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19th january Gold Trend Analysis

London Gold Fix $1,664.00 +$7.00

Last nights website update listed resistance at 1672-1682 and the high so far today was 1670. Support was listed at 1650-1655 and the low so far today is 1651.

Trades

Long Feb gold at 1654 —– have additional orders at website. Change Stop loss order to 1638 — CLOSE ONLY — NOT INTRA-DAY. — 5pm globex close

Long March silver at 28.63 —– stop loss order same as listed on website. (traders were advised if they wanted to take profits, the 30.60-30.80 area was the spot to look at for this week)

CME NEWS

Gold saw some buying interest in Asia overnight as the trade in that region continues to toss around talk of improved macro economic conditions in the US and the gold trade was mostly up beat toward the European situation. It also seemed as if some Asian gold buyers were moving to factor in the prospect of a Chinese bank resrve requirement reduction during the upcoming Chinese holidays. BILLS NOTE — Thus London did the up move last night. They had been the sellers all week, and they are leaving the selling to the comex this morning as the swap sessions.

On the supply side, Russian miner Polymetal posted a 10% increase in its 4th quarter gold production overnight and that company also expects to post another expansion of gold production in 2012. In the near term, talk of higher gold supply, looks to be mostly countervailed by positive investment demand talk and positive macro economic views. However, in order to continue to see gold prices push up on the charts today, probably requires ongoing calm from the Euro zone, something positive from the US economic report slate and perhaps a lack of panic from the Greek debt negotiations.

Gold had been gaining some support from the dollar market action as the sawbuck is down to the 80 level. When markets opened on Tuesday, it gapped lower on the charts, and has not been able to fill it. The seasonal for the dollar usually (but not always) peaks in January. Gold and the dollar had both been moving higher, so now we’ll see if gold pullback with the dollar. The main focus of the gold trade might remain on the action in US equities.

Equity markets in Asia were generally higher overnight, as gains in developers and financial shares in China helped to lift prices. THE CHINA stock chart looks like it is bottoming — and we posted one on the website last night. If your going to go long China — this is a good place to do it.

European stocks were also stronger to start today, while US equity market action is mostly mixed as athe ISM number was below expectation. Overnight the markets saw talk that the IMF might only be poised to expand its lending capacity by $600 billion, but that news was also bolstered by mostly favorable Spanish and French debt auction results. Also out overnight was somewhat weaker than expected Australian employment data. The US Dollar has started is weaker against the euro and it was also generally weaker against most of the actively traded majors. In looking ahead, the US markets will see a CPI report, a Philly Fed Business survey (which was below expectations), US housing starts and permits, initial and ongoing claims and a 10 Year US TIPS auction. Expectations for the US data call for generally flat readings from the housing sector figures, but expectations call for stronger information from the claims and Philly Fed reports came in lower than expectations.

Going to the chart

Gold rallied off the Wednesday low at 1642 and made it all the way to the 1670 area where it ran into chart resistance at 1670 where a fib retracement and the adaptive red average resides. Now we’re getting the Thursday pullback to test out support for today. First support at 1650-1655 was tested this morning –and so far has held. However there is additional support at the lows from this week. As long as we remain above the lows of this week and the Gann support line we’ve been tracking, the trend remains up. Resistance for the remainder of the day is the 1559-1665 area and if support at 1650 is taken out — look at the 1642-1645 area for additional support.

In sum the trend is still up on the short term. Prices should stay range bound today and into friday morning. depending on how the pattern looks, we’ll adjust stops accordingly on tonights website update.

FRANCAIS ESPANOL ITALIANO CHINESE

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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."