Nov 30, 2010
ការវិភាគបែបបច្ចេកទេស
The trading range for today is among the key support at 1320.00 and key resistance now at 1395.00.
The general trend over the short term basis is to the downside, targeting $ 1208.00 per ounce as far as areas of 1465.00 remain intact.
Support 1362.00 1355.00 1350.00 1339.00 1330.00
Resistance 1372.00 1380.00 1385.00 1395.00 1406.00
Recommendation Based on the charts and explanations above our opinion is, selling gold around 1368.00 targeting 1320.00 and stop loss with a daily closing above 1385.00 might be appropriate.
ពត៌មាននិងការព្យាករណ៏តំលៃមាសសំរាប់ថ្ងៃ ៣០វិច្ជិកា
Gold Finished with Minor Gains as Stronger Dollar Capped its Gains
| 30 Nov 2010 | 1st resistance | 2nd resistance | 3rd resistance |
| Today’s resistance US$ | 1372 | 1379 | 1389 |
| | 1st support | 2nd support | 3rd support |
| Today’s support US$ | 1356 | 1346 | 1340 |
| Today’s pivot point US$ | 1363 | | |
The Day’s Story:
Gold finished marginally higher on Monday in a quiet trading. An earlier dip in prices saw some bargain hunting as well as some fresh safe haven buying which drove the prices back above in positive territory. Any further upside was limited due to stronger U.S dollar which rose to a fresh two months high against its European counterpart. Gold peaked to its all time high of $1424 an ounce on November 9th after FED announced its QE2 package details. Yellow metal has since come off those levels and went into a shallow correction falling down to $1314 levels but has regained some of its lost ground in recent days as European debt crisis made headlines again. Geopolitical tensions in Korean Peninsula are also bullish for gold due to its status as a hedge against crisis but there has been a muted reaction to that news so far. In December, gold has risen 7 out of last 10 years and is up by 25% this year. Gold has managed to rise 32 out of 47 weeks so far in 2010.
Main U.S indexes finished lower but a late rally in U.S stocks helped trim most of their intraday losses. The Dow Jones Industrial Average closed down 39.51 points or 0.36%, to 11052.49. Standard & Poor's 500 declined 1.64 or 0.14%, to 1187.76 and Nasdaq Composite fell 9.34 or 0.37%, to 2525.22. European debt worries weighed most on the stocks as traders remained concerned about debt situation in Eurozone despite Irish bailout. No major economic data was released on Monday. In other news President Obama announced a pay freeze for Federal employees for next two year hoping to save $2 Billion in 2011. Some concerns were also shown at latest confidential data released by WikiLeaks as it could be damaging for U.S and its strongest allies. Stocks in Europe fell sharply with main indexes losing over 2% of their value.
We expect some sharp movement in gold price as market will have a lot of economic data to digest this week. Some of the major U.S. economic reports on the calendar this week include the Chicago Purchasing Managers Index and consumer confidence today, the ADP private-sector employment report and Institute for Supply Management’s manufacturing survey Wednesday, jobless claims Thursday and the monthly jobs report and ISM service-sector survey Monday. The Monday Non-Farm payroll report which is the arguably the most
Important economic report for financial markets will give further clues about U.S jobs market which is still hovering near double digit unemployment rate despite official data indicating U.S economy out of the recession. Market is expecting non-farm payroll numbers to rise by 165,000 in November. Better than expected numbers could help stocks to resume their uptrend enabling bullion to tag along as well. A disappointing jobs figure could trigger safe haven buying interest in gold so gold may remain supported regardless of the outcome on Friday.
U.S. dollar index enjoyed decent gains to start the week. Technical analysts suggest the dollar index has put in a near term market low due to a boost in its safe haven demand at the back of crisis in Europe. Dollar was favored by ongoing Eurozone debt issues which have damaged European common currency in recent weeks sending it to fresh two months low against dollar on Monday. Stronger greenback also put a lid on gold’s gains for most of the Monday’s session as inverse correlation between the two assets is strengthening after erratic couple of weeks. Gold and Dollar move in opposite directions to each other due to their inverse correlation as dollar weakness enhances demand for dollar denominated assets fro holders of other currencies. Both however, can travel in the same direction at time of heightened economic uncertainty as was the case in first half of this year during Greece’s debt crisis. Similar trend has been seen during last few days as European debt crisis resurfaced. Adding fuel to fire was escalating military tensions between two Korean neighbors which boosted safe haven demand for both gold and greenback.
