Gold Prices Remain Muted
Gold prices remain bereft of momentum this week, with the market continuing to trade a narrow range around the midpoint of November’s action. A pullback in USD highs, but a failure to move meaningfully lower, ahs left gold prices stunted for now with the market awaiting fresh directional cues. Of course, with the ever-important US NFP release due tomorrow, traders shouldn’t have to wait too long to find some fresh volatility in gold prices. Coming ahead of the keenly anticipated December FOMC meeting, tomorrow’s US jobs report will be seen as make or break for a further cut this year.
Fed Easing Expectations
Currently, the market is pricing in around a 70% chance of a fresh cut. The implication here is that if we see a weak number, this pricing should jump higher, sending USD down lower while giving gold prices a boost. On the other hand, if we see an upside surprise, easing expectations are likely to weaken, helping strength USD, weighing on gold.
Weak US Data
A weaker ISM services print yesterday, along with a lower-than-forecast ADP jobs number mean that tomorrow’s data is set against a bearish USD backdrop. As such, any fuel to add to the fire should amplify USD selling greatly, meaning better risk-reward is likely found on the long gold – short USD side into the release.
Technical Views
Gold
For now, gold prices continue to hover between support at 2,604.56 and resistance at 2,684.76. Technically, we’re in no man’s land until either of those levels gives away. Topside, 2,789.40 is the next bull target while to the downside, 2,350.59 will be the next support to note.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.