326. We see this as a sign of weakness and are still baffled by the continued strength of USD. A strong USD is good for equities and not until it caves in (we're quite confident it will at some point) stocks should do just fine. Still, a break of 1326 is good indicator for bulls/bears tug-of-war. A gap is opened at 1318 and we think it'll be filled today or tomorrow. Weekly Market Update is short from 1325 with stop 1331, targeting 1291 and 1261.

After posting strong results on Tuesday, Oracle added 11 pct. yesterday and SAP got a boost as well, up 2.3 pct. In our note last week, we noted that IT and Health Care are the two most undervalued groups in the S&p 500 currently (Financials, Utilities being the two most expensive) and that there's strong evidence that tech and software spending is far from peaking despite weakness close to the consumer.

Companies such as SAP, Oracle and others benefit from the ongoing capex cycle that has at least another 6 months to play out. Plenty of strong charts in software and computer-related shares in both Europe and the US - we urge you to have a look at them if you're investing for the mid-term.

Index charts have improved after yesterday's impulsive rally. A close in DAX above 5980 would open the door to 6160 and SMI is just 60 points of fresh all-time highs. FTSE, however, still looks bearish and 5945 ought to cap any further near-term strength. There's severe risk of acceleration lower upon a close below 5830

Crude Oil Futures Update

Yesterday oil continued the downtrend after the weekly inventory release. We had a larger build in distillates, 5th week in a row, which sent November oil to $60.61 the lowest level since March 06.

OPEC announced earlier this month that the they see the $55-60 level as defense line, which could lead to output reduction if this continues.

President Bush did once again stress the need to end the ongoing nuclear issue with Iran in a diplomatic fashion. WTI Crude are in oversold territory and we expect a correction towards $63.00 on fresh longs (technical buying).

Trade Idea: Buy at 60.95; Target at 63.25; Stop at 60.20.

IRAN UPDATE

Iran could trigger a global terrorist campaign and choke the West's oil supplies in the event of war with America, the top US commander in the region has warned, the Telegraph reports. In a rare public discussion of how a war with Iran might unfold, Gen John Abizaid, the chief of the US Central Command, gave a sobering assessment of Iran's military potential. He warned that in a war Iran would rely on unconventional means to challenge America's superiority.

EZ Economic Data

European Zone Economic Data coming out today

8:00 GMT
Current Account -

9:30 GMT
ECB Weber Speaks in Beijing

FOREX TECHNICAL LEVELS

EURUSD Holds Below 1.2755. It kept to a sideways, noisy theme Wednesday, with post-event strength holding below pivotal resistance from last Thursday's 1.2755 reaction high. Only a move above there would shift our focus away from the Sep 15 1.2630 trend low. The next important support is 1.2570, the 76.4% retracement of the 1.2456-1.2941 rise.

USDCHF kept is choppy action above support at the 1.2434 reaction low Sep 14. Only a break there would shift our focus away from the 1.2625 Sep 15 trend high. Remember that there's little support above there till 1.2764, the .618 retracement of the 1.3287-1.1919 decline.

GBPUSD ground to a new recovery high from the 1.8601 Sep 11 low, briefly exceeding the 1.8920 high from Sep 14. Secondary resistance runs from 1.8938 to1.8978, the 61.8% retracement of 1.9146-1.8601 and the 76.4% retracement of 1.9094-1.8601, respectively. Only a move above this area would lessen the chances for a revisit of the 1.8734 reaction low from Sep 18.

USDJPY probed Tuesday's 116.99 low, keeping Wednesday's violation to merely two pips. We'll need to see follow-through declines below this area to confirming waning upside momentum, possibly exposing the 115.56 reaction low from Sep 5. The 118.50 trendline intersection remains the pivotal upside barrier for now.

USDCAD continues to hover generally below the 1.1295 Fibonacci resistance. It marks the 61.8% retracement of the 1.1460 to 1.1029 decline, and only a sustained move above it would expose the 1.1321 prominent reaction high from Aug 15.

AUDUSD recent recovery from 0.7482 maintained a three-leg corrective path, violating Fibonacci resistance at 0.7574 by merely two pips. This level marked the 38.2% retracement of the 0.7722-0.7482 decline and its ability to reject the recent correction keeps our trend focus on the Sep 12 0.7482 low, followed by 0.7442, the .618 retracement of the 0.7269-0.7722 rise.

TEXT OF FOMC STATEMENT

The following is the text of the statement that the Federal Reserve released on Wednesday with its decision on interest rates.

"The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

The moderation in economic growth appears to be continuing, partly reflecting a cooling of the housing market.

Readings on core inflation have been elevated, and the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time, reflecting reduced impetus from energy prices, contained inflation expectations, and the cumulative effects of monetary policy actions and other factors restraining aggregate demand.

Nonetheless, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Jack Guynn; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; Kevin M. Warsh; and Janet L. Yellen. Voting against was Jeffrey M. Lacker, who preferred an increase of 25 basis points in the federal funds rate target at this meeting."

Forex Update - After FOMC

Jitter after the FOMC - EUR/USD hitting small Stops ahead of 1.2725 where offers are located. More offers at 1.2750.
Bids now spotted at 1.2680/85.
USD/CHF hit stops below 1.2480 and may have caused the move in EUR/USD

Fed Pause -

FED Pauses in there second straight Meeting
History tells us that after a tightening cycle, if the Fed then goes on hold for at least four months, then the probability that the next move is a rate cut is 100%,

The Fed is facing a complicated economic environment, with growth slowing and inflation risks high.

But energy prices have moderated in recent weeks, removing some pressure on prices. But core inflation is still too high for comfort and is expected to move higher still.

Fed : Sees Elevated Inflation

The Fed says "readings on core inflation have been elevated, and the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time, reflecting reduced impetus from energy prices, contained inflation expectations, and the cumulative effects of monetary policy actions and other factors restraining aggregate demand."