Feud between North and South Korea has escalated as both sides accusing each other for initiating the recent conflict although China has stepped in to calm the tensions but it will remain a critical issue until situation is fully resolved. European debt concerns are just not going away despite $112.5 Billion Irish bailout package. Gold has been favored by European debt contagion fears during most of this year. At time both gold and dollar moved in same direction breaking away from their organic inverse correlation relationship. In latest developments focus has shifted from Ireland to Portugal and much bigger player Spain as they could be next in line to ask for help. Questions that raise in minds are how badly affected these countries are and what other countries are going to be added to that list as most countries do have debt issues to some extent. It will be impossible to bailout all those countries if situation gets worse so steps must be taken to contain and address the issue in a manner that these kinds of disasters could be minimized in severity or stopped altogether in future. Until market is satisfied with such a solution, gold price will remain well supported.
Gold price started first session of the week with some losses and came under further selling pressure during early Asian trading hours. Gold fell to its intraday low of $1353 an ounce during that period but bargain hunters once again bought the latest dip in prices lifting gold up to its breakeven level late in Asian session. Gold visited positive territory for a brief period during Early European trade but fell back into red zone once again as stocks in Europe slumped. Gold fell close to its intraday low as markets in U.S started their trading day but quickly turned around and pared its losses during rest of the session. Gold managed to finish its day with minor gains at $1366.2 an ounce compared to its previous close of $1362.8 an ounce.
Other Metals:
Silver futures for March delivery closed up 42 cent to $27.19 an ounce on Monday.
Platinum futures for January delivery fell $0.60 to $1,644.60 an ounce on NYMEX.
Palladium futures for December delivery rose by $16.50 to $693.00 an ounce.
N.Y. Copper for March delivery closed up 1 cent to $3.77 a pound on Monday.
Gold (News and Views):
February Comex gold closed up $3.20 at $1,367.50 an ounce on Monday. The London P.M. gold fixing was $1,357.00 on Monday compared to its previous P.M fixing $1,355.00. The world’s largest gold exchange-traded fund, New York’s SPDR Gold Trust, said its holdings rose by 3 tons to 1285.084 tons on November 22 down from 1289.336. The dollar index, which measures the U.S. currency against a basket of six major currencies, rose by 0.46 To 80.81 on Monday. Crude Oil for January delivery rose by $1.97 to $85.73 on Monday on New York Mercantile Exchange. Gold hit its true peak on Jan. 21, 1980, when it rose to $825.50 an ounce. Adjusted for inflation in 1980 dollars, that translates to an all-time record of $2,184.08 an ounce, in 2010 dollars. The net length of managed-money accounts fell from 229,543 lots for futures and options combined on Oct. 12 to 173,067 as of Nov. 16, the cut-off date for the most recent weekly data from the Commodity Trading Futures Commission. This was the first drop below 200,000 since August.Factors Affecting Gold Price Yesterday:
"You have seen moves in the currency markets that are offsetting, to an extent, the sovereign concerns," said RBS Global Banking & Markets analyst Daniel Major.
"The stronger dollar ... has clearly put pressure on gold, and offsetting that you have people looking towards gold as ahedge against potential devaluation of currencies, and debt levels, and potential defaults," Major added.
UBS analyst Edel Tully said in a note that the brokerage’s physical gold sales to top bullion consumer India last Friday were the largest since Oct. 27, when gold prices slipped.
"This is a strong indicator that there's much residual physical demand in the system that will provide ample support on dips," Tully added.
If your currency is declining in value, there’s a move to get into something that will hold its value, and gold is that instrument at the moment,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago.
Gold’s gains may be limited because “a big head-and-shoulders top is forming on the daily chart,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “People are shying away from gold.”
“The focus is shifting from Ireland [and] people will be looking at Portugal, Spain, and so forth,” said Andrey
Kryuchenkov, an analyst at VTB Capital in London. “The situation in Europe is not getting much better.”
Gold Future Outlook:
Comex gold could be “sloppy” for a while but eventually may rise “more convincingly” whenever the dollar falters again, says MF Global. Gold hit record highs in early November, but then retraced as the dollar strengthened. More recently, gold has decoupled some from its inverse relationship to the dollar, with two often rising in tandem as safe havens. MF Global notes there is “no letting up” on investment demand for gold, with the world’s exchange-trade products now holding nearly 2,100 metric tons, equivalent to roughly nine years of U.S. mine supply. Still, there are signs of retail demand flagging due to high prices. Going into 2011, MF Global says it is “friendly” to gold on an inflation-adjusted basis. “Shorter term, the next month or two might be sloppy,” as the European debt crisis may intensify and channel money into the dollar, MF Global says. “It will only be when the dollar starts to weaken will we see gold prices move up more convincingly,” MF Global says.
