Gold futures were little changed during morning trade in Europe today, as investors were wary of big moves ahead of a key ECB meeting and the release of US payrolls data. The precious metals complex was pressured to multi-year lows by the strong dollar earlier this week.
Gold futures for December delivery on the Comex in New York traded at $1 214.7 per troy ounce by 8:19 GMT, down 0.07%. Prices ranged from $1 210.6 to $1 224.0 per troy ounce. The contract added 0.32% on Wednesday.
Silver for December delivery stood for 0.64% daily drop at $17.148, near a four-year trough reached on Tuesday. Meanwhile, palladium dropped 0.44% to trade at $781.10, having logged a six-month low earlier, and January platinum was down 0.39% at $1 284.55, after reaching a five-year low yesterday.
“Gold is showing signs of resilience with $1,200 as a clear support, and is largely driven by the dollar at this juncture,” Barnabas Gan, an economist at Oversea-Chinese Banking Corp. in Singapore, said for Bloomberg. “We continue to stay in data-watching stance and any strengthening of the greenback will very likely inject further downside risk for gold.”
The dollar reached a four-year high against a basket of currencies this week, though it pared gains yesterday, allowing gold to edge higher, after ISM logged a below-par month of manufacturing sector growth in the US. Earlier, ADP had posted its readings on US jobs creation for September, suggesting the economy had added 213 000 jobs, rebounding from the disappointing growth in August. The official Bureau of Labor Statistics September payrolls report is due for release on Friday. Jobless claims figures will be posted today, meanwhile, set to log little change at ~300 000 new applications.
Elsewhere, investors eye the upcoming European Central Bank (ECB) meeting today, for details as to the banks ambitious €3tn stimulus program. The ECB announced the measure last month, which would add to a central lending rate cut to a historic 0.05% low in efforts to revive growth in the Eurozone. The latest batch of economic data also proved bearish, with manufacturing in the Bloc dropping to a 14-month low, while disappointing unemployment and CPI readings added to negative sentiment earlier this week.
The euro is hovering near a two-year low against the dollar, which in turn increases the overall value of the greenback, diminishing the investment appeal of dollar-denominated commodities, such as precious metals.
Holdings at the SPDR Gold Trust, the largest exchange-traded gold-backed fund, dropped 1.2 tons to 768.66 yesterday, the lowest since December 2008, as investor interest in the yellow metal drops.
End-of-quarter technical dynamics and a strong dollar weighed heavily on the whole precious metals complex Tuesday, with gold losing about 9% this last quarter, platinum closing for a 12% loss, palladium down 8%, while silver shed 19%.
Technical support and resistance levels
According to Binary Tribune’s daily analysis, December gold’s central pivot point on the COMEX stands at $1 213.5. In case futures manage to breach the first resistance level at $1 222.0, the contract will probably continue up to test $1 228.5. In case the second key resistance is broken, the precious metal will likely attempt to advance to $1 237.0.
If the contract manages to breach the first key support at $1 207.0, it will probably continue to slide and test $1 198.5. With this second key support broken, the movement to the downside may extend to $1 192.0.
Is gold headed for a ~$1 050 level by years end, as Goldman Sachs had suggested?
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