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5th december Gold Trend Analysis

Last nights website update listed gold resistance at 1757-1767 and the high so far today is 1755 spot Gold. Support was listed at 1717-1727 and the low so far today is 1728 spot gold.

Trades – Currently long Gold from 1738 Feb Gold — (stop is the same as listed last night on website and additional buy order is the same)

London Gold Fix $1,744.00 -$6.00

The gold market started on a slightly weaker track this morning in US trade and that is somewhat discouraging to the bulls, especially in the face of higher equity market action. In other words, a slight risk on environment hasn’t resulted in initial gains in the gold market. Perhaps the gold market is looking ahead to the news following a meeting between French and German leaders later today. The Euro situation is by no means solved and this is another major week. There’s a EU summit on Thursday. Merkel and Sarkozy stated today that things cannot continue the way they are. USA sec Geithner is heading to Europe.

The gold trade overnight was tossing around the idea that gold wasn’t seeing much in the way of physical buying and that news was joined by talk that Indian seasonal gold demand might have been undermined by price pressures. In fact, with reports that Indian November gold imports might have declined by as much as 20 tons, the talk of soft demand was given added credence overnight. In the end, a softer start in the face of higher equities, a weaker dollar and initial gains in silver prices, suggests that gold might want to see something even more positive from the Euro zone lunch meeting between the French and Germans. ITALIAN bonds are below 6% THIS MORNING.

While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally higher this morning. US equity markets are open with another 150 point rally in the DOW. The US Dollar is moderately weaker against most of the major’s this morning. German Chancellor Merkel and French President Sarkozy will meet today to discuss ideas for EU fiscal integration. The Italian government announced 30 billion Euros of new austerity measures over the weekend. Euro zone Retail Sales during October were up 0.4%, higher than projections. Euro zone service industries during November was at 47.0, slightly lower than expectations. German service industries during November was at 50.3, lower than forecasts. Major US economic numbers to be released this morning include October Factory Orders and non-Manufacturing industries at 10:00 AM.

Going to the Chart

The gold chart today shows the price pattern has coiled up into a wedge and first resistance at the 1755 area has held and so has the first weekly support at 1727 as both those price have covered the price range so far today. This leaves gold in a somewhat neutral stance today and market players are waiting for the next move. Short term trends still favor higher prices this week but so far today gold has take a back seat. Support remains 1717-1727 and resistance is at 1757-1767. In summary, gold weakness today is surprising given the fact that equities are up strong and the US dollar down. Perhaps there might be some metal hesitation as the CFTC is meeting this morning and the “MF” rule was approved. Italy and Ireland new austerity measures this morning might also had added to hesitation. Until price gets out of the trend line wedge, the trend so far this week is neutral and the support and resistance remain the same.