Standard Bank says that a second round of quantitative easing by the Federal Reserve is already fully priced into a gold market at $1,360 an ounce. Still, the bank favors buying gold on any price dips. “Given our view that gold is pricing QEII already, we cannot use the QE argument to justify a higher gold price,” Standard says in a research note. “However, the same argument would suggest that any sell-off in gold from here would indicate the metal is undervalued relative to gold’s casual drivers.” Standard lists three supportive factors. Independent of the Fed’s QE, global liquidity should continue rising in 2011. Also, whereas scrap gold came into the market in early November when were above $1,400, the latest price decline spurred renewed physical buying, the bank says. Also, sovereign-credit risk in Europe remains supportive for gold. “As a result, our preferred strategy…is to buy gold on dips,” Standard concludes. “We also believe gold in euro terms should outperform gold in dollar terms.”
Newsletter writer Dennis Gartman says he continues to favor holding gold, although in currencies other than the U.S. dollar. “We are convinced, as we have been for months, that the driving force behind gold’s strength is not inflation nor dollar devaluation, but the simple notion that gold has become the world’s third most popular ‘reservable’ currency’ and that it will soon move past that of the EUR into second place,” he says in the daily The Gartman Letter. “More properly, we should say that gold shall continue to gain upon the EUR as the propensity on the part of reserve bank asset managers to hold EURs shall weaken at the margins, while their propensity to own gold shall rise. These are tectonic plates shifting very, very slowly but doing so inexorably.”
Precious metals prices experienced some weakness lately as the U.S. dollar rallied following tensions in the Korean Peninsula and the latest round of euro-zone debt-crisis management, says Morgan Stanley. “Looking into next year, we expect that inflationary fears in emerging markets will positively influence the physical demand for gold in the form of bar hoarding in the Middle East. Furthermore, gold should find support from jewelry industries in India, China and Southeast Asia, where improving economic conditions are driving demand for conspicuous luxury items.”
Technical Analysis (By Jim Wyckoff):
Technically, February gold futures prices closed nearer the session high Monday. The gold market bulls have the near-term technical advantage. A four-month-old uptrend is in place on the daily bar chart.
Bulls' next near-term upside technical objective is to produce a close above technical resistance at the October high of $1,389.50.
Bears' next near-term downside price objective is closing prices below solid technical support at $1,340.00. First resistance is seen at Monday's high of $1,370.00 and then at $1,375.00.
Support is seen at Monday's low of $1,354.50 and then at $1,350.00.
Wyckoff's Market Rating: 7.0.
More Technical Analysis:
In the daily chart below we can see gold Price bouncing back from Upper Bollinger band and now hovering just below Bollinger middle band which sits along with rising trend line support (now resistance). Price did breach these levels but quickly bounced off. A successful break above these levels is needed for gold to maintain its bullish stance in short to medium term.
A Head & Shoulder pattern is forming on daily charts which can be seen on chart below. If price manages to break below its neckline provided the complete formation of the pattern, we are in for more losses and could see price to fall below $1300 levels.
Some analysts pointed to a potential head-and-shoulder pattern as a bearish technical explanation for why gold did not rally strongly on concerns about the fiscal health of euro zone economies and rising tensions on the Korean peninsula.
However, Adam Hewison, president of MarketClub.com, said the trend of the MACD momentum indicator model is "really starting to turn up" on gold charts, and the fact that the MACD came down from an oversold level suggests the odds for a bearish head-and-shoulder move is low.
"If we see a little more strength today or tomorrow, we will see that bullish MACD crossover. I think that could be the first indication that we'll see another good viable move to the upside," Hewison said.
Most of the indicators we use are painting a rather mixed picture on daily charts. Slow Stochastics suggest
Overbought conditions on daily chart and Friday price fall was in line with slow Stochastics.
RSI is in a neutral territory and have some way to go to reach over bought levels. RSI is also sitting just below its short-term resistance level and will have to successfully breach this level to resume its uptrend.
MACD is still hovering in bullish zone but well off its earlier levels. MACD line is travelling towards Zero and with falling histograms we can see the current uptrend losing its steam.
1378-82 area is to watch for in coming days as critical resistance level, a successful break above this level will call for $1400.
Price will find support at $1348-51 levels and break below it can call for $1320-25 level, a major support area.
Daily Gold and Silver Expected Range:
Gold: US$1348- $1382
Silver: US$26.40 - $27.70
Morning News
-Japan's jobless rate rose 5.1% during the month of October, showing an increasing compared with a previous reading with 5.0% in September, while the expectations referred to 5.0
-The South Korean economy released its annualized service industry output index for the year ended October, which release with the actual reading 3.0%, compared with a previous -0.7% a year earlier
-The South Korean economy released its annualized service industry output index for the year ended October, which release with the actual reading 3.0%, compared with a previous -0.7% a year earlier
-The European currency remains slightly weak so far throughout the currencies market trading knowing that it fell to the lowest level in more than two months against the U.S currency and the yen since that the 85 billion-euro aid package for Ireland failed actually to stop and minimize worries and concerns that the present European debt crisis will stop extend within this coming period, which of course will slow down the global revival from the unending recession.
