Gold Trends Intra Day Gold Update - Oct 24th Bill Downey

In last nights update gold resistance was listed at 1647-1655 and the high so far is 1662 spot gold. Support was listed at 1628-1634 and the low so far is 1635 spot gold.

Trades --- I have no orders but watching for a close above 1650 in gold. IF we do, I'll look for some type of set up and favor a move towards 1675-1680


London Gold Fix $1,651.00 +28.00

From the overnight action it would appear that gold is benefiting from ideas that the Euro zone will be able to avoid the latest meltdown threat because of their Wednesday EFSF offering. There were reports of strong demand for gold from Asia overnight and that probably contributed some support to the US gold market to start the new trading week. Gold might also be drafting some minor support from action in the dollar markets this morning, but the EU news appears to be the main focus of the gold trade. It is also possible that gold is garnering some support from a brokerage firm upgrade of gold prices for next year and for 2013.

A slightly favorable Chinese PMI reading overnight has provided gold and other commodity markets with a lift this morning, as growth in China typically results in improved commodity demand views. Equity markets in Asia were generally higher during overnight trading and stock indices in Europe were also higher this morning. US equity markets are slightly higher. The US Dollar is near unchanged levels against most of the majors this morning. The Japanese Trade surplus during September was 300.4 billion Yen, higher than market expectations. Euro Zone manufacturing during October was at 47.3, lower than forecasts. German manufacturing during October was at 48.9, lower than some projections. Euro zone Industrial New Orders during August were up 1.9%, higher than expectations. The only major US economic number released this morning, will be the Chicago Fed's National Activity Index at 10:00 AM EST

Going to the charts

Gold is very close to breaking above the trend lines on the charts at the 1650 area. There was a push to 1660 earlier today and then a pullback to 1650 in New York this morning. With 1650 holding on the pullback, it is possible that gold is beginning to support at this turn price potential. We still need a close above 1650 to favor a push towards 1680. Reader David S also has 1665 as a key Gann number to watch. The adaptive averages at 1650-1658 is kind of a neutral zone and the action there should be important. The red adaptive average has provided resistance througout this gold correction so caution at 1658-1665 should also be noted.

Options expiration is Wednesday and the boyz might be trying to hold price under 1675 until the Wednesday close as there were still 17K contracts outstanding at that strike price coming into today. The wild card is the euro debt decisions. In USA there will be over 300 companies reporting earnings this week and we still think the stock market can surprise higher towards the 1270 area in the S&P's and that might give a boost to commodities also.

In summary -- it looks like 1650-1660 is the key area of trade today. A close above 1650 would favor higher but the 1658-1660 area is also a place that need be watched. That 1658-1662 area is th spot to watch today for resistance. If we close above there --- or pullback to options on Wednesday, I'll look for a setup. If i place an order for my own account, I'll email.

Gold Trends Intra Day Silver Update - Oct 24th

The silver market has also showed some positive action overnight by rising to the highest level since October 19th in the December silver contract. Like gold, silver seems to be drawing some support from favorable commodity market views and hopes that the European leaders will ultimately reach a deal that is strong enough to discourage bond vigilantes. In the mean time, silver seems to be benefiting from supportive dollar market action, positive and action in commodity markets. While gold saw reports of strong demand in Asia overnight, that talk didn't seem to specifically include demand for silver. Silver will probably continue to track in sync with the equity markets and inversely with the dollar.

Going to the charts

Silver is in the same position as gold -- as price is sitting just under a downtrend line near 31.75 --- the 31.50-32.06 area is the neutral zone where the adaptive averages are. So it looks like we still need a close above 32.06 at a minimum to favor higher. The options expiration on Wednesday shows that 32 dollar area as a key spot for the option boyz and they may try to hold that area until Wednesday. The Euro debt situation is still the wild card for the week. Thus it's possible that the metals will remain in a tight range until late Tuesday or Wednesday. In summary, the price trend remains sideways but we think a 1-2 week move is developing. We still need to see which way the break in price will come and so I'll remain patient another day in silver also. As long as price is below 32.06 -- the trend still remains neutral. If we close above that area it will hint that we could go gets the 33.50-34.00 area. Watch that 32 area today. Once we close above that trendline --- odds will favor a pop towards 34.  

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