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28th november Gold Trend Analysis

In last nights update resistance in gold was listed at 1697-1709 — and 2nd tier at 1718-1725 and the high so far today is 1720. Support was listed at 1670-1683 and the low so far is 1683.

TRADES — No open positions currently

I place A buy order at 1705 SPOT FOREX GOLD — STOP loss 1675 intra day for now.

London Gold Fix $1,714.00 +$38.00

CME NEWS

With an initial risk on vibe in place, precious metals and a host of commodities are starting off the week on a very positive track. In addition to sharp overnight gains in equities, noted strength in the Euro and calls for a wave of global stimulus, the bulls in gold are embracing a number of potentially bullish themes. However, the back bone of the bullish vibe today seems to be hope that the IMF might be poised to help Italy with as much as 600 billion Euros and that would certainly seem to be a large enough backstop to quell debt fears from Italy. It is certainly interesting seeing such a move in markets based on — hope. But markets are grasping at anything they can to put forth a bullish feel.

With the reversal of last week’s stance in gold, it is also possible that gold is seeing some short covering on top of buying interest this morning. However, given the action in equities and the broad based price gains being seen in a number of commodity markets this morning, there might also be some justification for fresh outright buying of gold.

With the gains starting in Asia and the Asian trade pointing to hope for Italian debt relief, commentary from the IMF might be critical for gold this week. It is also possible that part of gold’s gains today are due to OECD calls for global stimulus, as several countries including the Euro zone, might be poised to reduce rates in an effort to cushion the world economy against Euro zone affairs. Others have even suggested that the US and UK need to launch additional QE measures as austerity in the UK and forced spending cuts in the US are expected to be a check on future growth rates. Some gold players might be buying gold off hopes that this Friday’s US Non Farm payroll reading will contribute to the risk on view. Equity markets in Asia and Europe were higher during overnight trading, and US equity markets are open with substantial gains. The US Dollar is sharply lower against most of the majors this morning. Belgium has passed a new austerity budget and may be closing in on forming a new government.

Going to the Chart

Today’s chart shows the short term cycles we look at to ascertain short term trends and have discussed on the website. The ideal low day was due on the 25th of the month (Plus or minus 72 hours) and today’s strong rally suggests that price is reacting (at least initially to this new trend change that is due to last 1 to 2 weeks with an ideal high near December 9th.

We just need to keep in mind we are dealing with a market that reports the worse stock market performance since 1932 and then moves up 325 points on the day after the report —- with headline news that the american consumer is back with the biggest retail day since 2007. Thus we have a choice — we can continue to listen to the news —- or we can pay attention to the chart and trust that. IT is never easy but the chart and price in the end is all that matters.

THE 1720-1725 area is first resistance here this week as shown on the chart. A pullback now to the dotted blue line near 1700 should provide support —– and if we get that pullback, I’ll look to enter a short term trade. The other target area for the coming week is going to be the 1737-1747 area in price basis spot Forex. If we’re filled on a pullback, we will list on the website where the profit targets will be for this trade. In summary — the markets have initially signaled that the short term trend turn seem to have kicked in and for now, we’ll look to hop on if we get a pullback to support.

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."