-The U.S president Barack Obama is set today to announce of a two year pay freeze for civilian federal employees. The pay freeze strategy is one of the methods the U.S government is taking in order to cut on expenses and save the economy from the turmoil.
-The European shared currency fell against the dollar as Ireland’s bailout plan failed to ease investor’s fear regarding the debt issues in Europe.
-Retail websites are getting reading for the much-awaited “Cyber Monday” to draw as much buyers as possible with various promotions. Cyber Monday is for online shopping like Black Friday for retail stores...
-The Canadian economy released this morning some gauges regarding its manufacturing sectors' performance during October which came in cheerful and above expected levels.
-The Canadian economy released this morning its Current Account figure regarding 2010's third quarter where it dropped from the prior revised reading of -13.0 Billion CAD to reach -17.5 Billion CAD, which is a deeper deficit than the expected -15.3 Billion CAD.
-The start of the new week with the final approval of 85 billion euro aid package to Ireland seemingly failed to convince markets of the measures worthiness as the euro dwindled further south to a two-month low versus the dollar.
-The European Commission released its quarterly growth forecast today, expecting that the European economy to suffer next year as government’s around the union imposed budget cuts to put a cap on the ballooning deficit they face, which would weaken growth in the region as it would curb exports.
-The web site WikiLeaks released new cables on Sunday that were attacked to become invisible, yet it was posted by some organizations.
Nov 29, 2010
ការវិភាគបែបបច្ចេកទេស
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| ការវិភាគបែបបច្ចេកទេស |
The weekly chart shows the proposed Elliott count that has been respected as well as it seems that gold was capped out before1430.00 zones over short term basis, recording 1424.00 as an all-time high. The fourth wave is still in favor and thus, the bearishness might dominate the movements during this week, targeting 1291.00 as a first technical objective for this wave. Momentum indicators are still negative, supporting our outlook. A daily closing above 1395.00 will weaken this scenario and we recommend following us in the upcoming reports to study the internal structure together.
The trading range for this week is among the key support at 1291.00 and key resistance now at 1406.00.
The general trend over the short term basis is to the downside, targeting $ 1208.00 per ounce as far as areas of 1465.00 remain intact.
Previous Report
Support 1358.00 1350.00 1339.00 1330.00 1320.00
Resistance 1372.00 1380.00 1385.00 1395.00 1406.00
Recommendation Based on the charts and explanations above our opinion is, selling gold around 1370.00 targeting 1291.00.00 and stop loss with a daily closing above 1395.00 might be appropriate.
ពត៌មាននិងការព្យាករណ៏តំលៃមាសសំរាប់ថ្ងៃ ២៩វិច្ជិការ
Gold Finished Lower as Stronger Dollar Reduced Precious Metal’s Demand
| 29 Nov 2010 | 1st resistance | 2nd resistance | 3rd resistance |
| Today’s resistance US$ | 1375 | 1387 | 1399 |
| | 1st support | 2nd support | 3rd support |
| Today’s support US$ | 1351 | 1339 | 1326 |
| Today’s pivot point US$ | 1363 | | |
The Day’s Story:
Gold finished lower on Friday as stronger dollar reduced the demand of yellow metal as an alternative asset. Gold dropped by almost 2% earlier during the session but managed to pare most of its losses in aftermarket trading hours in a shortened U.S trading session. Gold sell off was triggered as tensions between Korean neighbors escalated. Geopolitical disasters are normally supportive for gold prices but euro weakness along with Shanghai exchange margin hike in metal futures kept gold prices under pressure for most of the session. Gold finished its week in green zone after two straight weeks of losses. Early losses in gold on Friday attracted bargain hunters to take advantage of latest dip in prices who helped gold to trim its losses later in the session. Meanwhile European debt problems remained in the backdrop and focus has started to shift from Ireland to other debt stricken European nations. Gold is already up by 25% this year and has outperformed stocks, currencies and most commodities this year. Gold has managed to rise 32 out of 47 weeks so far in 2010.
U.S market fell sharply as market marked an early close a day after Thanksgiving holiday. The blue-chip Dow Jones Industrial Average fell 95.28 points or 0.85% to 11,092.00 while S&P 500 index, a broader measure of the market, fell 8.95 points or 0.75% to 1,189.40 and NASDAQ shrank by 8.56 points or 0.34% to 2,534.56. Concerns about Chinese economy heating up due to inflationary pressure, military tensions on the Korean Peninsula, and Europe's debt woes weighed on US traders coming back from the Thanksgiving holiday. No significant data was on the cards from U.S on Friday so traders took their cues from European markets which also ended deep in red due to mounting debt fears in Portugal and Spain after bailouts in Greece and Ireland. Ireland finally agreed on a bailout package from IMF and Eurozone over the weekend.
