Forex: Gold advanced as Stocks reached 5 years high - still at risk Sub $1693

Advance Gold Stocks 5-year senior success - still at risk Sub $1693

Fundamental forecasts for gold: neutral

-Technical analysis of the products: Gold extends trials beginning January, high earnings

-Consumables: crude oil at risk but the price of gold can find support

-Consumables: Gold, vulnerable oil, all eyes are turning to Bernanke

Gold continued its progress of the week with the metal last previous progress 1.53% to trade at $1688 at the close of trade in New York Friday. Advance took bullion in resistance key $ 1693 as global equity markets has pushed to multi-year highs and products are is joined on the back of solid economic data by the United States and China. Data on the housing market this week offered more that the pace of recovery is the collection of December housing starts surging 12.1% m/m, foot of a previous decline of 3% in November as claims without initial job fell to their lowest levels since early 2008. Thursday, data on GDP in the second largest economy of the world are increasingly high that planned with an impression of 7.9%, allaying concerns about a 'hard landing' risk in China. The titles have continued to support the risk with tracking gold prices more wide feelings of risk throughout the week.

Inflation data this week show the pace of price growth in the United States held steady with the year last printed from below the expectations of 1.7% (vs. expected 1.8%) from a previous reading of 1.8%. Although data continues to support the official text of the Fed that inflation expectations remain "well balanced", various Fed officials have continued to voice their concern that the current policy of the Central Bank can stir up inflationary on the road. Yet, in the short term Bernanke has remained firm in his beliefs with the President, noting that inflation expectations remain "well anchored" and that the United States was "on track" to remain at or below its 2 per cent target. Thus, we remain cautious on gold here in light of the recent rally off monthly lows while noting that a breach of technical resistance in the short term may be in the cards should the active risk rally persist.

Thinking about next week, traders gold will be anticipating the latest IMF World Economic Outlook for a forecast updated on the prospects for growth in the world. Look for gold to react accordingly an optimistic assessment providing wider support for the rally's products as economic activity continues to improve. A downbeat perspective could trigger a correction in risky assets with such a scenario likely to feed a rejection of key support just above current levels.

From the technical point of view, gold remains at risk as long as the threshold of $1693 is respected. This level is defined by the extension of Fibonacci 61.8% long term taken from December 2011 and may 2012 low and served as a clear pivot in the price action which dates back in early 2012. Note that prices have continued to exchange within a descending channel formation that dates back to the high with a movement beyond the moving average to 100 days to $1716 needed to be considered as stable gold in October. Short term support is based on the moving average of 200 days at $1662 with essential support in the region between 100% extension of Fibonacci from the October / November highs and the retracement in 61.8% of the rally 2011 low (lowest level of moving out of the record level) to $1626-1630 $. Daily RSI has now reached its highest level since November 27 with the oscillator just to flatten the 60 threshold. The last time we saw the threshold of 60 compromise was August 21, which was the appearance of the violation above $1626, which took us into November highs just shy of $1800. Search gold to back the beginning of the week next with a slight bias downward both the key $ 1693 resistance remains intact. -MB

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