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3rd november Gold Trend Analysis

London Gold Am Fix — 1732 ———– 9:30 am New York price = 1760

In last night website update — resistance was listed at 1743-1755 and the high so for today is 1759. Support was listed at 1717-1727 and the low was 1723

Trades:

Bought 1 position in Gold at 1724 ——- sold 1/2 at 1735 — holding other portion. Target to sell remainder listed on the website. MOVE YOUR STOP UP TO BREAKEVEN ON THE REMAINING HALF — If gold can’t hold today’s rally — i’d rather be out with a small gain and have no intention of letting the trade turn into a loss.

Silver –long at 32.87 and 33.60 —– sold 1/2 at 34.30 overnight ———–and my new stop is breakeven on remainder of position.

Euro Notes:

It looks as though Greek Prime Minister has lost the no confidence vote. Reports are he will not resign and press on—-he is scheduled to talk tonight. Earlier reports had him stepping down — but now that has changed. He met with Sarkozy and Merkel yesterday and it sounds like Greece was given the ultimatum from the ECB.

In Italy — the ECU (or someone) has stepped in and bought the Italian and Spanish bonds — stopping them from moving above 6.5% — where MARGIN calls would be set off. That’s the key to watch —- If Italian 10YR goes over 6.5% — things start getting dicey. Latest news is that they are still trying to push through asterity measures this morning in Italy. Greek 2 year yields are at 105% this morning. THE MOVE IS TO SHOW CHINA that the ECB will intervene and buy to hold any margin call problems as they desperately need CHINA to come in and also support.

THE BIG NEWS THIS MORNING IS THE ECB LOWERED RATES TO 1.25% — and that has given markets the latest injection boost that was witnessed after 8:30 am Est New York Time. OF course — instead of rising — the US Dollar is down on the news. WITH THE G20 MEETING THIS WEEKEND — my speculation is they come out with total SUPPORT —- otherwise it could get real ugly next week.

Markets

Oil is up 1.50, grains have early gains, copper is about the only thing down at the moment —– European equity markets are up, japan and hong kong were down —and US stock market looks to open up about 100-150 points. The MF Global mess is still on-going this morning as firms try to get their accounts out of there and return their clients to trading platform.

going to the chart

While we’ve had a nice rally, the best look on the chart favors this as a “b” wave — which is a counter trend move. In other words, the overall pattern still has the look that gold is going to have one more test of the downside later on. These are odds not absolutes.

For today — the one thing to watch is whether the stocks and metals end up failing this up move this morning. Gold made a new high for the week —- but came up 6 dollars short of the 61% retrace target near 1770. So while we are moving up in gold, we should not think we are out of the woods. This is why i’ve already covered 1/2 the long from last night already.

In Summary – the 1770-1800 area looks like the target area for this week. However — the concern is if gold doesn’t hold today’s gains — -if they don’t and reverse lower — the stops are in for protection. It still looks like the upside is favored — but like we mentioned last night on the website — it will be important to not make a slight new high for the week only to turn down. As long as price closes above 1733, the upside has a slight edge but be careful. IF WE TURN DOWN —- from here —- it still has the chance of another pullback. With the uncertainty in EUROPE —- reversals are what to watch from.

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."