We expect some sharp movements in gold price as market will have a lot of economic data to digest this week. Some of the major U.S. economic reports on the calendar this week include the Chicago Purchasing Managers Index and consumer confidence on Tuesday, the ADP private-sector employment report and Institute for Supply Management’s manufacturing survey Wednesday, jobless claims Thursday and the monthly jobs report and ISM service-sector survey Friday. The Friday Non-Farm payroll report which is the arguably the most
Important economic report for financial markets will give further clues about U.S jobs market which is still hovering near double digit unemployment rate despite official data indicating U.S economy out of the recession. Market is expecting non-farm payroll numbers to rise by 165,000 in November. Better than expected numbers could help stocks to resume their uptrend enabling bullion to tag along as well. A disappointing jobs figure could trigger safe haven buying interest in gold so gold may remain supported regardless of the outcome on Friday.
U.S. dollar index enjoyed decent gains to finish the week, sending European common currency to its 3 months low during the session. Dollar continued to benefit from worsening debt situation in Europe. Dollar index and spreads on peripheral euro zone bonds widened against the 10-year German Bund as investors focused on the possibility of euro zone debt crisis spreading to other debt stricken nations in European Union. Gold remained under pressure due to stronger greenback for most of the Friday’s session as inverse correlation between the two assets turned positive after erratic couple of weeks. Gold and Dollar move in opposite direction to each other due to their inverse correlation as dollar weakness enhances demand for dollar denominated assets as it makes them cheaper for holders of other currencies. Both however, can travel in the same direction at time of heightened economic uncertainty as was the case in first half of this year during Greece’s debt crisis. Similar trend has been seen during last few days as European debt crisis resurfaced. Adding fuel to fire was escalating military tensions between two Korean neighbors which boosted safe haven demand for both gold and greenback. Tensions between two neighbors have escalated over the weekend as South Korea started its military exercises with U.S. China has offered a six nations talks to resolve the matter but until situation calms down in Korean Peninsula, gold will remain well supported due to its status as a hedge against crisis
Gold price started its day with some losses on Friday and remained under selling pressure throughout Asian trading hours. Gold continued its downward journey as markets in Europe started their trading day. Gold’s losses were deepened as European session progressed and fell to its intraday low of $1350.9 an ounce just before the markets in U.S opened for a shortened session. Gold managed to pare almost half of its losses during this session and finished its day at $1363.2 an ounce with a weekly gain of just under 1% after two weeks of losses.
Other Metals:
Silver futures for December delivery closed down 83 cent to $26.70 an ounce on Friday.
Platinum futures for January delivery fell $13.20 to $1,645.20 an ounce on NYMEX.
Palladium futures for December delivery fell $18.90 to $676.50 an ounce.
N.Y. Copper for March delivery closed down 1 cent to $3.76 a pound on Friday.
Gold (News and Views):
December Comex gold closed down $10.60 at $1,362.40 an ounce on Friday. The London P.M. gold fixing was $1,355.00 on Friday compared to its previous P.M fixing $1,373.25. The world’s largest gold exchange-traded fund, New York’s SPDR Gold Trust, said its holdings rose by 3 tons to 1285.084 tons on November 22 down from 1289.336. The dollar index, which measures the U.S. currency against a basket of six major currencies, rose by 0.66 To 80.35 on Friday. Crude Oil for December delivery fell $0.10 to $83.76 on Friday on New York Mercantile Exchange. Gold hit its true peak on Jan. 21, 1980, when it rose to $825.50 an ounce. Adjusted for inflation in 1980 dollars, that translates to an all-time record of $2,184.08 an ounce, in 2010 dollars. The net length of managed-money accounts fell from 229,543 lots for futures and options combined on Oct. 12 to 173,067 as of Nov. 16, the cut-off date for the most recent weekly data from the Commodity Trading Futures Commission. This was the first drop below 200,000 since August. The Shanghai Futures Exchange will increase margins on gold, copper and aluminum after the market closes on Nov. 29 as China moves to curb speculation and damp inflation.Factors Affecting Gold Price Yesterday:
“Normally the headlines from Korea and the lower stock market would help gold, but the weaker euro [is] helping the dollar counters,” said George Gero, metals analyst at RBC Wealth Management, in a note.
Standard Bank sees physical buying of gold on price pullbacks. Risk appetite at the moment appears limited ahead of the weekend. Furthermore, the market is illiquid on a Friday between the U.S. Thanksgiving holiday and a weekend, perhaps leading to more pronounced price moves, Standard says. Gold is one of the commodities on the defensive. “We continue to see net physical buying of gold, especially on dips,” Standard says. “We maintain gold in euro terms will outperform gold in dollar terms.”
