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14th november Gold Trend Analysis

In last nights website update resitance was listed at 1795-1805 and the high so far today is 1795. Support was listed at 1770-1778 and the low so far is 1773.

TRADES — I have no short term positions at the moment.

London Gold Fix $1,780.50 +16.50

The gold market seems to have started out on a neutral track this morning, trading between the 1773-1795 area. While some media outlets were touting a return to risk on conditions, in the wake of an acceptable Italian auction earlier this morning, there aren’t too many markets buying into that track of thinking in the early US Monday trade. In fact, equities were unable to claw back into positive ground, US Treasuries were holding higher and the dollar was stronger. In other words, there was hope that changes in Italy might create some optimism today, but instead the markets don’t seem to be willing to tamp down their anxiety. Despite a bullish gold opinion released from a major investment banker overnight, gold seems to be tracking sideways to lower so far this morning. We saw last week what the markets did when Italian rates went over 7% —— and it wasn’t pretty. They’re currently at 6.6% this morning —— and Spain’s yield’s are also over 6% now. The EURO SITUATION continues to be very dangerous and we’ve not seen the last of it yet.

All things considered, gold doesn’t seem to be benefiting from move to quality conditions at the start of the new trading week. While equity markets in Asia were generally higher during overnight trading, stock indices in Europe are down this morning. US equity markets are open close to unchanged levels. The US Dollar is moderately higher against most of the major currencies this morning, although posting a loss versus the Yen. Italian Prime Minister Berlusconi resigned after the approval of new austerity measures, with the new government to be headed by Mario Monti. An official agency has projected Chinese inflation to fall below the 5% annual rate by the end of this year. Japanese GDP during the third quarter was up 1.5%, in line with market forecasts. Euro zone Industrial Production during September was down -2.0%, slightly better than expectations. There are no major US economic numbers to be released this morning

Going to the Chart

Gold is trading in a neutral zone at the moment. We touched the first weekly resistance listed on the website at 1795-1805 and we’ve touched the first support area —- namely the 1773 area. The chart has us as not only short term resistance, but one could argue medium term as well. As we listed last night —- as long as 1795-1805 resistance remains intact, the potential to turn down this week is still in play. It takes a move above those levels to get us on the bull side of short term moves. So far — the pullback to 1773 has held and that is the first support area of any significance. We think a good sized move has potential to develop but are unsure of which side the market has decided on. Thus from a trade perspective — its a neutral situation today. Until we move above 1795-1805 — we think the downside has a slight edge but it will take closes below 1770 to add to downside potential and price can still go either way. Resistance for the remainder of the day is the 1788-1790 area ——–and the daily resistance of 1795-1805. Support is the 1761-1769. In summary — we’re neutral for today. We have a slight bias towards the downside. We’re looking for a low risk set up this week — and when we see it, we’ll list it on the website.

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Thoughts
"For a mountaineer, the important things are the effort, the posture and the muscles. The rope that holds him serves no purpose when everything works but it gives him a sense of security. In the same way, all gold does is ensure confidence; it's a safe haven."