Gold Pressured by Soaring U.S. Dollar Index; U.S. Jobs Data Next Up
Gold prices ended the U.S. day session moderately lower Thursday. The yellow metal saw selling pressure develop during the session as the U.S. dollar index pushed sharply higher and hit a 13-month high. The gold-bullish elements of the interest rate cut and quantitative easing announcement from the European Central Bank Thursday were offset by the surging greenback. December Comex gold was last down $4.00 at $1,266.30 an ounce. Spot gold was last quoted down $3.80 at $1,266.00. December Comex silver last traded down $0.074 at $19.115 an ounce.The ECB lowered its key interest rate to very near zero, at .005%. The market place reckoned the ECB was on the verge of announcing fresh monetary stimulus. There was uncertainty on the precise timing of any such move. ECB president Mario Draghi’s press conference saw the modest quantitative easing package unveiled. The Euro currency sunk to a 13-month low on the ECB news.
Next up is the U.S. jobs report on Friday, which will give the latest reading on the important non-farm payrolls growth, seen at up 220,000 in August. Recent improving U.S. economic data suggests the Federal Reserve will continue to wind down its quantitative easing of monetary policy by the end of this year, and will likely begin to raise interest rates sometime in 2015.
There was a heavy slate of U.S. economic data due for release Thursday, including the weekly jobless claims report, the ADP national employment report, the Challenger job cuts report, revised productivity and costs, the international trade report, the U.S. services PMI, the ICSC chain store sales report, the DOE liquid energy stocks report, and the ISM non-manufacturing report. That data was a mixed bag but mostly upbeat.
On the geopolitical front there have been no major, markets-moving developments this week. The Russia-Ukraine stand-off continues to simmer, with a cease-fire maybe in place, but maybe not. The U.S. and U.K. continue to ratchet up their defensive postures against the ISIS terrorists in the Middle East.
The London P.M. gold fix was $1,271.50 versus the previous London A.M. fixing of $1,271.00.
Technically, December gold futures prices closed near the session low Thursday. Prices are hovering near this week’s 10-week low. Gold bears have the firm overall near-term technical advantage as a seven six-week-old downtrend is in place on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,290.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,250.00. First resistance is seen at $1,275.00 and then at $1,280.00. First support is seen at this week’s low of $1,261.90 and then at $1,250.00. Wyckoff’s Market Rating: 3.0 |