“
The main negative factor (for metals) is the firm U.S. dollar, which has risen to its highest level in two months versus the euro,” wrote analysts at Commerzbank in a note to clients. “Furthermore, the increase in the margins for gold futures trading on the Shanghai Futures Exchange is also having an adverse effect.”
“We’ve had people move away from gold today as the euro weakened and the dollar strengthened,” said Bart Melek, global commodity strategist with BMO Capital Markets. “But I think there will be a reversal (higher in gold) even though I don’t expect the dollar to weaken materially at all. I think flows will move back into gold.”
“Bullion prices have been under pressure as a result of the decline in risk sentiment,” James Moore, an analyst atTheBullionDesk.com in London, said in a report. Gold may “remain underpinned by investment bargain hunting as investors look to diversify against the volatile macro-economic and geopolitical background,” he said.
"Gold is ... not really marching to any drum at the moment," said Simon Weeks, trader at London's Scotia mocatta. "I think it's just drifting in thin quiet Friday conditions as the currency markets move," he said, adding that bullion could head lower to between a $1,345 and $1,350 next week.
Gold Future Outlook:
LME base metals weakened, unable to maintain Friday’s gains, with market participants unable to “shake off persistent concerns” about the European debt situation and uncertainty about future Chinese monetary tightening, says MF Global analyst Edward Meir. Also, he points out, the Shanghai Futures Exchange “instituted its own version of ‘tightening,’” when it announced it would raise margins on a number of commodities--including copper, aluminum, steel wire rod, gold, fuel oil, zinc and steel rebar--next week. The euro is seeing little relief in the wake of an Irish loan package, Meir says. There are concerns about debt of other nations, including Portugal, Spain and Italy. The euro could break down below $1.30 against dollar, possibly by next week. If so, this could drag the commodity complex lower, Meir says.
“Obviously, this Korean story is not going to stop,” said Afshin Nabavi, head of trading at MKS Finance. “And the current European banking situation is also going to continue.” Thus, he and others said, gold should find more support.
“Come Monday, we’ll probably have a fresh start,” Nabavi said. “If the tensions continue as they are with North and South Korea, I wouldn’t be surprised if we test the higher end of the range…With the European situation, I don’t think a miracle will happen over the weekend. So the situation will remain. I don’t see any reason why gold should really come off in the near future.”
“I think silver and gold are in a really good position for more upside, not based on the dollar but on what is going on in Europe,” said Bob Haberkorn, senior market strategist with Lind-Waldock, who also looks for gold to tick upward even if the dollar does likewise.
There is the potential for another interest-rate hike in China that could pressure gold in the immediate aftermath, warned Mike Daly, gold and silver specialist with PFGBest.
“But if in fact that does not happen, my feeling is the gold market will trade sideways to higher,” he said. “With everything going on in the euro region, people are using the weaker euro to buy gold to hedge positions or to move to safer havens.”
“That region (Europe) is very fragile, and I think it’s going to move the gold higher long term,” Daly said. This especially may the case since the U.S. economic situation “isn’t fantastic either,” with high unemployment and foreclosures continuing.
Daly also said any actual outbreak of war on the Korean Peninsula would mean safe-haven demand for gold, even if the metal at times is pressured by gains in the dollar.
Technical analysis:
In the daily chart below we can see gold Price bouncing back from Upper Bollinger band and now hovering just below Bollinger middle band which sits along with rising trend line support (now resistance). Price did breach these levels but quickly bounced off. A successful break above these levels is needed for gold to maintain its bullish stance in short to medium term.
Most of the indicators we use are painting a rather mixed picture on daily charts. Slow Stochastics suggest
overbought conditions on daily chart and Friday price fall was in line with slow Stochastics.
RSI is in a neutral territory and have some way to go to reach over bought levels although Friday price move has turned it to the downside. RSI is also sitting just below its short-term resistance level and will have to successfully breach this level to resume its uptrend.
MACD is still hovering in bullish zone but well off its earlier levels. Price is travelling towards Zero line and with falling histograms we can see the current uptrend losing its steam.
1378-82 area is to watch for in coming days as critical resistance level, a successful break above this level will call for $1400.
Price will find support at $1348-51 levels and break below it can call for $1320-25 level.
Daily Gold and Silver Expected Range:
Gold: US$1348- $1382
Silver: US$26.15 - $27.70
Nov 26, 2010
Technical Analysis 26.11.2010
Gold stabilized below the pivotal levels of 1380.00-1385.00, confirming the previous discussed scenario seen on the first image, where the fourth wave is still in favor over short term basis and medium term basis. The second image suggests that the retesting action for the previous broken trend line might have been ended, whilst momentum indicators support this scenario. Additionally, the classical pattern is still under preparation. Consequently, we believe that the bearishness will dominate the movements over intraday basis.
The trading range for today is among the key support at 1332.00 and key resistance now at 1425.00.
