Gold Higher as Jobs Data Awaited
Gold prices moved higher today along with stocks and the dollar index as investors await Friday's non-farm payrolls data for November.
Fresh buying along with additional short covering was seen in the gold market today. The gold bulls are trying to build upon some recent momentum. The market is currently trading around the previous swing high in the $1208 area, and the bulls must take prices decidedly beyond this level soon in order to continue the rally.
Stocks and the buck are continuing in their winning ways. The SP500 looks poised to make new all time highs, and the 2100 level on the index is within striking distance. The potential for a Santa Clause rally going into the end of the year could potentially drive stocks to new highs and beyond. Should this prove to be the case, gold and precious metals may be somewhat limited to the upside. The jobs report on Friday could potentially be the catalyst for another leg higher in equities while it could also be the catalyst for a pullback.
The dollar index is at its highest level since 2006. The greenback may have more upside to go and may prove to be a barrier to significantly higher gold prices. The ECB is meeting tomorrow and this could potentially drive the dollar even further or trigger some profit taking. No action is expected from the central bank tomorrow, however, it seems that more stimulus will be forthcoming at some point. Should the ECB stand pat tomorrow, it is possible that some profit taking is seen in the dollar and a bounce is seen in the Euro. This could potentially be bullish for gold prices in the near term.
The technical picture in gold is improving, but the bulls have a lot of work remaining to neutralize chart damage inflicted in recent months.
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04 Dec 2014 | Categories: Gold