Gold futures on the COMEX Division of the New York Merc marked a strong rebound Wednesday, settling at another record, as the US Federal Reserve announced it will keep the Key interest rate a low level for an "extended period."
The most active Gold contract for June delivery rose 13.6, or 0.9%, to 1,517.1 oz.
The Federal Reserve's Federal Open Market Committee Wednesday left its Key interest rate at the historically low range of 0.25 to Zero and said its US$600B+ of T-Bond buying program would continue through June.
This move is all about the USD, as the US Fed's action further weakened the value of "Buck", helping to strengthen the appeal of Gold.
The Dollar Index traded at 73.612, the lowest since December 2009 Wednesday, down from 73.789 in late Tuesday.
Traders said the continued easing policy could further deteriorate inflation situation around the World, which also gave Gold a further push.
Silver for May delivery gained 0.908, or 2%, to 45.958 oz. and July Platinum rose 13.8, or 0.8%, to 1,819.2.
Crude Oil's price dipped in early trading Wednesday after a report showed US Crude Oil inventory rose last week. T
he Energy Information Agency said US inventories of Crude Oil increased by 6.2M bbls during the week ended April 22. The climbing inventory hurt the Oil price.
As the US Federal Reserve concluded its 2-day monetary policy meeting Wednesday, making no changes to its current loose monetary policy, Crude Oil reversed its earlier losses.
WTI Crude Oil in New York Wednesday added 0.55 to 112.76 bbl.
In London, Brent Crude for June delivery last traded at 124 bbl.
The EUR/USD Bull Flag
EUR/USD: the Bull Flag breakout projects to Key 1.5150 resistance, the 0.786 fibo level and November 2010 highs, + the hourly Bull Flag breakout in early NY trading projects to the 1.4900 mark which may be a viable short term target for continued EUR/USD strength. But, a counter-cyclical consolidation pattern breakouts have defined and confirmed continuations in the sharp EUR/USD ascent, waiting for similar upside confirmation may be a more appropriate approach now.
In the Short-Term to Medium Term
As we enter the US session to end this week, the EUR/USD is in what appears to be a flat correction. After resolving this, the market has a chance to rally to the Y 2009 high at 1.5140.
The resistance at 1.4520 has proven significant, so a break above signals a Bullish continuation. This is the development Bulls will be watching for.
The RSI should clear 60 and tag 70 in this Bullish continuation scenario.
The count so far should be in an (e) wave of a 5-wave (a)(b)(c)(d)(e) correction.
The daily pattern shows the swing projection to 1.52, and the Y 2009 high as a target at 1.5140.
The Downside opens with a clear break below 1.4350. If that happens, I look of a decline towards the 1.4250-1.4280 Zone. A break there threatens to test the 1.40-1.4050 support Zone. Stay tuned...
The Overall Technical Outlook
Comex Gold (GC)
Gold continues to consolidate below 1518.6 short term top and intra-day bias remains Neutral in here. Another fall might be seen as the consolidation continues but any downside should be contained by 38.2% retracement of 1410.1 to 1518.6 at 1477.2 and then bring on a rally resumption.
Sustained trading above 1518.6 targets 161.8% projection of 1309.1 to 1445.7 from 1380.7 at 1601.7 next, which is close to 1600 psych mark.
The Big Picture: Gold's long term up-trend is in progress, and regaining momentum. That said I am staying Bullish as long as 1445.7, Key support holds, and expect the current up-trend to target 100% projection of 1155.6 to 1432.5 from 1309.1 at 1586.
I will be alert for a Key reversal signal around 1600 as Gold will likely meet medium term channel resistance there. Stay tuned...
Comex Silver (SI)
Silver continues to consolidate below 49.82, a short term Top. A deeper retreat might be seen but I now expect strong support at the 38.2% retracement of 33.565 to 49.82 at 43.61 to contain any downside and bring on a rally resumption.
A clear break of 49.82 should send Silver through 50, the psych level, towards 200% projection of 17.735 to 31.275 from 26.30 at 53.38 next.
The Big Picture: the long term up-trend in Silver is in progress and accelerating. This rally will likely extend through 50, the psych level, to the next long term projection target of 261.8% projection of 4.01, the Y 2001 low, to 21.44, the Y 2008 high from 8.4, the Y 2008 low at 54.03.
On the Downside: sustained trading below the 55 days EMA, now at 37.152, is needed to be the 1st signal of a medium term reversal. Barring that my outlook is Bullish. Stay tuned...
Nymex Crude Oil (CL)
My outlook in Crude Oil remains unchanged. With 111.00, the minor support, intact, this rise is favored to continue. A clear break of 113.46, Key resistance, will confirm the resumption of the recent rally, and should target 100% projection of 33.2 to 83.95 from 64.23 at 114.98.
On the Downside: a clear break below 111.00 will delay the Bullish case some, and bring more consolidations below 113.46 1st before resuming the larger rally.
The Big Picture: the medium term rebound from 33.2 is in progress, and a Stronger rise should be seen towards 100% projection of 33.2 to 83.95 from 64.23 at 114.98. But, there is no change in my POV that this rally is the 2nd wave of the consolidation pattern that started at 147.27, the Y 2008 high. So, I will start to look for reversal signal again above 114.98, the projection level. But, a clear break below 96.22, Key support, is needed to indicate medium term Topping. Barring that my outlook is Bullish. Stay tuned...
