DAILY COMMENTARY

Gold managed to remain above the key technical level of $1,130 in Monday afternoon trade, but risk aversion continued as the market assessed earlier liquidation after last week’s news of Goldman SachsGold managed to remain above the key technical level of $1,130 in Monday afternoon trade, but risk aversion continued as the market assessed earlier liquidation after last week's news of Goldman Sachs' fraud investigation and a delay to Greece's aid deal. Goldman market maker Paulson & Co., which holds a large long gold position, was not implicated by the SEC. (Denina, C., April 19, 2010, "Gold stays off lows but risk aversion still weighs", The Bullion Desk)

Silver futures are lower in early trading Monday, on follow-through selling pressure from strong losses on Friday. Silver also produced a bearish weekly low close on Friday. However, no serious chart damage has yet occurred in silver. The silver bulls still have the overall near-term technical advantage. (Wyckoff, J., April 19, 2010, "Kitco Metals Roundup", Kitco)

In other news, Investors will also be sorting through quarterly results from around one-fourth of the S&P 500, while bracing for the possibility that the SEC's investigation into Goldman Sachs is just the tip of the iceberg and there will be more indictments coming.

Meanwhile, Citigroup, one of the worst hit by the financial crisis, posted a $4.43 billion profit in the first quarter, the best result for over two years. However, CEO Vikram Pandit said he remained cautious about the environment, due to an "uncertain economic recovery and high unemployment in the US." (Kitco, April 19, 2010)

Oil prices dropped more than $2 to below $81 a barrel Monday, extending big losses on expectations that disruption to air travel from the Icelandic volcano will lower demand for jet fuel and uncertaintly about whether it would hamper the global economic recovery.

The long-term outlook for gold remains bullish. Gold is up over 2% for the month and 32% for the year. Analyst Roger Wiegand predicts gold to hit $1375 this spring. (Commodity Online, January, 2010)

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