End of Week Report 30 November

Gold Weekly Recap Last week Gold sat comfortably circa the mid to low 1220s but the start of this week gave cause for concern as it dipped below the 1214 support on both Tuesday and Wednesday. Crucially, Gold did not close below this point and staged a recovery. If this had not happened, it is possible that the 1200 level could have been tested however, currently, it is back in safe territory circa 1224 in early trading today. It is an awkward time of year for making accurate predictions as there is generally squaring-off in the lead up to Christmas, but many issues remain that could potentially move the markets e.g., the start of the G20 conference, tensions between Russia and Ukraine and continuing trade tensions between US and China etc.

Gold the Week Ahead There is little change to the levels as another week ends heading towards 2018 year-end. 1200 is the key support and 1214 is still relevant on a closing basis. In the other direction the first resistance comes in at 1230. Markets touched a high of 1229 yesterday before falling away to close down at 1224. The key resistance remains the 38.2 Fibonacci retracement of the large move down that began last April. This comes in at 1238 and similar to the 1200 support, has been breached previously, but gains could not be held (arrowed on the chart.) General perceived wisdom is that anything up to this point is a healthy correction and not a reversal of the longer-term trend. It is unlikely that either of the larger levels being taken on as December approaches however, it may yet be possible as volumes decline on the run in to year-end.

Currencies USDCAD continues to trade within a Bullish Fibonacci channel. Last week, there was strong buying after testing the support line of this channel which comes in at 1.3211 for today's action. Resistance or profit taking, keeps occurring on any approach to the 61.8 line (arrowed on the chart.) This happened again on Wednesday and interestingly, it fell away leaving a long upper shadow on this occasion. Technicians look for a sign of weakness and here, a failure to move back above the 50 per cent line which comes in at 1.3319 today. Channels are not infinite so this one will require careful monitoring over the coming weeks.

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