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8th november Gold Trend Analysis

Last nights website update listed resistance for gold at 1798-1805 and the high so far today was 1798 spot Forex. Support was listed at 1768-1777 and the low so far today was 1784 spot Forex.

Trades

Currently Long 1 gold at 1724 —- NEW INTRA DAY STOP —- 1774 spot Forex
( I’m concerned about a short term top —- and i’m tempted to exit this short term trade — I will email if I do) ONE STRATEGY for nimble traders— would be to sell at 1795-1798 — and re-enter if we close above 1800 —— which would target 1820-1840)

Long 1 Silver at 32.87 —- NEW INTRA DAY STOP 33.58 spot Forex

CME NEWS

London Gold Fix $1,794.00 +30.00

The gold market remains in a move to quality mode this morning and that isn’t that surprising when one considers the state of flux in leadership in both Greece and Italy. The gold market didn’t seem to be markedly undermined by news of rising Chinese gold production overnight from the China Gold Association, perhaps because that news was also accompanied by predictions that Chinese gold demand would reach up toward 700 tons in coming years. With the headline flow from China pointing to an increase in 2011 gold production, above the 350 ton level, that potentially bearish news was countervailed by predictions that Chinese gold bar investment would also jump to as much as 270 tons in 2011. In the end, the net shake from the Chinese gold news overnight, was the vibe that Chinese gold demand would continue to grow and it could possible outstrip domestic supply. In the short term, move to quality issues from the Euro zone look to trump supply and demand news, but typically Chinese demand news tends to have a fairly long shelf life, especially if the recent pattern in gold prices has left the market in a mostly bullish bias.

While equity markets in Asia were mixed during overnight trading, stock indices in Europe are higher this morning. US equity markets are open with slight gains. The US Dollar is slightly weaker against most of the majors this morning. Italian Prime Minister Berlusconi denied rumors that he was resigning. The German Trade surplus during September was 15.3 billion Euros, higher than market expectations. UK Industrial Output during September was unchanged, slightly below market forecasts. The first leg of the Treasury’s refunding, the 3-year note auction, will have results announced at 1:00 PM. The only major US economic numbers to be released today are store sales released during the session. ITALIAN BONDS ARE STILL ABOVE 6.5% and are near danger zone. The market is watching 7% as a key threshold. Italy has 200-300 billion Euro debt coming due in 2012. Italy debt is the world’s 4th largest. The concern is how much is coming due in 2012. The VOTE comiing on the parliment BUDGET has just been released —–and has passed. —- CURRENT RATE 6.6% this morning in the 10 year bond.

Going to the chart

Today’s chart is the monthly cycles we follow. The market is due for the blue dominant trend to begin this week. All thru the bull market the blue dominant circle would arrive near the lows of the month. That changed with the correction in gold during September. The last two months has produced price highs at the blue dominant circle and price lows at the weaker Red circle trend. Statistically, there is a 75% chance that gold makes a short term peak this week during its monthly “window” — so I am very cautious with gold at resistance here near 1800. We hit 1797 again today in spot Forex over the last hour — and with RESISTANCE at 1798-1803 — it is an area of concern. Over the last 24 hours, each dip under 1790 has been supported, and although you can’t see it on the daily chart — there have been four dips in the past 24 hours that have supported. RESITANCE REMAINS AT 1798-1803 —- and is one of the price points that has a potential of providing a weekly top. A close above 1800 would keep things going into Wednesday.

In summary — the trend is still up —-but price is at weekly resistance and short term trends are due to turn this week. SUPPORT FOR THE REMAINDER OF THE DAY IS THE 1780-1784 area —- and watch 1796-1803 for resistance. I’ve moved my stop up again on my long. I’m tempted to exit here — but want to give gold the opportunity for one more push. IF the next test of 1795-1798 fails today — it will add to the potential of a high point for the week. I WILL EMAIL IF I EXIT — as I don’t want to give up the nice gain on this trade. For the moment — i’ve lifted the price stop to 1774 and will see how price reacts near this 1795-1798 area.