Greetings!, According to Walter Zimmerman Jr. (chief technical analyst at United-ICAP), since gold traded below its record high of $1920 in September 2011, it "has been congesting in a manner consistent with a bull market correction." I am in absolute agreement with the statement. Furthermore, Mr. Zimmerman believes that there still is a distinct possibility that gold will rally to the $2300 area as long as it's able to hold above 1581 to 1564. "To confirm this most bullish case gold still needs to break above the 1862 level." Although I find this assessment a little overly optimistic, my original forecast for this year took gold over $2000 per ounce. It is certainly my hope that either of these scenarios come to fruition. Markets were closed for May Day in Europe and Asia today, so the focus was on the United States. Gold traders had their spirits dampened by a rise in the U.S. manufacturing index, the best report in 10 months, tamping down thoughts of QE3 by the Fed. However, there are a handful more reports due out this week that could strike up the quantitative easing band again: ADP payroll data and factory orders tomorrow; unemployment claims Thursday; and government non-farm payrolls on Friday. Perhaps that is what accounted for the moderateness of the price slip today. Waiting in the wings is the European situation. There is growing sentiment that the central bank(s) in Europe will peg down interest rates to stimulate what is increasingly becoming an ossified economic super region. My guess is that if France stumbles more and Germany hears the scuffling of their feet, rates will go down in Europe. One school says this will drive the price up, at least temporarily, but will most certainly drive physical demand down eventually. (Demand has already plummeted in India due to the squishy soft rupee.) We said yesterday, gold and silver are diverging, although the uptick in manufacturing kept silver only about even today. Silver, too, was in a holding pattern waiting for stats. As always, wishing you good trading, Executive Producer | 
