Greetings!, Analysis of the precious metals markets is continuously fraught with questions. Just when one set of conditions evaporates, another set come barreling in. Some questions refuse to fade away.
Unlike the United States' Federal Reserve System, the European Union has never had the mechanisms in place to funnel capital to their debt ridden member nations. The mechanisms they created recently alleviated panic as they bailed out Greece, allowing that country to make good on a credit payment. Kudos must be given to the European central banks and its leadership as they put into place a bailout package, which for the time being has securely placed a finger in the dike.
Italy, Ireland and Portugal, according to some reports, face a debt crisis similar to Greece's. Will the E.U. be able to provide bailout packages and infusions of massive amounts of liquidity as these countries face potential defaults on their current loans? Can those sovereign nations increase their GDP's to match their unsustainable spending? Will they be able to restructure their budgets to align spending with their annual GDP's? Can the E.U. properly enforce a sustainable budget policy tied to annual GDP's? Now that the gold market has factored in a more stable European Union, what will happen if sovereign nations begin to require huge monetary bailouts? It is because of largely unanswerable such as these that we turn to technical analysis to see us through.
As always, wishing you good trading, Executive Producer | 