The general trend over the short term basis is to the downside, targeting $ 1208.00 per ounce as far as areas of1465.00 remain intact.
| Support | 1368.00 | 1362.00 | 1355.00 | 1350.00 | 1345.00 |
| Resistance | 1375.00 | 1380.00 | 1385.00 | 1395.00 | 1406.00 |
| Recommendation | Based on the charts and explanations above our opinion is, selling gold around 1372.00 targeting 1332.00.00 and stop loss with a daily closing above 1395.00 might be appropriate. | ||||
News and gold strategy 26.11.2010
Gold Finished Marginally Higher in Quiet Trading
| 26 Nov 2010 | 1st resistance | 2nd resistance | 3rd resistance |
| Today’s resistance US$ | 1377 | 1380 | 1385 |
| | 1st support | 2nd support | 3rd support |
| Today’s support US$ | 1370 | 1365 | 1362 |
| Today’s pivot point US$ | 1373 | | |
The Day’s Story:
Gold finished marginally higher in an extremely quiet trading session on Thursday due to Thanksgiving holiday in U.S. Gold was stuck between $1370 and 1374 for most of the session as volumes remained to their lowest levels. Gold price has been supported by military tensions in Korea and ongoing European debt saga this week due to its safe haven demand after two weeks of declines and is up by 1.3% on weekly charts. In absence of any significant economic data or other market moving news traders decided to stay on sidelines ahead of the weekend. Most of the traders will not be returning to work today as some markets remain closed so volume may be thin but some volatility may return to the market. Gold has enjoyed an unprecedented run this year so far and is up by 26% beating stocks, currencies and most commodities.
U.S markets were closed due to Thanksgiving holiday and no economic data was released as a result. Stocks in Europe also experienced a rather quiet day but ended with decent gains with FTSE 100 finishing 0.74% high. CAC40 finished its day with 0.34% gains and DAX30 surged 0.8%. Stocks rallied on Wednesday after a day of massive declines as European debt crisis remain in the backdrop despite an apparent solution to Irish debt crisis. Analysts’ remain wary over debt situation in Portugal, Spain and Italy and wonder which will be the next in line to seek help from IMF and European Union. Gold will remain supported by European debt contagion fears in coming weeks and months.
U.S. dollar index traded near steady levels on Thursday and finished a tad lower after hitting a fresh two-month high. Dollar rose initially against most of the major currencies but could not hold on to those gains and finished marginally lower to end its day. Dollar’s move was unable to trigger a response in gold for most of the session although late declines in greenback did help bullion to stabilize and finished on steady levels. Gold and Dollar move in opposite direction to each other due to their inverse correlation as dollar weakness enhances demand for dollar denominated assets as it makes them cheaper for holders of other currencies. Both however, can travel in the same direction at time of heightened economic uncertainty as was the case in first half of this year during Greece’s debt crisis. Similar trend has been seen during last few days as European debt
crisis resurfaced. Adding fuel to fire was escalating military tensions between two Korean neighbors helping to boost demand for both gold and greenback as safe haven destinations for investors to park their money in.
Traders will also look for China’s further measures to control inflation after last week’s rise in Reserve requirement for its banks. Some analysts had been expecting a hike in interest rates, which would have been more severe, and could still happen in the future. Any steps to fight inflation would weigh on gold prices as the metal is seen as protection against future inflation.
Gold price started its day with some losses on Thursday and fell to its intraday low level of $1367.8 an ounce early during Asian session. Gold stabilized after initial losses and pared its minor intraday losses during rest of Asian session but in extremely quiet trading. Gold was capped in a tight range throughout European session. As markets in U.S were off due to their holiday, bullion remained quiet but steady in final hours of the session. Gold finished its day with marginal gains at $1374.5 an ounce.
Other Metals:
Silver futures for December delivery closed up 1 cent to $27.54 an ounce on Thursday.
Platinum futures for January delivery fell $4.00 to $1,655.95 an ounce on NYMEX.
Palladium futures for December delivery rose by $0.73 to $695.23 an ounce.
N.Y. Copper for January delivery closed up 6 cent to $3.77 a pound on Wednesday.
