5th january Gold Trend Analysis

Last nights website update listed resistance at 1618-1626 and the high was 1625. Support was listed at 1588-1601 and the low so far is 1597.


Silver trade missed by a few cents this morning from going long so far.

London Gold Fix $1,614.50 +$11.50

The gold market seems to have diverged with the rest of the metals complex and some traders think that is due to rising US/Iranian tensions. Clearly gold has seen its commodity market track altered of late and at times gold also seems to be trying to discount action against the dollar, which made an new high this morning.

With Iran suggesting they will retaliate in the event that new sanctions harm their economy and with the new sanctions supposedly designed to target Iranian oil sales, there would seem to be a good potential that fully enforced sanctions will indeed impact the Iranian economy. With the EU agreeing to the new sanctions yesterday and portions of the energy complex higher yesterday, it did appear as if gold was at times tethering itself to oil prices.

Many gold bulls are hopeful that the US economic data this morning, will also benefit their case. In an interesting twist gold seems to be tracking some move to quality themes but at the same time the market also seems to need positive numbers just to sustain the mostly positive price track of the last four trading sessions.

Equity markets in Asia were stronger overnight but they did fade into their closes. European stocks this morning were generally weaker, while US equity markets were positing moderate losses to start the Thursday US trading session. The US Dollar has started out higher against the euro and it was also strong against the rest of the majors. Overnight the market saw generally favorable Euro zone economic readings and it would seem like the French debt auction was carried out without too much overall angst. In looking ahead, the markets saw a series of ADP readings, weekly claims figures from the US and an ISM Non Manufacturing data point. ISM came in below expectations, and ADP much higher than expected, but probably due to seasonal hiring.

Going to the Chart

The bounce from last week that we were looking to pullback into the reports did play out coming into this morning. We’re still not sure if we’re going to get a high point in price next week —or if this pullback continues into Friday or early next week. If we make a low into the 9th of the month, it would favor a move higher into the last week of January. If we get a peak there, it will suggest lower. At the moment, the chart s favors the bounce from last week peaked early this morning and is pulling back in typical Thursday fashion. At the moment, it still looks like price can support at the lower gann line near 1575-1580. If we get a pullback to that area, we think price will find support and will be a consideration for a long. We’ll follow up on the website tonight.
Resistance is the 1613-1618 area for the remainder of the day —and support is the 1575-1580 area. There is minor support at 1595. In sum — the pullback has developed, but we’re not sure it has more to go. The bounce trend is still up. I’ll email if i see a set up. With the EURO down hard — and the dollar up hard, I don’t want to be overly bullish here just yet. If we get a pullback towards 1575 — I’ll look for support there over the next few sessions



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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."