13th september Gold Trend Analysis

In last nights website update — resistance was listed at 1836-1851 and the high so far is 1836 in spot. Support was listed at 1808-1815 and that was broken — 2nd tier was listed at 1783-1794 and the low was 1791.

Trades — I have no orders at the moment


London Gold Fix $1,806.00 -$37.00

The gold market ran up to the 1836 area but once London opened up the trade seems to have raided gold again, and by doing so, the bull’s have to be somewhat discouraged. With funding rumors swirling toward a large French bank overnight, a less than impressive Italian auction and ongoing declines in global equity markets, one could have expected a move to quality support for gold prices this morning. However prices were raided and pushed down to the 1791 area — matching the lows we saw on the last raid. IT was a full 45 dollars — and 27 dollars of it occurred in five minutes.

While the US dollar has generally remained in favor, the lack of a fresh upside breakout in the greenback probably keeps the dollar in the 76-77 area.

The press is still noting some buying interest on declines in gold prices and that probably served to hold that December gold support around the last two week’s low of $1,793.80 on the charts. Some traders are suggesting that German official dialogue in support of Greece is serving to undermine safe haven interest in gold, while others think that a lack of a run away crisis in the Euro zone is simply prompting long liquidation of gold positions. I DISAGREE with both positions —- the Euro crisis is escalating and any agreements on bailouts will ultimately be bullish for gold. The CARTEL can certainly raid whenever they want.

With weaker global equities again overnight, it is possible that gold selling to fund equity margin calls will be a story circulated in the press again today — but I dont believe it has any validity.

While equity markets in Asia were mixed during overnight trading, stock indices in Europe are generally weaker this morning. Early indications are that US equity markets will open with moderate losses later on today. The US Dollar is moderately weaker against most of the major currencies this morning, although posting a gain versus the Pound. French CPI during August was up 2.4% year-on-year, higher than market forecasts. UK CPI during August was also up 4.5% year-on-year, in-line with projections. The UK Trade deficit during July was 8.9 billion, a larger deficit than expectations.

Going to the chart

Price is very volitile and has been all over the map on today. As high as 1836—as low as 1791 — back up to 1830 and recently down to 1812. It still seems like an unstable situation. The 1810 area we discussed last night on the web has shown to be SOLID SUPPORT since the 1791 raid in London. This 1810 – 1812 area has held on three diffferent tests since then.

In SUMMARY — If your looking to Long the market —- this is the one area we mentioned last night that has potential. The stop would have to be 1783 intra day. With the situation and the chart pattern —- gold looks like it is trying to make a low here near the 1810-1812 area. IF you long it — 1783 is the best stop I see. SHORT TERM trends are due to bottom and turn higher in the next 48 hours (on average) and that also lends to a potential short term low in this range.



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"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."