Gold (News and Views):
December Comex gold closed up $1.00 at $1,374.00 an ounce on Thursday. The London P.M. gold fixing was $1,373.25 on Thursday compared to its previous P.M fixing $1,372.50. The world’s largest gold exchange-traded fund, New York’s SPDR Gold Trust, said its holdings rose by 3 tons to 1285.284 tons on November 22 down from 1289.336. The dollar index, which measures the U.S. currency against a basket of six major currencies, fell0.05 To 79.69 on Thursday. Crude Oil for December delivery was unchanged at $83.86 on Thursday on New York Mercantile Exchange. Gold hit its true peak on Jan. 21, 1980, when it rose to $825.50 an ounce. Adjusted for inflation in 1980 dollars, that translates to an all-time record of $2,184.08 an ounce, in 2010 dollars. The net length of managed-money accounts fell from 229,543 lots for futures and options combined on Oct. 12 to 173,067 as of Nov. 16, the cut-off date for the most recent weekly data from the Commodity Trading Futures Commission. This was the first drop below 200,000 since August.Factors Affecting Gold Price Yesterday:
Gold was trading quietly during the entire day with the US being closed for Thanksgiving, hovering between $1370 and $1374, says a research note from MKS Finance. Concerns over Euro Zone debt issues were the main facts supporting gold today like in the previous sessions, MKS said. “The market was bound in a tight range between $1371.70 and $1374.50 in an extremely thin environment for the entire morning session.
Spreads had also widened considerably as a result across all metals,” it said. Adding support was the news that Vietnam’s Central Bank allowed gold imports into the country in an attempt to bring prices in line with those on the international gold market. MKS anticipates more action tomorrow and a fairly volatile market, “due to the fact that not all market players will be back.”
"It's been the quietest of days ... Gold seems to be consolidating generally and quite resilient," said Peter Hillyard, head of metals sales at ANZ Investment Bank, noting that the market was likely to be quiet until Monday.
"Investors still seem to be of the opinion in general that ... there's generally fear about global economies. There's generally a perception that there's not much you can trust to invest in other than commodities, and that's not just gold."
“Gold is giving back some of the flight-to-safety bid, “said Frank Lesh, a trader at FuturePath Trading LLC in Chicago.“The Korean conflict hasn’t erupted into something bigger yet, and the euro has stabilized.”
"Gold is finding reasonable interest on the dips from investors who are worried about currency debasement, possible inflation at a later stage and we're seeing reasonable physical buying out of India because the wedding season is under way," said Robin Bhar, an analyst at Credit Agricole, who saw gold trading between $1,365-$1,375 in the next two days.
MF Global analyst Edward Meir says he sees some worrisome parallels between current conditions and spring, when European worries hurt a range of commodities, including base metals. In March/April, the U.S. economy was showing signs of perking up, only to be derailed in part by a debt crisis in Europe when problems emerged in Greece. “We seem to be going through the same pattern this time around, and although the crisis has yet to fully play out, some parallels are striking,” Meir says. There are record high yields in the debt market for the “problem countries,” he points out. “Also, just as we saw last spring, the European authorities seem to be sending mixed messages about what to do, although in Ireland's case, they made all the right moves only to be rebuffed, at least initially, by a reluctant borrower,” Meir says. Meanwhile, markets are keeping an eye on China and expectations for more tightening moves to ward off inflation. “All this does not bode well for commodity prices going into the year-end, and we would therefore be reluctant to go long here until a more meaningful correction sets in,” Meir concludes.
Gold Future Outlook:
SEB Commodity Research says its strategic and short-term tactical views on gold remain bullish. Analyst Filip Petersson lists a number of factors helping gold rise lately, including a run for safe-haven assets amid European debt worries and the Korean conflict. Markets have not reacted with relief toward efforts to bail out Ireland, with other nations’ bond yields rallying and the focus turning toward Portugal and Spain. Furthermore, Chinese inflation and a lack of inflation-protected investment alternatives could send Chinese retail investors into gold. “Our strategic gold-market view remains bullish,” SEB says. The tactical view is influenced by
rallying bonds of peripheral European nations and the Korean conflict. “The later is likely to blow over quickly, but the prior could get out of control if Spain heats up,” SEB says. “In that case, gold would rally in parallel with the dollar as Europeans rush for an alternative to the euro. Our tactical view remains bullish.”
Technical-chart analysts with Barclays Capital say gold is generally retaining a bid tone due to ongoing peripheral euro-area concerns. Referring to gold prices in dollar terms, they write in a research note: “Support is building over the 1,314/1,335 lows and whilst that remains the case, we look for a break above interim resistance at 1393/1404. Extension through the 1425 high would confirm a run at 1440.”
The Korean tension and the euro-zone problems will keep a floor under gold prices, so look for any selling to be shallow and brief," said Matt Zeman, head of trading at LaSalle Futures in Chicago
Technical analysis (by Scotia Mocatta):
Gold is unchanged today at current 1373. We see resistance overhead at 1388 the 61.8% Fibo and support at this week’s low of 1349. The market is nervous about Gold this week considering over the past two weeks we have seen the metal reach a fresh record high of 1424 before collapsing back to 1330. After 2 down weeks, is this a sell on rally, or buy on dip? We believe the risk is higher, with only a move below 1330 causing significant liquidation.
Daily Gold and Silver Expected Range:
Gold: US$1360- $1385
Silver: US$27.00 - $28.10
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