FOMC Rate Decision - unchanged

FOMC Rate Decision
Rate unchanged
5.25%

Statement Same

Statement is very similar - not too tough, saying "moderation in economic growth appears to be continuing, partly reflecting a cooling of hsg" and "inflation pressures seem likely to moderate over time" (same language). FOMC says inflation risks remain due to elevated core infl, high resource utilization, & high energy px.Fed reiterates "extent and timing of any additional firming that may be needed to address these risks will depend on evolution of the outlook."

FOMC Rate Decision in Few minutes

FOMC Rate decision in a few minutes (18:15 GMT)
Could bring some noise into Markets.
Stocks about to break higher and the USD looking a bit weakish
The Market is positiioned for a dovish FOMC statement
Expectation 5.25% (unchanged)

FED: Key Parts of Aug 8 FOMC Statement for Comparision of todays

Here are key parts of Aug 8 FOMC statement for comparison:
"Economic growth has moderated from its quite strong pace earlier this year, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices. Readings on core inflation have been elevated in recent months, and the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time, reflecting contained inflation expectations and the cumulative effects of monetary policy actions and other factors restraining aggregate demand. Nonetheless, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation & econ growth, as implied by incoming info."

FOMC - Market Relatively Quiet -

Most markets are relatively quiet, awaiting the FOMC Rate Decision at 18:!5 GMT.
The unanimous expectation is 5.25% (unchanged).
Market reactions will be related to the wording of the Accompanying FOMC Statement

FOMC

Market more or less come to a stand still ahead of FOMC at 18:15 GMT.
This meeting couold finally signal the end of the almost 3 year tightening cycle. As market expect the Fed will hold rates at 5.25%, with a bias towards a dovish tone to the critical Accompanying Statement.
The US Economy has performed as the FED has anticipated, with growth slowing and inflation levels tapering. In this Scenario the Fed will most probably take a wait and see the approaches.

NY Traders pushing Commodities Up

NY Traders, are pushing the commodities price up..
It looks like they seem to be saying "ITS ENOUGH" Now we shall place in new Money.
Traders are positioning there self before FOMC.

NYMEX CRUDE OIL bounce above 100 MA

Nymex crude oil hit $60.61 session low, bouncing just ahead of the 100-week moving average at $60.50

Market get Prepared for FOMC

Market gets prepared for the 13:00 FOMC Minutes.
Everything is in so tight range.
Be Prepared everyone, After FOMC Rate Decision at 18:15 GMT, we shall expect nice movements, clearing the space.
EUR/USD holds nicely since morning above 1.2670
Gold is playing nice above 570
Silver stays at 10.72 - 10.83 range

Crude Oil did a Big fall at around 60.8 Levels, Due to Dollar weakness, we see nice holding in Commodities, however Jewellers in Asian countries, are buying at such low prices, and holding in Stocks, preparing for next month, which is season for Wedding, Eid festival, And numerous Festivals apparently coming ahead, which shall in return help the commodities

Main Call, we dont expect something big in the Statement. FED wont make any Significant changes, It appears Fed will also warn about inflation risks - Any reversal in Energy Prices or less than Expected slowdown in economic growth could quickly reignite inflationary Pressures.

FOREX TECHNICAL LEVELS

USDCHF immediate up-trend intact above 1.2434, Sep 14 low and as such, we anticipate a near-term break of Friday's 1.2625 high will yield an extension towards 1.2736, the 61.8% retracement of the 1.3241 to 1.1919 decline. Intraday support at 1.2485.

GBPUSD has failed to sustain the break of the 1.8906, 61.8% retracement of the 1.9094 to 1.8601 decline. Our focus remains on 1.8710, the low from Sep 13 and gateway to 1.8601, Sep 11 reaction low. A break of 1.8601 would confirm a resumption of the broader decline from 1.9146, Aug 8 trend high.

USDJPY has thus far failed ahead of the key 118.50 key trendline resistance. Initial support lies at 116.99, yesterday's low where a break would pave the way for deeper intraday losses towards the next key support at 115.56, Sep 5 low. On the upside we continue to monitor 118.50 where a successful assault is required to provoke extended gains towards 119.41, Feb 3 peak.

USDCAD the USD has cleared resistance at 1.1245, the 50% retracement of the 1.1460 to 1.1029 decline paving the way for a climb towards 1.1295, the 61.8% retracement. The pair has traded close to this level and a break would suggest potential for 1.1375, Aug 1 low ahead of 1.1460, July 24 high. Look for support to come in at 1.1165, yesterday's low.

AUDUSD maintains a bearish bias following the recent failure to sustain the break of 0.7717 and subsequent loss of 0.7551. This defined an interim high at 0.7721 from Sep 5 and paves the way for renewed weakness beyond last Wednesday's 0.7482 base en route to 0.7442, the 61.8% retracement level of the 0.7269 to 0.7722 advance and ultimately 0.7405, Jul 19 reaction low. Immediate heavy tone dominates below 0.7572, Sep 14 high and approximate 38.2% retracement of the 0.7722 to 0.7482 decline.

EURJPY Stalls At 150.27, Further Weakness Expected

EURCHF maintains a near-term bullish bias above last Thursday's 1.5830 low with current dips seen as a corrective setback. While 1.5830 holds, our focus remains on Friday's 1.5970 high and the psychological 1.6000 level thereafter.

EURJPY having rejected the 150.75 trend high from Aug 31, yesterday's sell-off from 150.27 is now pressuring Monday's 148.20 low. Failure to maintain a foothold above this level would trigger a deeper setback towards 147.55, Sep 8 reaction low.

