The FTSE 100, France, and another gold update

France and the UK index are almost level pegging, but what's the significance? Independent analyst Alistair Strang looks at the pair and also comes up with new targets for gold.

We wonder if someone, somewhere, has a betting pool open on just when will France match the FTSE 100, point for point. The indices are drawer ever closer, France closing 17 November at 7,156 points and the FTSE at 7,291 points.

Obviously, aside from the points value, there is no similarity between the pair. Even market performance since the Covid-19 low last year highlights the dismal movement of the FTSE.

As can be seen on the chart below, with the FTSE performance overlaid on a chart for the French market, the difference in performance is quite a worry, especially as France commenced from a lower level in 2020.

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In an exercise (otherwise known as ‘grasping at straws’), we’d liked to suspect European markets were slowing down, while the FTSE made an effort to catch up. It’s certainly becoming difficult to stoke the fires of optimism for the UK. Perhaps Santa shall appear, wearing a Superman cloak, and produce a super-Santa rally. (Clue: not going to happen)

Source: Trends and Targets. Past performance is not a guide to future performance

Gold

We’ve received a few emails, asking for a further update on gold, despite it being covered last week. The reason for the flurry is fairly simple; we’d given a trigger level at $1,873 and the metal achieved a high of $1,877 on Tuesday before retreating to close the day at $1,850.

This sort of thing is always a worry, hence our often repeated demand a market actually close a session above a target level to give a belt and braces signal which confirms movement potentials.

Instead, for the present, about the best we can hope is our $1,873 level shall prove valid until such time the market stops circling below the trigger level and, once again, breaks the surface.

For now, we can announce closure above $1,873, or intraday traffic above 1,878 should make a visit to an initial $1,900 almost inevitable. Our longer term secondary currently recalculates at $1,939.

Source: Trends and Targets. Past performance is not a guide to future performance

From a very immediate perspective, given the stuff is trading at $1,865 at time of writing, above $1,868 is supposed to bring a trip to $1,873.

A near term secondary, should this level be exceeded, calculates at $1,880 points and just another nudge higher. This is why being fussy about a closing price level becomes important.

There’s certainly a good chance achieving our secondary target shall permit the product to actually close a session above the trigger level. Visually, we’re inclined toward optimism for the price of gold.