Comments: After yesterday's failed rally attempt, a breakdown of the 1 year trend is quite possible, which would result in another bout of selling to HUI 280-275, at least. The best that could be hoped for then in the short term would be a bounce back to the broken trendline. Overall, the action continues to be dismal. About the only silver lining that I can think of right now is that although gold broke its 1 year uptrend at $581, the Miners haven't yet broken their uptrendline, which might be viewed as a positive divergence of sorts.
Unfortunately, we can't expect Asian jewelry demand to lead Gold to new highs at this time either. Unlike September of last year when everyone had the feeling that Gold will be heading much higher, causing jewelers to accelerate their buying, now we have the opposite situation where people are suspecting that Gold's price may go lower, and are thus not in a hurry to bid prices higher. So jewelers in Asia have shown little interest in introducing a serious bid during the Asian market period since they know that the fellas working the NYMEX will just give them lower prices the next day. So it will be mostly up to New York to stem the current selling.
Comments: the USD Index remains a key question here. It could go either way and if it rallies, it will likely stick a fork in Gold for the time being. Obviously Wednesday's Fed meeting should provide a catalyst for the USD, the only issue will be in which direction.
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