US gold futures finished pit trade higher in choppy and 2 sided trade Thursday.
Prices rebounded from a morning sell off following news the European Central Bank cut its economic growth forecast for the EU.
Some new safe-haven investment demand was seen in the precious Yellow metal. Short covering and bargain hunting were featured.
Prices were under moderate selling pressure early Thursday, on technical action and a firming USD index.
Feb Gold last traded + 4.80 at 1,698.50 oz.
Spot Gold was last quoted + 2.90 at 1,697.75 oz.
Mar Comex Silver last traded + 0.073 at 33.03 oz.
At its meeting Thursday, the European Central Bank said that Eurozone economic growth will be stagnant to declining during Y 2013. The ECB projected overall EU economic growth at minus 0.3% during Y 2013. Just 3 months ago the ECB projected overall EU economic growth at 0.5% during Y 2013. That news felled the EUR, boosted the USD index and prompted fresh safe-haven demand for Gold, to push the metal’s price above flat on the day.
Gold traded near steady in very early trading and then sold off, hit the session low right after the release of the US weekly jobless claims report that showed a decline in claims in the latest week. That report prompted a slight up-tick in the USD index putting some downside pressure on the precious metals.
The Gold Bulls are a bit hesitant from a near-term technical perspective and need to show some power soon to avoid more significant near-term chart damage.
In overnight news: European Union countries’ collective gross domestic product shrank by 0.1% in the third quarter, from the previous quarter, and was down 0.6% from the same period last year.
EU businesses curtailed their investment and drew down their existing stockpiles in the three months ending in September. Most believe the EU will continue its economic contraction at least into Q-4 of Y 2012.
Greece’s unemployment rate rose to 26% in September, from 25.3% in August, it was reported Thursday. On the positive side, German manufacturing orders increased more than expected, at up 3.9% in October.
The Bank of England and the European Central Bank left their interest rates unchanged after meetings Thursday, as expected.
In the U.S: the market focus is still on the “F-Cliff” tax increases and spending cuts that is fast approaching. U.S. lawmakers are still jawboning on the matter. While the market has odds that are higher than not that there will be a last-minute agreement among US lawmakers to avoid the F-Cliff, the overall situation has placed Bearish pall on the raw commodities and stock markets.
Friday’s US jobs report for November may be a market mover, but that report will be skewed by the big storm that hit the US East Coast a few weeks ago and be less market-sensitive.
Forecasts call for the Key non-farm payrolls figure to have risen by 80,000 in November.
The market will start to look to next week’s last Federal Reserve FOMC meeting of the year, on 10-11 December.
“Operation Twist” program ends and the FOMC members must decide whether to extend the bond-buying program. Many believe the Fed will continue to purchase USTreasuries and implement QE-4 at next week’s meeting. That would be raw-commodity market Bullish, including Bullish for precious metals IMO.
The USD index was firmer Thursday, supported by the ECB economic forecast and the better weekly US jobless claims report.
The Greenback Bears have the overall near-term technical advantage, the Bulls gained some fresh upside momentum Thursday.
Nymex Crude Oil prices were solidly lower Thursday, pressured by the ECB forecast.
Crude Oil (WTI) 86.20 -1.68 (-1.91%)
Crude Oil Bears did gained some downside near-term technical momentum Thursday.
These 2 Key outside markets were in a Bearish mode for the precious metals Thursday, and did limit buying interest in Gold and Silver.
The London PM Gold fixing is 1,693.00 Vs the prior London PM fixing at 1,694.25
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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