EURGBP remains vulnerable near-term below yesterday's 0.6766 high, having stalled ahead of the 0.6831 level. Here Aug 21's reaction high coincided with the 61.8% retracement of the 0.6865 to 0.6720 decline. Accordingly, the focus is now back on major support at the 0.6720 double bottom - the gateway to 0.6704, Nov 10, 2005 base and ultimately 0.6610, Jun 23 base

Latest Data Supporting for FED PAUSE

USD Tight range ahead of FOMC: The dollar range traded against the euro but softened versus the yen ahead of today's FOMC meeting.
EURUSD traded a tight 1.2666 - 1.2691 range, while USDJPY shrugged off political concerns in South East Asia and a plummeting Nikkei, drifting lower to trade a 117.67 - 117.20 range.

Another weak US housing number appears largely responsible for overnight price action ahead of today Fed meeting. Indeed August's 6% housing start slump to 1.655 mln (well below market consensus of 1.75 mln), when combined with yesterday's fall in core goods PPI, will likely prove more than sufficient to keeps Fed hawks at bay until at least the middle of next month.

More confident FOMC language today: With latest data supporting the Fed's pause, the language of today's FOMC should be slightly more confident that rates will be kept on hold for now.
Thus despite recent softness, we continue to favour a range-break to the topside in EURUSD in the relatively near-term as the USD carry advantage continues to erode steadily, and we suspect financing conditions will become less favorable in the weeks ahead.

The FOMC meets at 1300 GMT, decision expected to be announced at 1815 GMT.

Heavy New Money flowing in Commodities

Heavy New Money flowing in Commodities, Pushing the Gold and Silver price Slightly Up.
It appeared as yesterday it was Traders getting there Account ready for todays FOMC.
However, it appears we could see a rise in gold, as far as it stays above 570.
Crude Oil Pushed slightly higher
As well as USD weakness is Helping COmmodities.
Main Focus today FOMC

FOREX: USDTHB

There are some Bangkok and regional Sellers above 37.80

NYMEX Crude Oil Futures

NYMEX October light sweet crude oil futures settled at $61.66 perbarrel, down from Monday's settlement at $63.80 and Friday's settlement at $63.33. The persistant close below the 55 week moving average (around $66.40-45) suggests market players may yet be caught holding long positions.

Commodities continue to flirt in Range Bound trading

Commodities continue to Flirt in range Bound trading before FOMC.
Gold went up 588 levels, And then bounded back at 572 (Mantaining its Position to stay above 570)
Its playing range Bound for the moment, As well as Silver which went at 11.18 levels and then trading right now around 10.77.
We could expect an end to this range bound trading After FOMC meeting. Which shall open the gaps as mentioned earlier.
We shall keep sharp attention to there Statements as well.

Thailand Crisis - Armed forces seize power

The Thai Armed forces have seized power in a bloodless coup, dismissing PM Thaksins government, revoked the constitution and promised a swift return to democracy after political reform.
A Coup Spokesman said Thaksin was being removed to resolve a nearly year-long political deadlock and stop "rampant corruption".

Crude Oil Pushed Lower heavily

Due to Crude Oil Dropping very Quickly, as President Bush gave speech of ending the ongoing dispute with Iran via Diplomacy, which also pushed the Commodities down.
Also traders are taking money out right now, to get prepared for FOMC tommorrow, where things shall clear.
Gold Standing above $570 is the Important key for the moment.

Gold Update

Gold take a Dip,
It appears Traders are booking profits, and getting ready for tommorrows FOMC.
However there is Crisis going on in Thailand, Commodities being Safe-Haven Buying Opportunity Currently, Traders are mainly focusing on Dollar and tommorrows FOMC, And setting there positions for the moment.
As Long as we see it above 570, We shall see reverse soon back to 580+

Dollar - Weak

Dollar is weak
Helping EUR/USD, Commodities.
We are seeing Heavy Volume being traded today comparable to yesterday.
It appears we could see Gold touch above 590, if such Momentum carries on.

Data reaction -

We shall give market 30 Minutes Atleast, to digest the Data.
However, it Appears USD weakness in the boards, Which shall help Commodities
Treasuries did rally up, Bunds also went higher.

Economic Data

Todays Economic Data is Important,
Considerablly Housing Starts is one of the Important
Housing starts data has a strong effect on the bond market and predictions for interest rate movementsAs interest rates rise it is expected that housing starts will decline.

The PPI is another important indicator which investors pay close attention to. It is not as strong as the CPI in detecting inflation, but because it includes goods being produced it is often a forecast of future CPI releases

US Economic Datas today

At 12:30 GMT we have few Important Datas coming out

PPI MoM - Expected - 0.3%
PPI Ex. Food & Energy MoM - Expected - 0.2%
Housing Starts - Expected - 1746K
Building Permits - Expected - 1740K

FOREX TECHNICAL LEVELS

USDCHF pulled back from Friday's 1.2625 new trend high, but would have to knock out the 1.2434 reaction low from last Thursday to offset overall bullish pressures. Keep in mind that there's little resistance above 1.2625 till 1.2764, the .618 retracement of the 1.3287-1.1919 decline.

GBPUSD recent setback from Thursday's 1.8920 resistance has so far stalled in front of the 1.8710 small reaction low from last Tuesday. Only a break there would open the door toward the 1.8601 Sep 11 low.

USDJPY has solid support at 117.26, and as long as it holds, we must consider the short-term bull trend intact. Above the current 118.30 trend high and 118.50 trendline barrier, the next resistance is the 118.90 Apr 11 reaction high.

USDCAD maintain its weeklong 1.1238 to 1.1119 trading range on Monday. Look for a breakout from this band to establish a trend.

AUDUSD is hovering below resistance from last Thursday's 0.7572 high. Nearby is the 38.2% retracement of the 0.7722-0.7482 decline. Only a move above this area would shift trend focus from support at the Sep 12 0.7482 low, followed by 0.7442, the .618 retracement of the 0.7269-0.7722 rise.

