23rd november Gold Trend Analysis

In last nights web update resistance was listed at 1715-1722 and the high was 1710. Support was listed at 1672-1682 and the low so far is 1687.


Long gold from 1674 — sold 1/2 at 1687 — Intra day Stop is now 1674 SPOT GOLD.


London Gold Fix $1,686.00 -$11.50

December gold and everything else (except the US DOLLAR) are much weaker and the bull’s hope for strong enough US scheduled data flows to offset what seems to be a deteriorating Euro zone debt crisis did not play out as data was weak. The German bond auction did not go over well either and since then the markets have been under pressure.

Not surprisingly, gold prices overnight were unable to benefit from favorable Indian gold demand talk and that highlights the markets tunnel vision on the EU crisis. At times yesterday, gold seemed to be rising like a move to quality instrument, but some traders suggested that some of the optimism toward gold yesterday might have been the result of news of a meeting Thursday, of top EU officials, as that in turn fostered talk of renewed efforts to implement a Euro bond scheme. In the mean time, gold is likely to take direction from US equities as the status of the sovereign debt crisis looks to dominate gold market sentiment. While protests continue in Egypt that situation is thought to be causing only minor pressure on gold prices. Some traders think the heavy slate of US data will simply be a sideshow, with a limited impact on gold prices today. With scheduled US data overtly weak, it has enhanced the initial control held by the bear’s in gold to start the trade today. While equity markets in Asia and Europe were mixed during overnight trading, US equity markets are open with 130 point losses today. The US Dollar is stronger against most of the majors this morning. There are reports that Belgium has asked to renegotiate the bailout of Franco-Belgium bank Dexia that in turn could place more of a burden on France. Today’s auction of German 10-year Bunds failed to receive bids for 35% of the maximum sales target. Chinese manufacturing was at 48.0, lower than expectations. Euro zone Industrial Orders during September were -6.4%, much weaker than market forecasts. German manufacturing during November was 46.9, also lower than market expectations. The final leg of the Treasury’s refunding, the 7-Year Note auction, will have results announced at 1:00 PM.

Going to the chart

Gold got right to the first resistance area just above 1700 but was unable to hold and consolidate. The New York pullback below the 1683 area (the lower blue dotted line) was disapointing. The difficulty with analysis this morning is volume are low and with USA Closed on THURSDAY —- the “boyz” could have a perfect time to manipulate the markets.

Support is the 1666-1674 area and pressure is on all markets as the Debt situation continues to escalate. Add in bad economic numbers this morning for USA and a move to the US DOLLAR. The potential for markets to sell off hard and for gold to move to 1625-1650 can’t be excluded. It will take a CLOSE above 1705 in order to take pressure off. A short term low is due this week in gold. In sum — the sell off is hard in markets are players move to the sideline as USA is closed tomorrow. UNTIL WE SEE A CLOSE ABOVE 1705 —- the downside still has potential.

From a trade perspective — i have my STOP IN at 1674 —— and I AM EXITING ON THE CLOSE IF NOT STOPPED OUT DURING THE DAY.



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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."