Without any big news to play off of, most markets begin the week a bit flat. Traders this morning are trying to decide whether the only standout rally in the Gold is here to stay, or if it is an early stop hunt to begin the week. We won’t soon forget the Sunday overnight in the Metals last week when Gold continued a drop that we have not seen in over thirty years. So who can blame anyone for being once bitten, twice shy?

A scan across the board does not reveal much except for a majority of the market sectors making an effort to retrace the price action we experienced a week ago. Korea has been rather silent, the tragedy in Boston is seemingly on the mend, and the parade of FED Member interviews is slowly coming to a close. In the absence of these headlines, we will likely go back to trading the actual reports that are scheduled this week.

In the US, the stock indexes will pay close attention to the continuation of Q1 reported earnings, and may set its sights on the GDP report at the end of the week. Europe reports numbers early on Tuesday and Wednesday, while Great Britain and Japan will take center stage on Thursday reporting GDP and Interest Rates, respectively.

The Weekly Chart on Gold futures shows how critical prices between $1425 and $1500 are for the June Futures. On the lower end $1425 is where the 200 day moving average resides. As we move $25 higher, we run into the trendline that once underpinned the price of Gold, and will probably now provide overhead resistance on the way up. And lastly, a rally to $1500 or better will likely convince traders that last weeks drubbing was all she wrote for a while.

There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data contained in this article was obtained from sources considered reliable. Their accuracy or completeness is not guaranteed. Information provided in this article is not to be deemed as an offer or solicitation with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this article will be the full responsibility of the person authorizing such transaction.

April 22, 2013 (Brian Booth, Long Leaf Trading Group)