Gold break of channel support earlier this week has price testing weekly/monthly support by Bill Downey


	INTRA-DAY NEWSLETTER ~ Aug 21 2014 US Manufacturing PMI Surges To Over 4-Year High, Biggest Beat on Record Submitted by Tyler Durden on 08/21/2014 - 09:53 Following July's drop in US Manufacturing PMI (and biggest miss in 11 months), Augusts Flash print hit 58.0 - its highest since April 2010, beating expectations of 55.7 and up from the 55.8 July final print. With China (biggest PMI miss on record) and Europe (13-month low PMI) both disappointing, the world needed some help and the US 'soft' survey offered it up in spades... Production levels surged, employment rose at the fastest pace since March 2013, and new orders picked up once again. This was the biggest beat on record - well above even the highest economist’s estimate. Philly Fed Surges To Highest Since March 2011 Despite Plunge In Jobs & New Orders Submitted by Tyler Durden on 08/21/2014 - 10:12 Philly Fed has beaten expectations for 6 months in a row with its biggest surge since the 2009 lows. Against expectations of 19.3, Philly Fed printed 28.0 - highest since March 2011 all-time highs. All sounds awesome right? Umm, no, 7 of 9 internal declined including - New Orders tanked, Employment tumbled, Prices Paid plunged, and Prices Received slumped. So, in case you were wondering how it is possible that Philly Fed surged given such shitty internals, the 6-month forecast index ("hope") just surged to 22-year highs. And not only that: put all hopes of that long-delayed CapEx renaissance on hold: "While most broad indicators of future growth have been improving, the survey’s future capital spending index has been slipping. Although the index decreased just 1 point this month, its reading, at 17.5, is now the lowest it has been in seven months." Initial Jobless Claims Drop Back Under 300k; Continuing Claims Lowest Since June 2007 Submitted by Tyler Durden on 08/21/2014 - 08:36 Following last week's surge back over the 300k Maginot Line, the Labor Department print this week is 298k (sigh of relief heard around the world). This is also the week that BLS surveys for the August NFP print. Continuing claims fell once again to 2.500 million - the lowest print since June 2007. Goldman Warns Additional Chinese Stimulus Risks Global Financial Stability Submitted by Tyler Durden on 08/20/2014 - 22:49 The soft July data have once again generated expectations of monetary easing from China. Goldman however thinks further monetary easing would have incrementally less of an impact and would come at the cost of financial stability. This diminishing impact, they argue, would result as overcapacity/oversupply restricts long-term borrowing demand and due to interest rate deregulation, which tends to move the long-term risk-free interest rate to a higher equilibrium, as seen in recent data. As the tradable sector continues to recover on the back of an improved global outlook, Goldman believes that a combination of sectoral policies aimed at easing financial stress and structural adjustment would be a better policy option. They do not expect broad macro easing or an interest rate cut in what remains of this year. All above articles courtesy of www.zerohedge.com On our weekend update we posted the 10 year T-Note chart and pointed out that our projection made last February that interest rates favored a test of the lower trend line on the long term chart was reached last week with an exact touch of that trend line. Thus the news out this week that the FED is going to tighten is right in line with the lows established last week. Contrary to popular opinion, rising interest rates will be good for gold. Its just that the market will first have to make you believe its not good and therefore they will attempt to sell off gold. They will do this in the same manner that they tell you a decline in economic conditions is good for gold. Gold Chart We discussed on the website the last two nights that the gold uptrend channel had been violated and if we lost 1294 odds favored we would head towards 1272-1282 . The low so far today is 1274 and as you can see we got within just a hair of the next key support line. Resistance is now 1282-1286 and 1294-1298. Support is 1265-1272. CYCLES The next cycle turn is due August 25th (plus or minus 72 hours). A low should develop on this turn with a rally into early Sept. Support is the dotted trend lines. The cycle window for a low opens next Monday. Silver Silver continues its downtrend and until we at least challenged the green moving average, the trend remains down. The next support is the gold trend line below 19. Resistance is 1950-1973.

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