EUR/USD Recovered very Nicely

EURUSD posted a noteworthy recovery from the 1.2630 small double bottom support on Monday, but only a move above the 1.2755 reaction high from last Thursday would shift our focus away from the 1.2570 support. This level marks the 76.4% retracement of the 1.2456-1.2941 rise.

However Traders have focus on Housing Starts on Tuesday and also FOMC on 20th, which opens a clear picture

Gold Update

As we analyzed earlier.
Gold mantained a solid Long term Triangle above 570.
And we are seeing a solid Push as we speak.
We are looking for a nice Push Upwards. But sit tight still

Gold Update

Gold has been trading in the Asia and Europe Morning at above 580+
Now trades little below 580 level, However, for the moment we shall give Gold sometime to slowly mantain the push, However the sell off currently looks eased up, as a slow momentum of push upwards is likely developing, And Holding above 570 is a Key for the moment.
For the moment Market waits for US Housing Starts on 19th and FOMC meeting on 20th.
We shall soon be seeing Physical Buying in Asian Countries, in the month of Ramadam, where mostly people do Physical Gold buying, and Eid to come, is a Key Physical Buying time.

The Main Part this week plays FOMC, clearing that, opens path for many ways.

Forex Update - USD

Focus shifts to FOMC, USDJPY and EURJPY initially pushed lower this morning in response to a number of comments by European officials after the G7 meeting that the JPY was too weak relative to Japan's recovery.

Also Japan Finance Minister Tanigaki's conceded that the JPY could probably strengthen as the economy improved further.

USDJPY traded to a low of 117.15 but the move not sustained and has subsequently squeezed back up to around 117.70 levels. Our interpretation of the developments on the weekend were if anything slightly bullish at the margin for the USD and bearish for the JPY given that CNY was less of an issue and also that BOJ Fukui maintained a very dovish stance.

After all, at the end of the day it is yield differentials that are driving the JPY. The text on the FX markets in the main body of the communique was identical to the April Statement.

However, there was no appendix this time and hence no explicit call for an appreciation of CNY, but rather a call for greater flexibility so that "necessary adjustments" can occur. Of the comments that came out from the various officials following the meeting, most notable was the dovish stance of BOJ Governor Fukui and the desire by European officials to talk down EURJPY.

BOJ Governor Fukui said that the G7 understood that the BOJ was in no hurry to lift rates and that there was no criticism of Japanese monetary policy at the meeting.

Meanwhile, European officials said that the JPY should reflect Japan's exit from zero inflation and overall recovery, while Japan's Finance Minister Tanigaki conceded that the move in EURJPY had been "abrupt".

Finally Treasury Secretary Paulson's took a muted approach, warning that protectionist measures were a threat to global growth, and said that he did not have a specific target for CNY.

The focus will quickly shift to this week's FOMC meeting on Wednesday. The market is now pricing no chance of a Fed hike and we expect the statement to remain largely unchanged from last time, in line with recent Fed comments. This should do little to bolster expectations for renewed tightening later in the year, leaving the USD vulnerable to eroding carry advantage, even though the weekend's events have not provided a catalyst for a weaker USD.

The TIC portfolio report for July is due at 1300 GMT and the market expects inflows of US$70 bln, versus US$75.1 bln in June.

Gold Demand

As market updates comes, we hear there is a very Strong Indian Physical Demand going on this Morning for Gold.

Gold Update

Gold Stays Above the Triangle as we mentioned last week.,
Which sounds a good Signal.
Staying it above 570 is Favourable.
In Asia Gold mantains above 580
We shall see the reaction in Europe and NY.
With some little Datas today, we wont expect much, as many Eye for 20th Septemeber for FOMC, which is a Main Key to focus this week
Which clears Path, and opens a new room of direction for currencies, commodities and other Trading Instruments.

A Nice Long term Triangle forming

570 - 574 we targetted earlier, But didnt expect NY would give a Drop Down Push, However NY liquidity Power remains Solid among Asian side, Asia was moving the prices nicely upwards, looks like Asia wants to push price up, but NY falls it down, We shall see today the reaction from NY.

If you see a Nice long term Triangle Forming, which is Wonderful.

And as we mentioned we will see Range Bound trading, it appears the same currently.

Next week FOMC away from the Path, Opens the roads and channels for a Nice drive upwards.

We shall see how Europe and NY reacts, and focusing on Datas today.

FOREX TECHNICAL LEVELS

EURUSD extended its tight range for the week, but not by much. After violation of Monday's 1.2744 high, nearby resistance from Sep 1's 1.2755 low and Sep 7's 1.2759 reaction high stymied the recovery from 1.2665. Only a move above this area would offset the downward pressure and shift focus away from 1.2641, the .618 retracement of the 1.2456-1.2941 rise.

USDCHF saw a lot of news-inspired volatility this week, but so far, it's holding above support in the 1.2394 area. Only a break of this reaction low from Monday would mark a departure from the 1.2228 bull channel, shifting focus away from the 1.2597 Jul 19 high.

GBPUSD recovery from Monday's 1.8601 low punched through mild resistance in the 1.8784 to 1.8789 area but ran out of steam after violating 1.8906, the 61.8% retracement of the 1.9094-1.8601 decline. Secondary resistance is in the 1.8978 area. Penetration of Tuesday's 1.8775 high would give us confirmation of a reversal to the downside.

USDJPY continues to consolidate the new trend high at 118.16, holding well above support the Sep 11 116.60 reaction low support. There's little in the way of significant resistance above the current 118.16 trend high till trendline resistance in the 118.50 region and then the 118.90 Apr 11 reaction high.

USDCAD violated mild support from Tuesday's 1.1156 reaction low, but stopped just ten pips from Fibonacci support, the .618 retracement of the 1.1043 to 1.1238 rise at 1.1109. The notable recovery from 1.1119 would have to move above Wednesday's 1.1238 high though to bring back focus to the upside. Even then, the nearby 1.127 reaction high from Aug 18 will likely prove a tough obstacle to cross.

