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24th january Gold Trend Analysis

Last nights update listed 1672-1682 as resistance and the high was 1679. Support was listed at 1642-1653 and the low so far is 1661.

Trades

Long Feb gold at 1650 —————— I’m selling here at 1669 FEB GOLD and will put in an order to re-buy the position at 1653 Basis Feb at the 38% retrace of the move up from 1616. if we get that pullback and get filled —– I’ll run a stop at 1643 Intra Day basis FEB. The trend is still up — and a close above 1680 will target 1700.

Long Silver at 28.63 —————–I’m SELLING NOW AT MARKET (32.33) — with a nice gain, I’m happy to take profits and sit back. The trend is still up — but i’ve met my target. THE TREND IS still up, but I’ve met my target. If we get a pullback that looks like a good setup — i’ll look at re-entry.

London Gold Fix 1669

CME NEWS

February gold has started out somewhat off balance as the market might have been technically overbought after the rather noted uptrend of the last month. Surprisingly bullish views toward gold from a noted commodity analysts overnight haven’t initially resulted in a definitive rise in gold prices overnight, but gold is battling a slight rise in Euro zone fears and initially adverse Dollar market action. While the gold market also saw evidence of rising gold production from two gold miners overnight, the ebb and flow of gold supply doesn’t look to be a dominating issue for gold prices today.

The gold trade is probably looking ahead to the prospect of critical US Fed interest rate policy revelations, as a two day FOMC meeting gets underway today. Also of importance to the gold market (at mid day today) will be an upcoming tranche of US government debt supply. While the State of the Union Address might have some impact on gold prices late tonight, most political analysts think the Presidents speech will have little lasting influence on gold prices.

World equity markets were generally weaker overnight, but many Asian markets remain closed due to Chinese New Year. The markets saw Euro zone numbers overnight that might have reduced the prospect of a hard landing but many economists also thought that the path to recovery in the euro zone remains fraught with peril, especially with Euro zone Ministers overnight initially rejecting a Greek bond holder offer. In fact, news of softer earnings at a European corporate mainstay (Siemens) may have fostered some renewed fear of slowing in the Euro zone overnight. Also out overnight was news that Japan was running an extremely rare trade deficit and that in turn might contribute to fears that the world economy is still seeing headwinds from a number of regions. While the markets are looking ahead to a two day FOMC meeting, the impact from the Fed today might be limited. The trade will see a US Richmond Fed report today and some weekly chain store sales figures early in the session. Also out today are a flurry of US corporate earnings reports, several of which might shed some light on the condition of the US consumer. The US Dollar has started out stronger against the euro. While there will be a US State of the Union address tonight, speculation on the content of the speech seems to be focused on Wall Street reform, instead of exclusively on the economy and therefore metals markets might fall back on their heels, until after the impact of the President’s speech and until after the FOMC statement is known on Wednesday afternoon.

Going to the Chart

The daily chart shows the resistance area if 1680 has so far stopped the price rise right at the resistance area on the daily chart for the second day in a row. There’s a lot more uncertainly this morning and with the state of the Union tonight, and the FED FOMC meeting today and tomorrow, a pullback in gold is underway. The US Dollar is higher and most commodities are down this morning.

Expectations are that gold will probably trade in the 1650-1680 range today and Wednesday as the market waits for direction and the FOMC statement. Resistance for the remainder of the day is the 1672-1674 area and then 1678-1681. Support is the 1651-1654 area and 1661-1663. Today favors range bound trading in the 1655-1675 area. Today’s chart below shows the daily cycles. There’s a trend change due this week by Thursday morning that would favor a peak and pullback into early February that has about a 75% chance of us seeing a pullback. As discussed on the web last night, taking profits at 1680 is a very tempting play and one can make a case for it. In summary — a pullback to the 1650-1659 area can certainly come into play — and while price can still move higher towards 1700 this week, the risk for a pullback to 1651 – 1655 has increased. In summary — cycles are due to peak this week and they have about a 75% record of accuracy. The overall trend is still up — but the potential for gold to have met its target is also potential.