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13th december Gold Trend Analysis

Last night’s website listed resistance at 1668-1675 and the high so far is 1678. Support was listed at 1628-1653 and the low so far today is 1651.

Trades — Currently waiting for a set up.

CME NEWS

London Gold Fix $1,665.00 -$15.00

While February gold was able to reject a slide into new lows for the move overnight, the gold market remains below the Monday high. Gold seems to have garnered some support from hope that the German economy will eventually be able to stand up to the knock on influences of the EU debt crisis. However, a portion of the gold trade doubts that Europe or Germany will be able to avoid a recession and therefore interest in the long side of gold is somewhat limited to start the Tuesday US trade action.

Gold was looking for some support from hope of favorable US retail sales figures, but the number was not inspiring coming in only at 0.2% vs estimate of 0.4%. Gold also might be garnering some temporary support because of strong demand for a Spanish debt auction overnight. Since the bulls have been able to grasp at some straws overnight, it is also possible that some shorts in gold were covering positions ahead of the US FOMC meeting later today. Policy on rates will be released at 2:15pm EST today.

The press was carrying somewhat bearish gold market views from a noted commodity analyst and that could dampen the short covering interest in gold early today. However, that analyst is known to make calls wrong when projecting lower price. In conclusion, the gold bulls seem to need positive equity market action and optimism toward the Euro zone just to pause a selling trend that has mostly dominated the prior three trading sessions. While gold hasn’t paid that much attention to supply side developments lately, some gold players might see the projected rise in Australian gold exports for 2011-2012 overnight as a slight negative. One of the new things to watch for is the escalating Iran issue. Comments from overnight pushed Oil up a few dollars as the saber rattling is growing. While equity markets in Asia were generally lower during overnight trading, stock indices in Europe are generally stronger this morning. US markets are open with the obligatory 100 point gain in the Dow. The US Dollar is near unchanged levels against most of the major’s this morning. UK CPI during November was up 4.8% year-on-year, in-line with forecasts. German economic sentiment during December was at -53.8, higher than expectations. The Fed’s Open Market Committee will announce any changes to US monetary policy at 2:15 PM. The second leg of the Treasury’s refunding, the 10-year Note auction, will have results announced today at 1:00 PM. Major US economic numbers to be released this morning include November Business Inventories and retail sales at 8:30 AM, October Business Inventories rose 0.8%, and weekly store sales released during the session.

Bulgaria, Checz Republic, and Latvia, Lithuania, had their ratings lowered by Fitch in the last hour. Reports that Merkel is rejecting certain portions of aggrement is sending the EURO TUMBLING —and all markets have been turned down over the last 1/2 hour. ITALY 10 YEAR BOND BACK UP TO 6.67% —– nearing that 7% level. More testimony from Corzine in MF Global is underway again today. The big question is —where is the 1.2 billion that is missing. After all — the buck stops somewhere.

Going to the Chart

We’ve been waiting for the direction to establish itself as it comes out of the wedge. Analyst Peter Brandt did a good report on triangle’s or wedges — and we use his chart today. As you can see —we finally got the break below the trend line on Monday. We’ve been watching since last week for fake outs of some type coming out of this wedge. The 50 dollar up, then down, then up, then back down over the past 6 trading sessions keeps the whip saw going. Today’s bounce up this morning is the RETEST and attempt to reverse higher. Price pushed up to the upper line on a spike this morning that carried gold from 1650 to 1675. Any move below today’s low will favor lower prices to continue for the next 1 to 2 weeks. Any close back above 1693-1701 and the UPPER LINE of the wedge will favor higher prices into the week of Dec 25th. I’ll be looking to enter on a set up after today. REMEMBER that FED interest rate policy comes out today at 2:15 PM EST.

Resistance is the 1669-1683 area and support is the 1644-1652 area. THE 34 week moving average was hit today at 1650-1653 — and for those who accumulate medium term positions — its an area to consider. This average gets hit 2 to 3 times per year.

The short term trend remains down — and we’ll look for a set up– any break lower after today suggests the downtrend to remain. Any close above the upper line on the triangle — will favor higher into the week of the 25th.