End of Week Report 2 Nov

Gold Weekly Recap It has been a volatile week for Gold. It was positive for much of last week but hit an obstacle at the 38.2 Fibonacci Retracement level at 1238. Gold passed through here several times but repeatedly fell away again for the close. Last Monday saw a change in direction as the sellers came back into play. Tuesday, it broke through a short-term support but it was Wednesday and Thursday that saw most instability. First, Gold dropped through an important support at 1214, posting a low of 1211, before recovering to close back above the support. This was the catalyst for aggressive buying yesterday, moving Gold back up to post a high of 1237. It is slightly softer in early trading today.

Gold the Week Ahead Technically the Bulls retain control whilst Gold remains above 1214, so the dip this week to 1211 was a scare however, closing that day back at 1216 was a crucial vote of confidence and sparked serious buying yesterday. There remains the 1238 resistance that must be breached before Gold can expect further gains. There has recently been two prints at 1239 and another at 1243, but until it can close above 1238, then it just represents a healthy bounce from the sell-off that began last April. If Gold can make a strong close today then it is positive going into next week’s action.

Currencies EUR has returned recent gains against GBP in spectacular fashion over the last couple of days. This chart is an excellent test case demonstrating the Elliot Wave Pattern. This began at August month-end with the first leg of a five-wave down move. This ended on 10th October and what was then required to complete the pattern was a three-wave correction known as the ABC part of the formation. This is exactly what was seen although the third-wave was slightly over-extended. After witnessing a high at .8939 just a few days ago, there was heavy selling posting a low yesterday of .8757. Surprisingly, as long as it stays above .8752, it is still posting higher-lows on each pullback. As long as it remains above this point then EUR should stabilise. A failure to do so may see the Bears take action again.

VIBHS Financial Review