AUDUSD poked above congestion resistance in the 0.7543 to 0.7551 area, shifting focus away from 0.7440, the 61.8% retracement of the 0.7269-0.7717 rise, at least temporarily. The next mild resistance is 0.7574, the 38.2% retracement of the 0.7722-0.7482 decline, followed by the 61.8% retracement at 0.7630. Only a break of the 0.7482 trend low would reinstate the bear trend.

A Huge DIP in Commodities on Thursday

We saw a Huge Drop in Gold on Thursday, And it touch 574 levels, As we Targeted Earlier, However the trading Session in Asia was Much more appealing then in NY.
It appears 574 is the Boundary of the range Bound trading, And as mentioned earlier we could expect it till Friday.
However USD maintained weakness on the boards, Considerably a huge dip in Commodities today.
Few Heavy Datas coming up today, Which shall Effect the Commodities in return and towards USD.
We keep a Tight Eye on Gold and Silver at present.
Next week shall be an Appealing time to trade, where FOMC meeting comes in, And clears the Path.

Gold clears 593

Gold Managed to cross 593.
We shall give it some time to Stand Above it, And will focus on $600 Level.
As we mentioned earlier in morning, Be Prepared, looks like signs are Appearing for a Reverse.
We shall see how NY Market reacts today.

Gold Performs nicely

Gold is performing very nicely on its 2nd Day Showing a Bull Bar, We assume such Gradual Push shall remain today during the US Data release.
Gold first clearance should be 593 levels
2nd Resistance it should clear is 600-602
Which can form a nice Bullish Pattern.

Interesting Economic Datas to come out today

After 3 days we do have very Interesting Economic Data coming out today.

European Zone
9:00 GMT - Labour Costs YoY - Expected 2.3%

US

12:30 GMT - Import Prices MoM - Expected 0.3%
12:30 GMT - Advance Retails Sales - Expected -0.2%
12:30 GMT - Initial Jobless Claims - Expected 315K
12:30 GMT - Continuing Claims - Expected 2495K

14:00 GMT - Business Inventories - Expected 0.5%


All of the Above are Considered Main, and shall move the USD in Up or Down Direction.
Which in result shall effect Precious Metals and Currencies.

Silver - Looks a Good Buying Opportunity

Its a Good Opportunity to get Long in Silver, And Hold it
Only buy if you have good Holding Power
Silver remains at 200 MA and trading in Ranges as it did in JULY.
We will definately see Reverse Soon, As the technical Picture steadly gives Slight Bullish Pattern Forming.

And it Appears when we see a Reversal soon, we could get it lead up towards $15+ very soon.

FOREX TECHNICAL LEVELS

EURUSD has maintained a tight range this week so far, consolidating the sharp decline last week. This consolidation is hovering just above the 61.8% retracement of the 1.2456 to 1.2941 rally at 1.2641, a break of which would open the door toward the 76.4% retracement at 1.2570. Only a move above last Thursday's 1.2759 reaction high would offset broader downward pressures.

USDCHF consolidated Tuesday's rally to new trend highs, but held well above important support at Monday's 1.2394 reaction low. Only a break there would put the bull channel from 1.2228 on hold. So until then, keep focus on the 1.2597 Jul 19 high.

GBPUSD slowed in its corrective recovery from 1.8601, stalled by the 1.8784 reaction high from last Thursday and the nearby Fibonacci retracement at 1.8789, the .382 retracement of the 1.9094-1.8601 decline. Only a move above there would shift focus away from support at 1.8493, the 61.8% of the 1.8090-1.9146 rise.

USDJPY consolidated Tuesday's push above the Jul 19 117.89 high, holding well above support the Sep 11 116.60 reaction low support. There's little in the way of significant resistance above the current 118.16 trend high till the 118.90 Apr 11 reaction high, followed by other reaction highs at 119.21 and 119.41, from Mar 13 and Feb 2, respectively.

USDCAD maintains a slight upward bias in the near run, keeping focus on resistance at 1.1275, a reaction high from Aug 18. Not far off is 1.1295, the .618 retracement of the 1.1460-1.1029 decline. Mild support is around 1.1141, a previous high and former breakout point.

AUDUSD is consolidating its recent selloff from 0.7722, but holding below congestion in the 0.7543 to 0.7551 area. Only a move above there would likely spark a notable relief rally, shifting focus away from 0.7440, the 61.8% retracement of the 0.7269-0.7717 rise.

Gold - Chances Of reverse Very Soon. Be Prepared!!

Gold gave a nice Push today (Wednesday) And brought the price at 589 Levels.
After 5 day Continous Down Fall, We saw the charts with a Bright Green Bar :)
It Appears that 579 is a very Important Zone, crossing that we will eye for 574 or even Meeting the Old 200 MA level which was 543.

However, looking for the moment, We see USD weakness starting to appear, Also Crude Oil Mantained a Slight Push today, Which indeed supported Precious Metals.

For the moment, we shall Expect Range Bound trading, as we have seen in April 2006 and June 2006.
Crossing 593 and 600, Clears the Primary Resistance zone, And Indicates Slightly for a reversal Pattern to develop.

Next week, shall be an Important week for all, Where FOMC makes a Decision of whether a Hike or Pause,
Now right now Market wants them to Hike, Economists have Expected for the No Hike.
In our view we expect for No Hike to be seen.

However, we shall see next week what decision they Comply with.
Next week shall be Considered as Important, where everything Might go crazy on the Boards.
SO YOU SHOULD BE PREPARED.

In precious Metals, what we expect is Same range bound till Friday, A Big Gap shall open Next week, Helping the Metals for a Nice steady rise.
Once a Reversal Appears, We might call for 730 Again in the Books.
Reasons, Much Money will start to flow again in the Precious Metals Market, Everyone is Back home after Vacations, wedding festive, Physical Buying will solidify, Dollar shall weaknen, And various other factors which shall Boost the Precious Metals in a STEADY Manner.

