GGP Update

Dear readers,

In recent weeks the Dow Jones World Index had it's worst decline since 2002.
On the same page the VIX reached the highest point since 2003.




Given recent moves in major currencies (EURJPY 169 – 149, GBPJPY 251-219) gold have been as stable as one can expect from a major independent private currency. This is very encouraging to say the least. Odds still favors higher gold rates more then lower USD index.


Gold daily chart annotated with wave count

Same 1-2 extending
















Silver daily chart annotated with Elliott wave count

Retraced September 2006 – February 2007 secondary advance

2007 Q2 Hedge Book

Insiders are still buying :

Q2 07 Hedge Impact Declines 5.4 Moz to 31.2 Moz.

See the full report here

Dubai's Gold ETF

By Summer Said

DUBAI (Reuters) - Dubai, already the region's gold trade hub, may see the launch of the Middle East's first gold exchange traded fund (ETF) in 2008, a senior World Gold Council (WGC) official said on Monday.

"Gold trade in Dubai and the region is definitely booming and the market players need an ETF market to manage their risk and catch up with other international markets," said Moaz Barakat, managing director of the WGC in the Middle East, Turkey and Pakistan.

"There is a great interest for ETFs in the region... We may have a Dubai ETF next year."

ETFs offer investors exposure in the underlying commodity without taking physical delivery. Sponsors of gold ETFs buy a matching amount of the commodity from the market to keep in vaults.

"It will be linked to a dollar-based gold price, but it has not been decided yet if it will be listed on the Dubai Gold and Commodities Exchange or the Dubai International Finance Exchange," he said.

source

GCQ7 Update

Dear readers,

This will probably be the last GCQ7 chart as gold futures contracts are rolled into December and October (GCV7, GCZ7).

Hype is all over the place so sentiment indicator probably supports the case for some correction here, As previously mentioned USD is trying to bounce.



August Gold - GCQ7 Intraday (120 min) Chart

Gold, USD & Forex Update

Dear readers,

The USD is looking oversold here and some bounce might be expected. If you add a channel the way I did, you can see that the USD index is at the bottom of the channel. In addition, the USD just tested the psychological important 80 level – this level was rarely violated, ever.


USD Index Daily Chart (note the deep oversold condition of RSI 14)




































Try to avoid shorting the Yen as the crowed count this currency as a weak one. The interest rate on the yen is low and might continue to stay low for some time but the Japanese economy is not a weak economy in my book, not at all.

Particular vulnerable is the EURJPY pair which had already completed or might be very near to complete a seven years rally. A large correction is expected here – take note!

EURJPY Weekly Chart , Elliott wave count. (click to enlarge)





















Gold and silver had a nice rally (as expected) but some significant resistance seen for both. on the other hand gold in terms of Yen and Euro made some advance so the move was not all USD related. If the USD will start strengthening as it might gold can correct some of its recent 47$ rally. Corrections should be seen as a buying opportunity and the June low should hold.

Spot Gold weekly chart annotated with Fibonacci levels. (click to enlarge)