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Gold Ready For Another Big Fall ! JPY Will Gain If BOJ Fails To Act – June 11

June 11, 2013
It was a quiet start to the week in the absence of any major data release. Today again there are some minor data announcement that should not have big impact in the market. But one event that should not be ignored is the German Constitutional Court Ruling on OMT bond buying. Market will wait for the court announcement and as the past trend suggest, it is likely to be passed by the German Court that will allow ECB to purchase bonds of troubled countries.
It is worth adding that out of 23-ECB council members  only Bundesbank President Jens Weidmann a ECB council member voted against Outright Monetary Transaction program (OMT) that has not been used so far. However, court language that may take two-days to announce the decision will be the key, anything against market expectation can be the driving force.
Meanwhile, sharp down move was seen in Yen, as the Japanese currency weakened on expectation that Japan in its coming policy announcement may decide to add liquidity in continuation to of its earlier policy to support its easing stance. Let’s not confuse market with JGB buying plan, NIKKEI under pressure or rise in US 10-years yield. Bottom line is that if Bank of Japan does not act now by announcing extra measures, JPY will make gains.
A word on gold, I would like to make a small comment that according to latest poll, 62 pct of the US Economist think that FED should start reducing bond buying plan. This is a big hint and with current pace of US economic growth, which looks sustainable or may even get better, I see no reason holding gold until FED acts, as this hint should be enough to pick the top and sell Yellow metal, as big fall could occur in a very short term period.

 Twitter      @asadcmka             for Gold & Currencies Update…….

GOLD @ $ 1385.50 = I do not see much beyond $ 1395 as I would like to lower the top of the week from $ 1425 to $ 1405, as I see risk for a fall. Possible break of $ 1375 may trigger a fall and break $ 1368 could see gold plunge.    
GMT 3:03 – JPY @ 97.95 = Need to push beyond 99.30 or suspect that break of 97.20 could extend Yen gains toward 94.50 this week. For today 97.40 is crucial for another test of 98.80 or else 96.80.
GMT 3:08 – EURO @ 1.3287 = Current rally needs to surpass 1.3298 for test of 1.3340-50 zones or else 1.3235-40.
GMT 3:11 – GBP @ 1.5595 = Should hold above 1.5550-60, as Break of 1.5610 will encourage for test 1.5640-50 or else 1.5520.
GMT 3:14 – AUD @ 0.9433 = Threat of more losses is possible and may exhaust around 0.9460 for 0.9383 or else 0.9490.

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