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2nd November Gold Trend Analysis

Last nights website listed resistance in gold at 1727-1737 and the high so far is 1739 spot. Support was listed at 1693-1703 and the low so far today is 1714.

Trades

Orders in gold same as on the website from last night
I’m long silver at 33.60 and 32.87 — for one total position. Keep same sell orders and stops as listed on website last night.

CME NEWS

London Gold Fix $1,731.00 +29.00

The gold market continues to behave like a commodity market, as the ebb and flow of fear from the Euro zone seems to be directing the day to day price action in gold. With a slight toning down of fear overnight, the gold market appears to have found some bullish traction, and a weaker dollar is at least part of the bullish track in gold prices to start today.

THE FED POLICY STATEMENT WILL BE OUT AT 12.30 PM EST — and Bernanke will take questions. They will discuss new economic forecasts — change in communications — and what it would take for the next QE

The gold market doesn’t seem to be overly concerned about a series of stories overnight, highlighting increases in gold production from a number of gold miners but gold hasn’t been overly concerned about small supply side changes lately. The gold market might have seen some support from bullish price forecasts from the Randgold CEO overnight, as he projected a fairly significant upside target.

THE GERMANS ARE URGING GREEKS NOT TO GO THE REFERENDUM WAY– as to whether austerity will be accepted, as that could avert a several month delay in resolving the current Greek problem. The calm from the Euro zone situation will probably be short lived, as the situation in Italy remains in a high state of flux and the heat is on Italy to pass reforms. Furthermore there will be a meeting between Greek, French and Germany leaders today but it is unclear if the Greek leader will be able to remain in power.

The potential for more easing from the US Fed later today, might be something that the bull’s in gold are already anticipating.

While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally stronger during overnight trading. US equity markets are open with moderate gains. The US Dollar is weaker against most of the majors this morning. The Feds Open Market Committee will conclude their two-day meeting today, with an announcement on any changes with US monetary policy at 12:30 AM EST and a post-meeting press conference by Fed Chairman Bernanke at 2:30 PM. The Greek Prime Minister will meet with German Chancellor Merkel and French President Sarkozy today to discuss his nation’s potential referendum on a Euro zone rescue package. German Unemployment during October was 7.0%, higher than market expectations. Euro zone manufacturing during October was 47.1, slightly lower than forecasts. German manufacturing during October was 49.1, above market projections. UK construction during October was 53.1, sharply above market expectations.

Today’s gold chart shows the bullish support gold got at 1680 yesterday. IT looks like gold is set to trade above last weeks highs. Resistance for the remainder of the day is 1744-1749 and support is now 1722-1728. Pullbacks to 1720 ===at the 23% retrace could find support on Wednesday/Thursday. In summary — yesterday’s hold of 1680 and chart pattern suggests a move back to test the highs of last week. A close above 1744-1749 would suggest higher prices. Since its Mid Week Wednesday —- lets be on guard for a peak for the week either today or Early Thursday. UNTIL WE CLOSE ABOVE 1744 — lets remain open to a pullback on Thursday near 1715-1725. The 1775-1800 area would be the next resistance area this week for gold if we close above 1744. THE FEDS speak this afternoon and the markets anticipate more easing.