Greetings!,

It's all about China.

Today both gold and silver were in the second straight day of lower pricing after China announced their lowest economic growth target in seven years. This, of course, would put a damper on commodity demands and economic growth globally.

SPDR gold trust holdings reported that their current holdings were unchanged as of March 5 at 1,293.68 metric tons. At the same time Deutsche Bank holdings in physical gold exchange- traded funds increased 3,916 ounces to 1,075,782 ounces as of March 2 according to Bloomberg news.

OK - Greece Too

Lastly continue to keep your eyes on Greece. They currently expect their bondholders to accept a one time offer to write off about €100 billion of Greek debt. According to Finance Minister Evangelos Venizelos, "We are ready to force them to participate if necessary". I believe those are very strong words for a country so hobbled by debt.

As always wishing you good trading,

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Proper Action

GOLD: Awaiting a proper signal... for now we are on the sideline.

In at 1580 per ounce out at 1700 per ounce gave our first gold trade $120 profit when all was said and done. That amounts to a $12,000 profit per $10,000 invested in one Comex 100 ounce gold contract. Thus, even with the drastic sell-off last week we were able to see over a 100% return on our first trade of the year in gold.

SILVER:  Silver today had a low of 33.55. Last week we raised stops to 33.80. That stop was effectively taken out when silver broke into the lows in trading today. Consider the following:  We went long at 28.10 and got out at 33.80. That gave us a total profit of $5.70.

Each Comex contract controls 5000 ounces silver. Which means the equivalent price moves per contract was $28,500. Since the initial margin to control one contract is around $22,000, this first silver trade of the year amounted to over 100% return. As in gold we are sitting on the sidelines.

MARKET FORECAST

Gary S. Wagner

Gold & Silver: the big question is where will gold and silver find support and begin to trade back in positive territory in terms of price gains? For a second day in a row we have seen gold trade lower along with the other precious metals. As you can see from the chart below we are back at the $1700 bottom that was tested last night and proved to find support. As we have exited both our gold and silver trades and returned over 100% profit on each trade we will sideline and await the appropriate signal and then reenter the market.

Gold Daily Chart

 SILVER Daily Chart:

Copyright (c) 2011 Wagner Financial Group