Gold is selling off today as the dollar is strong. Prices have run into resistance at 1380 and look to be forming a head and shoulders pattern. We see near term weakness and see the market moving to test 1340 next week. Volumes are light today and we would be cautious if trading.
Silver is off this morning after running into resistance at 28. A stronger dollar, China moves to curb inflation as well as holiday trading have all lent selling pressure to the market. Some risk premium is being taken out of the market as well as North and South Korea seem to be working things out peacefully. We are near term bearish and see another test of 25 as possible.
The December Gold has reached a high this week of $1382.90 and a low of $1347.90. I am in a bearish mode unless the GCZ10 should penetrate $1375.00 and $1399.60. While the move this last week put us in a temporary sell mode, the Gold is an emotional market that could be explosive with any fear or uncertainty.
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.
Some of the end-of-week weakness in Comex gold may be the result of liquidation of long positions ahead of first-notice day next week, Nabavi said. Traders, who do not want to take delivery, generally roll forward to the next most-active contract, which is February, or else exit their positions. By the end of Friday, much of this activity should be wrapped up, removing some of the near-term selling pressure in the futures market, Nabavi said.
“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.”
MY COUNTS DEC GOLD 11/29
RESISTANCE # 2........................$1387.00(MCX Rs 20514)
RESISTANCE # 1........................$1374.00(MCX Rs 20401)
PIVOT..........................................$1362.00(MCX Rs 20298)
SUPPORT# 1............................. .$1350.00(MCX Rs 20184)
SUPPORT # 2............................ .$1341.00(MCX Rs 20085)
MY COUNTS DEC SILVER 11/29
RESISTANCE # 2.........................$28.04(MCX Rs 42286)
RESISTANCE # 1.........................$27.37(MCX Rs 41638)
PIVOT...........................................$26.86(MCX Rs 41146)
SUPPORT # 1...............................$26.18(MCX Rs 40497)
SUPPORT #..................................$25.70(MCX Rs 40006)
RAHUL KUMAR
GOLD Analysist
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