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14th september Gold Trend Analysis

In last night’s website update — resistance was listed at 1844-1856 and the high so far today is 1844 spot. Support was listed at 1815-1825 and the low so far is 1814 spot.

Trades — Long 1 mini Dec Gold at 1825.25 — Stop intra day1780 — keeping it very light.

Volitility and confusion remain strong in the markets. PPI came in Unchanged as did business inventories in US Data. Euro crisis is still on — and China is getting involved but is not going to be the bailout provider for the world. In their words — world must get its house in fiscal order.

CME NEWS

London Gold Fix $1,829.00 +$23.00

While the gold market managed to climb back toward the prior session’s highs in the overnight action, the market continues to give off the impression of being range bound. A slightly higher dollar could be holding back gold prices today and it is also possible that ongoing choppy action in the equity markets is keeping gold partially off balance because of the lingering fear of margin related selling. However, a portion of the gold trade is tracking positively with the equity markets right now and that in turn tamps down the move to quality focus in gold. In other words, the gold bulls probably wanted to see positive retail sales figures and less macro economic uncertainty, as that could reduce the fear of margin related selling of gold. I don’t totally agree with the margin related selling story — but I can’t disprove it either. The market will also saw a US PPI release that was flat also — and with both pieces of data, gold traded down to the 1815 area.

Some traders expect a potential ripple impact from the US 30 Year Treasury auction at mid session as demand this week for Treasury supply has been soft and interest in longer maturities has recently been weaker than demand for shorter maturities. Surprisingly gold appears to have found only minimal support from news of a downgrade of a couple key French banks and that suggests gold is still taking its direction from the equity markets.

While equity markets in Asia were mixed during overnight trading, stock indices in Europe are higher this morning. US equity markets are open and are down 60 points so far today. As “Darth” has pointed out (and previously forecasted) — the FLAT retail sales number suggests that back to School was a dud and continues to point to trouble in economic activity.

The US Dollar is unchanged against most of the major currencies this morning. The head of the European Commission stated his organization would offer proposals for the introduction of Euro Bonds. Two of the largest French banks were downgraded this morning. UK Unemployment during July was 7.9%, in-line with expectations. Euro zone Industrial Production during July was up 1.0%, lower than forecasts. The lasat leg of the Treasury’s refunding, the 30-Year Bond auction, will have results announced at 1:00 PM est.

Going to the charts

There is still a lot of mixed signals in the short term trade portion. On the plus side — the double bottom yesterday at 1790 with the hourly bar low reversing and exhibiting a HAMMER were both constructive. In addition, the weaker cycles are due to end and bring in the stronger portion of the month. I took a mini Dec Long position last night based on this speculation — and chart action at 1825.20–.
However — there is still a lot of action that argues against a continued rise as well that we discussed on the website last night. The main concern is whether the low established yesterday is sustainable or if its just a bounce. My biggest concern is the 34 day average at 1772 has not been reached yet and it only recently(July-Aug) that price has not been testing that area.

The 1815 area has so far supported but until price can move back above the 1860 – 1870 area — the risk on the long side IS HIGH.

At the moment —— the key spot seems to be the 1805-1812 area. THis area seem very important to support. As soon as I can I will be trying to raise my stop.

In summary — the UPTURN has yet to materialize in gold and until price can get above 1860-1875 — the risk will be high. Watch the 1805-1812 area on the downside — as it looks to be very important. On the upside 1833-1840 is a minimum for price to get above to aleviate any downside pressure. Remain Cautious.