Spot gold -commentary

Dear readers,

Spot gold reached the head and shoulders target.

On an Intraday basis I see significant resistance at 648$ , In addition my Elliott wave count Indicate that gold have completed or is very near to complete a 5 upward wave pattern. I conclude that pullback is likely from here but not lower then 590$.

GOLD: Germany , India & Elliott Waves

Dear readers

Please review :

• Interesting paper by Martin W. Hennecke

• Elliot Wave Gold Update X by Alf Field

• Tarapore, former deputy governor, Reserve Bank of India and economist, has strongly advocated for increasing the proportion of gold in the country’s forex reserve.

MUMBAI, NOV 28: Underscoring the benefits of diversifying foreign exchange reserves and the uniqueness of gold component as part of the forex basket , SS Tarapore, former deputy governor, Reserve Bank of India and economist, has strongly advocated for increasing the proportion of gold in the country’s forex reserve. He was speaking at a conference on Foreign Exchange Management: The Way Forward, on Tuesday.

In the past, country’s forex reserves have jumped significantly but the gold holding in it has now dwindled to as low as 3.6%. “If the gold proportion of the RBI’s forex reserves were cautiously raised, to say 10% of total reserves, it would require an additional purchase of gold by the RBI of $10 to 11 billion,” he said. -source

Gold Market News

COMEX Metal Futures on the CME Globex Platform

New York, N.Y., November 21, 2006 -- The New York Mercantile Exchange, Inc. announced today that it will expand COMEX metals electronic trading to include side by side trading, COMEX miNYs, Asian metals, and London metals futures contracts on the CME Globex® electronic trading platform beginning on December 3 for trade date December 4.

NYMEX will migrate the COMEX gold, silver, copper and aluminum futures contracts, which currently trade after hours on the NYMEX ACCESS® electronic trading system to CME Globex. These contracts will also be offered on CME Globex during open outcry hours, trading virtually 24 hours a day. -source


Related - * CME and C(BOT) to Merge


NCDEX opens futures contracts for gold and silver

TUESDAY, NOVEMBER 21
MUMBAI: National Commodity & Derivatives Exchange Ltd (NCDEX) launched two new precious metal futures contracts on Tuesday aimed at retail investors, an exchange official said.

The new products, a 100-gram gold contract and a five-kg silver contract, join several heavier denomination contracts for the two metals on NCDEX. "This is aimed at retail investors, since every household in India feels the need to invest in precious metals," said, Narendra Gupta, chief of strategy.

Both products would have contracts for every month with the expiry set for the 20th of the delivery month. -source

IMF Should Sell Gold to Cover Looming Losses, Directors Say

By Christopher Swann

Nov. 22 (Bloomberg) -- The International Monetary Fund, the world's third-largest owner of gold, should sell some of its hoard to cover projected operating losses, say a growing number of the fund's executive directors.

The Washington-based lender predicts it will lose $87.5 million next year and $280 million in 2009. Some directors say the fund should sell a portion of its 103 million ounces of gold, valued at $64.7 billion, and invest the proceeds in interest- bearing assets.

``We would support the use of fund gold as part of the solution to IMF financial needs,'' Tuomas Saarenheimo of Finland, chairman of a group that coordinates the position of European Union members on the fund's 24-person board, said in an interview in Washington... -source

Tricks(y) Gold Market

Today at 11:38 (GMT) CBOT Gold Futures Contracts took a deep of about 20$ then fully recovered in less then one minute. About 1100 contracts traded (110,000 Troy ounces) for the ZG contract, According to the CBOT website the mini gold contract (YG) traded as low as 608.8$ while the full size contract (ZG) low was 604.0$.
At the same time NYMEX – COMEX gold contract (GC) was quoted not lower then 621$, The Inter bank and over the counter markets where divided, some followed Cbot while other followed the Comex. All contracts mentioned are December 2006 and spot prices for OTC and Inter bank markets.

Here is what Bloomberg have to report about the issue:


Gold also fell after the sale of the metal in Chicago at a price below the market caused speculators to reduce their holdings.

Gold dropped as much as $26, or 4.1 percent, in electronic trading on the Chicago Board of Trade, to $604 an ounce. The metal in London was trading at the same time at around $625. An estimated 100,000 ounces were sold in Chicago, triggering preset sell orders, said Martyn Whitehead, director of commodity sales at Barclays Capital in London.

``It became a cascade of stop-loss orders, which caused the fairly large $20 gap we saw in the market this morning,'' said Whitehead, who is also vice chairman of the London Bullion Market Association, which runs the gold market in London. ``Someone, somewhere lost a bit of money this morning.''

Prices rebounded before the Comex opening.

``The whole break took about 20 seconds,'' McGhee of Integrated Brokerage said.

Prices May Rebound

Gold may rebound, Perez-Santalla said. ``The gold market didn't drop,'' he said. ``CBOT dropped. Anybody who had stop losses got hurt. It'll remind people of the sensitivities of electronic trading.''

CBOT has captured about 49 percent of the gold-futures market after two years of electronic trading. The exchange last week began open-auction trading on gold and silver contracts to trade side-by- side with its electronic trading platform.

``You have much more of a feel for the market when you're using the floor instead of the screen,'' said Nick Ruggiero, a trader at Eagle Futures Inc. in New York.

Craig Grabiner, a spokesman for CBOT, said he couldn't comment immediately.

-source


Technically it will be logical to assume that gold is retracing some of its 77$ recent move up .

Gold Price commentary

Dear readers

Gold and silver have performed well the last several weeks. Gold bottomed at 558$ and is up 77$ since then. Gold and silver have managed to overcome the diagonal downtrend resistance coming from the May top, the event draw lots of attention and market participation is and was high. Please note that I do see signals of short term topping and even in a relatively bullish scenario the 590$ level could get retested. So Long term all is well for this global gold bull market but short term some consolidation might be required.

Spot Gold chart analysis

Dear Readers, Few short notes.

1) October low is higher then June low.

2) Inverted head and shoulders pattern is in place (price objective =~642$)

3) Areas of resistance = 644$ - 648$, 676$, 730$.

4) Today's minor pullback is uptrend constructive in my opinion.

See also Platinum charts analysis, below is 8 hours intraday (24 hours) Spot gold chart.

Spot Gold (XAUUSD) Intraday chart Update

Below is spot gold 4 hours chart (click on the chart for larger view)