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29th november Gold Trend Analysis

Last nights website update listed resistance at 1717-1725 and the high so far today is 1717.50 — support was listed at 1697-1705 and the low so far today is 1703.50

TRADES

Long gold from 1705 Spot Forex (FEB futures 1710.20)
Sold 1/2 at 1717 Spot Forex (FEB FUTURES 1720.20) per website update.
Holding the remainder for the moment —————– Stop intra day at 1683 SPOT FOREX

LONG SILVER from 32.02 BASIS MARCH —- See website for Sell and stop instructions.

CME NEWS

London Gold Fix $1,717.00 +$3.00

At least to start today the news flow from the Euro zone has remained positive, with auction results this morning floating necessary debt supply and yields on those instruments apparently not high enough to rekindle a selloff. There are some traders that are hopeful of fresh rules for leveraging the EFSF today, while others simply hope that the next layer of support for Greece will be confirmed from the EU summit.

LATE BREAKING NEWS just before this update on Bloomberg seemed to indicate that EFFORTS TO EXPAND EFSF FUND have so far fallen short —— interestingly the markets did not tank on the news. This puts more pressure on ECB to step up. THIS REMAINS A KEY ISSUE —- Finance ministers meet TONIGHT.

Since the gold trade seems to be focused on the prospect of improved gold demand in the event that the EU manages to hold together, the gold market might not be undermined by news of an increase in gold production from Russia overnight, which managed to rise by more than 5% in the first ten months of this year. Perhaps predictions that Chinese gold demand will make that country the world’s largest gold consumer next year, is countervailing the news of higher supply from Russia. However, gold has recently settled into a commodity market focus and that in turn means the bulls probably need a risk on environment to further the upside. With a risk on vibe in place to start today and the markets seemingly accepting the Euro zone debt auctions news without renewed selloffs, the bulls might be able to get beyond the European trade hours with a slight edge.

However, there is an EU summit in session and the trade generally thinks late breaking statements from that meeting will contribute to the risk on tilt. On the other hand, seeing the Germans are against a Euro bond issue or serious conflict on leveraging the EFSF could change the initial bias in financial markets quickly. In the US trade today, the market could see countervailing scheduled data points, with the market potentially seeing the rise in Consumer Confidence, as a simple extension of the favorable retail reports from last week, while weakness in home prices might suggest that trouble continues in the US housing sector. There will also be a series of Fed Speeches today and traders will be on the lookout for hints at more QE from the US Fed.

While equity markets in Asia and Europe were generally higher during overnight trading, US equity markets are open with moderate gains today. The US Dollar is weaker against most of the major’s this morning. Euro zone finance ministers will meet today to agree on how to leverage their emergency bailout fund and to approve their next aid tranche for Greece. Ratings warned that the US would receive a rating downgrade if there was no “credible plan” to lower the budget deficit by 2013. Japanese Unemployment during October was 4.5%, higher than expectations. Japanese Retail Sales during October was up 1.9% year-on-year, higher than forecasts. Euro zone Economic Sentiment during November was 93.7, slightly below expectations. Major US economic numbers to be released this morning include Home sales at 3.6%, Consumer Confidence came in at 56 from 49 and store sales will also be released during the session today.
Gold is making the attempt to continue yesterday’s turn around and is again testing resistance at 1717-1720 SPOT. If gold can close above the dottend downtrend line it will add to the upside potentail and suggest next resistance at 1737-1740 will be tested. Minor support is forming at the 1700-1705 area (50 day average is 1705) and as long as price is above that zone favor higher. WHAT WE need now is to take out that dotted trendline to get to the next area of resistance. With uncertainty in Euro zone — that might be difficult today. The one thing to watch out for today might be a late day fade —– so keep an eye on that. With 1/2 the position sold on the long from last night — at least that gives us some cushion.

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."