ONCE AGAIN BE PREPARED EVEN FOR ANY DOWNFALL OR A RISE, YOU SHOULD BE READY, AND HAVE GOOD HOLDING ACCOUNT POWER.
BUT AS THINGS APPEARS, we are looking for a Push Soon. Traders are really tired for this DownFall, A Big Dip considered, But Healthy for long term - DEFINATELY.

Gold - We shall soon see Reversal.

Gold got rejected at 579 level, which was a Key Zone. It appears we are looking for reversal soon, We could see a Range Bound trading till friday, And next week looks to be much more brighter.
Only Buy at current prices, if you have good Holding, Buy Small, Mantain Positions.
At the moment how it is looking that we might see Gold moving High soon, as dollar is eventually turning to South Again, Getting Weaker.

EUR/USD Update

Gets a pop above $1.2690 as Reuters reports Ukraine CB head as saying it is necessary for that country to lift the euro share of its reserves.

NYMEX Crude Oil Technical Levels

NYMEX LIGHT SWEET CRUDE TECHS: Trend Support Line At $59.60 Eyed

RES 4: $68.85 Daily high 6 Sept
RES 3: $67.60 Daily high 8 Sept
RES 2: $66.45/50 Daily highs 11, 12 Sept
RES 1: $65.45 5-day moving average

SUP 1: $63.50 76.4% of $80.37-$58.30
SUP 2: $62.95 Daily low 15 Feb 2006
SUP 3: $61.87 Daily low 23 Mar
SUP 4: $59.60 Trend support line from Sept 2003

Oct has so far found support at $63.50 -- the 76.4% of the $80.37-$58.30 move. However, risks remain skewed lower to $61.87 and nothing really significant until $59.60, which is the Mar 21 low on continuation charts and also value of a trend line from Sept 2003.

Gold rejects at around 579

Gold gave the rejection feeling at around 579.
Right now trading at 582+

Gold saw a Continous 5 day Bearish Drop

579 level is important crossing that would lead further losses

FOREX UPDATE - GBP

UK August inflation has come in firmer than expected, with CPI reported rising at a 2.5% y/y rate vs. consensus expectations for an unchanged 2.4% rate.
The result has pushed the short sterling curve higher, with the March '07 implied yield rising 6 bp.
The curve is now pricing risk of two rate hikes by year-end, one more than we think is likely, and EURGBP has sold off sharply back below 0.68. We continue to target the cross at 0.6750 on a 1-month basis but would be cautious about looking for further downside, particularly with ECB expectations continuing to grind higher on quite hawkish comments from Board Member Garganas, who called current monetary conditions still very accommodative.

Gold looks to head for 574

It appears gold is heading towards 574 level.

Gold could be range bound trading this week.

Gold is having hard time to rise upwards for the moment.
Every day its facing a Big Bearish Bar in charts, forming heavy bearish channel.
It looks like Congestion is being developed little above $580 levels
Holding this level again today, shall develope same congestion zone as we In Jun 20 to 27,
Where it played in Congestion zone at 570 - 590 levels for few days, and then rallied upwards.
It appears as that this week could be RANGE Bound trading for Gold.

Gold touches 582

Gold touches 582.
It appears that we could see 574 as mentioned earlier.
However, we saw few Big Japan names selling Gold early in Asia Morning.
Gold Sticks above $580, where congestion level is,
Eur/usd signals of slight USD strength, And as appears across the board.
Silver has dropped Heavily As well towards 10.95 levels.
It shall be a nice grab of few OZ of Silver right now,
And as always Mantain Solid Holding Power.

Fed Yellen Speaking in Emeryville

19:35 we currently have Fed Yellen Speaking in Emeryville.
She reiterates her Sept 7 speech in "similar remarks" that US Economy is Slowing is underway and inflation rate should fall.
Fed Pause was Prudent.

FUTURES : Grain, Wheat, Corn Update

Grains Closed sharply lower, after todays trading session market came off and closed lower.
December wheat closed just above support at 400.25, down 10.5.
December Corn broke Major support at 238 and finally closed at 237.75, down 5.75

Gold Visited 586 Levels again

Gold Visited 586 Levels Again,
We hope it gives a boost on Wednesday, It tried today as well to clear 600, But failed to do so.
Its playing the Same way as EUR/USD where we see good Amount of offers at 1.2675 levels and 1.2730 levels
In Gold we see good amount of offers at 600, Bringing it back down, And 583 levels Offers present bringing it back up.

The Main Key right now is Dollar Strength, And Since Heavy CrudeOil Fall, has Failed the Charm of strength in Commodities as well.
We saw $13 last week in Silver, today we see 10.98 levels, so its a Huge Drop
Gold was 640's last week, today we see it 580, which is In correlation to Huge Crude Oil Fall, Dollar Strength, GeoPolitical Tension Easing - Iran and Eu.

Today there was also a Syrian Attack, but Which didnt help boost any of the prices nor in Energy and COmmodities,
Crude Oil touched one of the lowest today settling at $63.70/-

Dollar is Gaining, As Investors Adjustiing Positions

The dollar continues to strengthen across the board, making its biggest moves against its European counterparts as investors engage in technical trading. A wider-than-expected U.S. trade deficit has done little to dampen the greenback as investors pushed the euro to a fresh intra-day low at $1.2673 while the dollar rallied to CHF1.2498 in morning trading. .

The dollar was at Y117.74 from Y117.55, while the euro was at Y149.36 from Y149.29.
The dollar was trading at CHF1.2485 from CHF1.2448 Monday, while sterling was fetching $1.8734 from $1.8648

14:00 GMT Data - IBD/TIPP Econ

At 14:00 GMT we have Sep IBD/TIPP econ optimism, was 45.6 in Aug.

WTI Oil Update

WTI OIL in a one dollar range trading between $65-66.40, if broken down the $64 area should stop the decline for now.

