GOLDsaw heavy selling in offshore trade as most asset classes were sold off last night on increasing concerns in the Eurozone and the effects a recession will have on the rest of the global economy. No asset was spared as the USD gained sharply and equities tumbled seeing commodities sold off across the board and growth and demand concerns grew on the night. Gold finished US trade weaker by 3.05% at $1,720. Gold was not spared in offshore trade as even perceived safehaven assets were sold off as investors moved to cash on the back of increased concerns in Europe. Having said this, Gold has held up very well in the face of such strong USD buying and still remains above trend support which resides at $1,690/95. Only a breach here will have us concerned. Remember, markets have been loading up on precious metals of late so it is not surprising to see a pullback even when safety flows should pick up. Now that longs have been flushed out of the market we should see trend support hold and another big move higher occur as equities stabilise. We turn neutral in the short-term until we see a close back above $1,750 but remain bullish in the MT above $1,690/95. Buyers should keep stops just below this level and look to buy dips towards $1,705/10.

Compass Direction

Short-Term      Medium-Term

NEUTRAL        BULLISH

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