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Market Update 4th March 2010

Why Gold bulls should be excited

The Technical Trader’s view:

161.8% 1500
Gold 100 Troy Oz. COMEX Continuous
1400
1300
Prior High 1033.90 High
1200 DAILY CHART
$873 1100
100.0%
1000
900 The market took it’s time to
800
break free of the Prior high
700
Pivot from 1980 at 873.
600

500
The consolidation of the
400 market at that level was
unambiguously left behind
300
last month.
0.0%

200 So the next bull leg is ready

to begin and there is good
support on any pull backs at
both 1033.90 and 873.
100

: 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 010 10 11 12

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This information memorandum has been prepared solely for informational purposes for customers of Seven Days Ahead and is based on publicly available information from sources
believed to be reliable. It is not an offer, recommendation or solicitation to buy or sell, nor is it an official confirmation of terms. No representation is made as to the completeness or
accuracy of any statements or forecasts contained herein and no responsibility or liability is accepted for losses arising from transactions undertaken or investments purchased, sold or
held on its recommendation. Consequently, any persons acting on information contained herein do so entirely at their own risk. Although the opinions contained herein were
considered valid at the time of release, financial markets are subject to rapid and unexpected movements. Seven Days Ahead, its associated companies, their directors, employees,
other customers or connected persons may from time to time undertake transactions or deal in investments mentioned in this information memorandum or have a material interest,
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Gold 100 Troy Oz. COMEX Continuous 1300

1250 DAILY CHART

1200

The catalyst for the market’s

1150

1100
1033.90 High surge away from the 873
1050
Prior High was the formation
1000
of a Head and Shoulders
$873 Prior High in 1980
950
Continuation pattern that
900 completed in September
850 2009.

800
The initial surge fell well
Prior High support $732
750
short of the minimum
700
measured move (up to
about 1340), and fell back to
650 the Neckline where there
was good support.
600

D 2007 M A M J J A S O N D 2008 M A M J J A S O N D 2009 M A M J J A S O N D 2010 M A M

Check out the detail of the
Trend from 2001
bounce from the Neckline.

Gold 100 Troy Oz. COMEX Apr 10 1245

1229 High 1240
1235
1230
1225
DAILY CHART
1220
1215
1210
1205
1166 1200
1195 Certainly there is a completed
1190
1185
1180 bull falling wedge – not the
1175
1170
1165 most reliable of patterns - note
1160

1126
1155
1150 well the completed Head and
1145
1140
1135
Shoulders Reversal – in the last
1130
1125
1120
few days….
1115
1110
1105
1100
1095
1090
The neckline support for the
50.0%
1085
1080 H&S pattern is at 1135 or so.
1075
1070
1065
1060
1055
1050
The horizontal support at 1126
Prior High support in July 2008 = 1031 1045
1040 beneath.
250000

200000

150000 Minimum measured move?

Prior High support in Feb 2009 = 1015
100000

50000 Short-term, as far as 1220….

24 1 8 15 22 29 5 12 20 26 2 9 17 23 2 8 15
December 2010 February March

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This information memorandum has been prepared solely for informational purposes for customers of Seven Days Ahead and is based on publicly available information from sources
believed to be reliable. It is not an offer, recommendation or solicitation to buy or sell, nor is it an official confirmation of terms. No representation is made as to the completeness or
accuracy of any statements or forecasts contained herein and no responsibility or liability is accepted for losses arising from transactions undertaken or investments purchased, sold or
held on its recommendation. Consequently, any persons acting on information contained herein do so entirely at their own risk. Although the opinions contained herein were
considered valid at the time of release, financial markets are subject to rapid and unexpected movements. Seven Days Ahead, its associated companies, their directors, employees,
other customers or connected persons may from time to time undertake transactions or deal in investments mentioned in this information memorandum or have a material interest,
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The Macro Trader’s view:

The Gold market has held our attention for several years now and during that time we have
been long-term bulls of the market, despite several corrections lower during its long march
higher. We believe the recent period of weakness in this market has been a correction.

As we have explained in previous commentaries on Gold, we believe the correction was

started by a surprisingly stronger US non-farm payroll report at the beginning of December last
year.