EUR/USD Update

Eur/usd is trapped - odd moves and small gaps after the Trade Balance first saw a high above 1.2730 and then a dip below 1.2690.
It appears fairly large orders are on both sides at the levels mentioned - at least for the time being.

EUR/USD

Slips to $1.2680 area but not a lot of volume on the dip back under $1.2700, high prints seen at $1.2740 but that may have been a mishit, . Nonetheless, "$1.2750 held and if euro can't go up on that data then...sell it," .

Dollar Slips after trade report

Dollar slips on the record wide trade report and stock futures hold steady around flat. Tsys steady.
Weak Dollar shall help Gold and Silver, And emerge little buying interest in sch Low prices.

Data Figures Coming out in 10 Minutes

US And CA Figures coming out in 10 Minutes.
US Trade Balance (JUL) -$65.5B Expected,
Canadian New Housing Prices Index (Jul) mom 1.0% Exp
Canadian Int'l Merchandise Trade (Jul) C$4.9 exp

Gold Plays around same levels

Gold still at 595-596 levels
Tried to clear $600, but was un-successfull.
A weaker dollar shall give it a nice boost,
Gold should clear $600 current Resistance and focus for $615 - primary resistance, to get it out of its way, or we could test $574 Levels, if such levels arent crosssed.

Today we have Trade Balance (US) coming out at 12:30 GMT

WTI Oil Update

WTI Oil testing resistance at 66.40 without success, if it it not broken up quickly on the US opening we might test yesterdays lows again at 65.20

Exchange Traded Fund News

Claymore Investments has launched three Canadian Exchange Traded Funds:

The Claymore BRIC ETF

Symbol: CBQ
Exchange: TSX
Dividends: Paid quarterly
MER: 0.60%
Number of securities: 75
Index: Tracks an index consisting of stocks from Brazil, Russia, India and China
Country breakdown (As of August 31st 2006)
Country Percent
Brazil 48.55
China 31.28
India 13.95
Russia 6.21

The Claymore U.S. Fundamental Index ETF Cdn Dollar Hedged

Symbol: CLU
Exchange: TSX
Dividend yield: 2.15%
Number of securities: 992
MER: 0.65%
Security selection: Based on four factors:
Total cash dividends
Free cash flow
Total sales
Book equity value.

The Claymore Cdn. Dividend & Income Achievers ETF

Symbol: CDZ
Exchange: TSX
Dividend yield: 4.95%
Number of securities: 57
MER: 0.60%
Largest holdings
Stock Weight (September 8th) %
Royal Bank 3.01
Rothmans 2.46
Bank of Nova Scotia 2.45
BCE 2.32
Encana 2.29
Manulife 2.29
Toronto Dominion 2.16
Emera 2.09
Bank of Montreal 1.96
Commerce Bank 1.71
Top Sectors
Sector Weight (September 8th) %
Financials 43.08
Energy 16.58
Industrials 9.48
Consumer Staples 8.92
Utilities 6.11
Consumer Discretion 4.85
Materials 4.81
Telecommunications 3.50
Information Tech 0.99
Funds 0.97

Additional information on Claymore ETFs is available at www.claymoreinvestments.ca

Forex Update - USD

The US dollar strengthened across the board overnight, with the pro-growth currencies AUD, CAD, NZD and JPY all taking a hit.

Equity markets were flat overnight, but we suspect that global growth expectations have suffered in light of yesterday's soft machinery orders in Japan.
A shift in yield differentials can explain the rise in USDJPY, with Japanese 2 and 10-year yields down by a hefty 7 and 6 bp respectively, while US 2 and 10-year yields rose by 2 and 3 bp.

Fed President Poole (a non-voter) described the economy as "robust" rather than "fragile", although he did concede that the economy could have a "weak quarter or two".

Paulson's speech on Wednesday could be quite key in assessing the significance of this weekend's G7 and IMFC deliberations. At this stage it would be fair to say that despite his extensive background in dealing with China, the market is not clear on how actively he intends to push currency reform, and we would concede that there is possibility of disappointment on this front.

The other big event for this month (and opportunity for disappointment) is the Schumer-Graham bill, with Schumer quoted in the wires as saying that he is "very serious" about forcing a vote this month on the bill.

Trade balance for July is due at 1230 GMT and the market forecasts a widening in the trade deficit to US$65.5 bln versus US$64.4 bln in June.

G-7 Talks

According to Kyodo News, the G-7 will call for 'vigilants' against inflation citing a draft of the G-7 statement. However, the draft had no mention on FX, as widely expected.
There was no statement how the news Agency obtained an advanced draft of the document, so reliability should be questioned.

Market talk

Interesting comments from Minehan, at least suggesting that the Fed will be reluctant to cut rates going forward.

US Trade Balance figures out today. Is the market getting used to a big deficit? The surprise side might be being long USD over the figures.

Watch commodity related shares today, as commodity markets migth be in for a rebound

Crude Oil Futures Update

Crude Oil still trading below $66.30 resistance, but under the broad metal sell –off yesterday Oil was quiet resilient and could have found a short term base around $64.50/65.

It could be Buying Chance either close to $65 area or on a significant break above $66.30 bear channel for a test of $67.50/70

Syrian : Attack on US Embassy in Damascus

Attack on US Embassy in Damascus "Terrorist operation" - Syrian Interior Minister

Gold tries clearing $600 Resistance

Gold hit 599 level, and bounced back down.
As we mentioned earlier $600 level is Resistance zone.
Until we dont clear it, we still look for Bearish Channel

Japan Finance Minister Comments

Japans Finance Minister Tanigaki Says that Currencies will be discussed at G7 meeting on Sep16, but he has no present idea of what currency will be in Focus

Precious Metals Update

It looks we could see a Buying Pressure today in Gold and Silver

Gold Up $3 in Asia Trading 591.60
Silver up $0.1650 in Asia Trading 11.2425

Sit tight, Until we dont clear $600 (Near term Resistance) and $615 (Primary Resistance) we still look for Bearish Channel.

