• Gold hit a one-month high overnight, as investors continue to transition back into precious metals as many expect the recent run in the U.S. Dollar is reaching a climax.
• Gold prices ended the U.S. day session solidly higher Thursday, boosted by a sharply lower U.S. dollar index and some new uncertainty injected into the marketplace following Wednesday’s minutes from the Federal Reserve’s Open Market Committee (FOMC). February Comex gold was last up $16.20 an ounce at $1,181.50. March Comex silver was last up $0.058 at $16.60 an ounce.
• The U.S. ADP national employment report Thursday showed a reading of up 153,000 jobs in December. That number was a bit lower than market expectations and also helped to lift gold prices. The next big data point will be Friday’s U.S. employment report from the Labor Department. Many markets could see increased volatility in the aftermath of Friday morning’s jobs report. The key non-farm payrolls number is forecast to come in at up around 185,000 in December.
• Technically, February gold futures bears still have the overall near-term technical advantage but the bulls are having a very good week. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,200.00. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the December low of $1,124.30. First resistance is seen at Thursday’s high of $1,185.90 and then at $1,190.00. First support is seen at $1,175.00 and then at Thursday’s low of 1,163.60. Wyckoff’s Market Rating: 3.5
• Although gold is starting the year on a positive note, pushing well above a key retracement point, one commodity analyst says that more work still needs to be done.
• However, Ole Hansen, head of commodity strategy at Saxo Bank, said there is a risk that this move could be nothing more than short-covering in the near-term.
“If we start to break above $1,205 then we will see real money reengage in the market,” he said in a video Thursday.
For 2017, Hansen is looking for an average gold prices of around $1,325 an ounce and $20 average price for silver.
“Overall we need to see investment demand return the market,” he said. “The key will be for gold to hold above $1,173 an ounce in the near-term.”
Reference: Kitco, Proactive Investors
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