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Gold Quiet Today

The gold market was very quiet today ahead of the Thanksgiving Holiday in the U.S. The market remained below the $1200 level for most of the session, and closed just shy of this price point.

Stocks were stronger today as it appears more new records are on the way. The dollar index was weaker while crude oil prices also dipped. The energy markets are anxiously awaiting tomorrow's OPEC meeting to see if any action such as cuts in output will be taken. As of today, it seems more and more unlikely that the group will cut production.

Lower oil has not done the gold market any favors. Gold is at times bought as an inflation hedge or bought when people fear rising prices. The steep drop seen in crude oil prices in recent months shows more of a deflationary pulse if anything, and inflation continues to run below the Fed's target.

The dollar index remains near four year highs and appears poised for further upside. While gold can rally in spite of a higher dollar, it may make it more difficult for the market to put together a sustainable rally. Given current economic conditions in Europe and Japan, the greenback could potentially keep moving higher for some time.

Overall risk appetite remains high and may also prove to be a headwind for higher gold. While gold has been trending higher in recent sessions, the bulls are having a tough time holding the $1200 level. The market likely must make a clean break away from this level in order to attract more fresh buying interest.Resistance may be seen at the $1200 level and then again in the $1220 area. The market has been making higher lows which may be indicative of some underlying strength. To maintain any current upside momentum, however, the bulls will need to act sooner rather than later.

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27 Nov 2014 | Categories: Gold

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