FOREX TECHNICAL LEVELS

EURUSD briefly extended declines early Monday, fizzling just in front of the 1.2641 Fibonacci support. This level marked the 61.8% retracement of the 1.2456-1.2941 rise. The recovery from 1.2647 fell short of even mild resistance at 1.2759, a small reaction high from last Thursday. Only a move above this area would relieve recent downward pressure.

USDCHF consolidated gains within the bull channel from 1.2183. Further corrective pressures are possible, but only a break of the small reaction low from last Monday at 1.2327 would shift focus away from the 1.2548 Jul 25 reaction high.

GBPUSD remains heavy after violating yet another support, 1.8618-the 50% retracement of the 1.8090-1.9146 rise. Only a move above last Thursday's 1.8784 small reaction high would shift focus away from the 61.8% support at 1.8493.

USDJPY showed signs of life after moving above the 117.51 Aug 31 notable high, but there's an even more important one at 117.89, the trend high from Jul 19. Penetration there would leave little in the way of resistance till the 118.90 Apr 11 reaction high. Only a break of Monday's 116.60 low would relieve upside pressures.

USDCAD keeps its upward focus on resistance at 1.1275, a reaction high from Aug 18. Not far off is 1.1295, the .618 retracement of the 1.1460-1.1029 decline. Mild support is around 1.1141, a previous high and former breakout point.

AUDUSD remained heavy after last week's late break of the Aug 25 reaction low at 0.7551. Penetration there has the door toward the 0.7440 Fibonacci retracement, marking the 61.8% retracement of the 0.7269-0.7717 rise. Mild resistance is at 0.7607, a small reaction high from last Thursday

Crude Oil Continues to go lower

Crude Continues Lower today, Posting losses of $0.70 (-1.05%)
Crude Oil now has reached Major Support at $65.50.
All Eyes will be on this Level as a Break here will leave Crude in Danger of Extreme Losses.

Which could in relation effect Precious Metals as well.

Reports come, Bank of Portugal Sold 20 Tonnes Gold.

As Reports come that Bank of Portugal says it has sold 20 tonnes of gold. Shiny metal, not so shiny on the day, is trading at $592.00, up from lows around $583.50

New Longs Slowly Developing

New Longs are being Developed for Gold and Silver,
After Mantaining the Support. It looks as Tuesday we shall see Push Upwards.

Little Support Being Build just above $580/-

Little Support being Build just above $580.
But it still isnt Much Satisfying, Not considering a Solid Support.

Technically Everything is Over Sold, And Buying interests might Emerge on Tuesday/Wednesday, today (Monday) its All Selling happening everywhere.

Gold now in Congestion Zone

Gold comes in to Congestion Zone 580 Levels.
New longs should develop soon.
Crossing 580 will head it to 570 Another Congestion Zone, Where it should Appear new Longs.

Currently It looks like everyone is Short selling, Looks like an Old Monday when we had a Big dip from 730 to 541.

We Eye for 574 levels, And hope for fresh Longs to begin Tuesday/Wednesday.

Today it looks like force of Short Selling appearing.

Gold Crosses 200 MA -

Gold Crosses 200MA, Terrible Market today.
It looks like we would be heading for 570/580 Congestion zone
Or could meet 543 Levels Again.
GeoPolitical Tensions Eased, and a Sharp Fall back in Commodities is a Suprise for all.
Certainly very Terrible Market today. A Straight Dip.

Both Gold and Silver Punished as they push down Below 593 for Gold and 11.50 for Silver.
As we mentioned we could see 11.360 for Silver.
Gold looks like hearding 570-580 level.

Silver Trading OutLook

Having failed to sustain the break of the 15.240 to 9.470 decline at 13.036, Silver has now violated trend-line support at 11.940 originating from mid-Jun and Aug 11's 11.750 base.

With momentum continuing to provide a bearish backdrop, the move down defines Sep 5's 13.250 high as an interim top, while paving the way for extended weakness beyond today's 11.675 low en route to 11.360, the 50% retracement of the 9.470 to 13.250 advance.

Near-term resistance cuts in at today's 12.060 high ahead of last Friday's 12.670 peak, but it would take a recovery beyond 13.250 to relieve the broader bearish threat.

Maintain a near-term bearish bias below 12.670, looking for extended downside towards 11.360.

NY Spot gold opened

NY Gold Spot Market Opened.
Buying interests emerging, We shall see Gradual Slow Push upwards.

EUR/USD trades nicely, shows signs for a Weaking dollar, Nice for Precious Metals.

Gold Hits 593

Gold hits 593 - 200MA,
Market await for NY to open for New Buying interests.
The current low price, shall be welcomed by the NY traders, to boost the Buying.

Crossing $600, shall raise it towards $610 - 615

Currently Gold is totally over sold, And chances for a rise very soon.

EUR/USD Moves up from 1.27 levels

Eur/Usd is being supported by an Interview with Jurgen Stark (ECB) where he indicated the market was correct to expect a rate hike in October.

Gold Clears $600 - Eyes at $593

Gold cleared $600
And faces towards $593 - 200MA
We also hear some reports from Asia Side, that due to heavy Stop-Loss Liqudiation from Japenese Names, it faced a Heavy drop, who were caught limit-down and trapped long on Friday.
It appears as NY and European Traders, will highly welcome this Price as New Buying Pressure, And can see a Reverse in the Prices soon.

Gold tries clearing $600

Gold Tries Clearing $600, reaches 599 and moves little up,
We shall see $593 Touched which is 200MA, As its now very near, And looking Past, we did see Gold touching 200MA, and then rides up way again.
Looks like Asian Traders have already planned to push gold down towards 200MA,
So European and NY traders Emerge Buying interest and they push back up