The release of that number began a strong rally in the Dollar as traders began finally to believe
in the US economic recovery, which appeared to rob gold of the safe haven status it had
enjoyed during the years of Dollar weakness. But when, over the last few months, a run of
mixed data from the US and elsewhere placed a question mark over general recovery the
Dollar rallied further as a safe haven and Gold was sold again.

The final phase to date has been the Greek debt crisis, which at its height forced a selloff in
several asset classes as traders cut risk and fled, again, to the relative safety of the US Dollar
and Japanese Yen.

Now we see Gold once more attempting to go higher. The fears over Greece haven’t gone
away, but traders currently judge the wider sovereign credit default they feared now looks less
likely. Greece has embarked on a tough austerity program, which has calmed markets to the
extent that traders are again moving back into riskier asset classes, stocks and commodities
among them.

Gold has resumed its position of hedge of last resort formerly enjoyed at times of Dollar
weakness. But the Dollar is well-supported now, so that relationship seems to have changed.
The reason for this seems to be down to market perceptions of how and when the authorities,
will seek to withdraw the massive stimulus injected into the US and Global economy to guard
against financial market meltdown.

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This information memorandum has been prepared solely for informational purposes for customers of Seven Days Ahead and is based on publicly available information from sources
believed to be reliable. It is not an offer, recommendation or solicitation to buy or sell, nor is it an official confirmation of terms. No representation is made as to the completeness or
accuracy of any statements or forecasts contained herein and no responsibility or liability is accepted for losses arising from transactions undertaken or investments purchased, sold or
held on its recommendation. Consequently, any persons acting on information contained herein do so entirely at their own risk. Although the opinions contained herein were
considered valid at the time of release, financial markets are subject to rapid and unexpected movements. Seven Days Ahead, its associated companies, their directors, employees,
other customers or connected persons may from time to time undertake transactions or deal in investments mentioned in this information memorandum or have a material interest,
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The US and UK have governments are reluctant to withdraw the fiscal stimulus for fear of
precipitating an economic relapse, despite evidence of economic revival, which in the US looks
very strong; Q4 GDP @ 5.9% annualised equivalent to just under 1.5% q/q.

Moreover the monetary authorities, the Fed and Bank of England, are reluctant to adjust
monetary policy. Both Central Banks continue to see a risk of relapse. In the US this is mainly
due to the high level of unemployment that resulted from recession. And with inflation still
benign the Fed has the luxury of time on its side. In the UK inflation is higher, but the Bank
dismisses this as due to one-offs that will correct. And with a large output gap in the UK,
economy policy makers’ judge that they too, have the luxury of time.

But note well how when risk aversion recedes as traders become more confident about
recovery, Gold now rallies. The reason is that markets do not trust the authorities to time their
exit strategies in such away to avoid inflation.

So although the Dollar remains supported, Gold too looks set to rally further, independently of
the price action in the Dollar, as the body of evidence supporting a strengthening recovery
builds.

We believe the bear correction in Gold to be over.

Mark Sturdy
John Lewis
Seven Days Ahead

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Authorised and Regulated by the FSA 124 REGENTS PARK ROADLONDON NW18XL TEL +44 (0) 7849 933573
E-MAIL MSTURDY@SEVENDAYSAHEAD.COM WWW.SEVENDAYSAHEAD.COM
This information memorandum has been prepared solely for informational purposes for customers of Seven Days Ahead and is based on publicly available information from sources
believed to be reliable. It is not an offer, recommendation or solicitation to buy or sell, nor is it an official confirmation of terms. No representation is made as to the completeness or
accuracy of any statements or forecasts contained herein and no responsibility or liability is accepted for losses arising from transactions undertaken or investments purchased, sold or
held on its recommendation. Consequently, any persons acting on information contained herein do so entirely at their own risk. Although the opinions contained herein were
considered valid at the time of release, financial markets are subject to rapid and unexpected movements. Seven Days Ahead, its associated companies, their directors, employees,
other customers or connected persons may from time to time undertake transactions or deal in investments mentioned in this information memorandum or have a material interest,
relationship or arrangement in relation to them.