Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
The Gold Stocks Correction and What Lays Ahead - 19th Oct 19
Gold during Global Monetary Ease - 19th Oct 19
US Treasury Bonds Pause Near Resistance Before The Next Rally - 18th Oct 19
The Biggest Housing Boom in US History Has Just Begun - 18th Oct 19
British Pound Brexit Chaos GBP Trend Forecast - 18th Oct 19
Stocks Don’t Care About Trump Impeachment - 17th Oct 19
Currencies Show A Shift to Safety And Maturity – What Does It Mean? - 17th Oct 19
Stock Market Future Projected Cycles - 17th Oct 19
Weekly SPX & Gold Price Cycle Report - 17th Oct 19
What Makes United Markets Capital Different From Other Online Brokers? - 17th Oct 19
Stock Market Dow Long-term Trend Analysis - 16th Oct 19
This Is Not a Money Printing Press - 16th Oct 19
Online Casino Operator LeoVegas is Optimistic about the Future - 16th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - Video - 16th Oct 19
$100 Silver Has Come And Gone - 16th Oct 19
Stock Market Roll Over Risk to New highs in S&P 500 - 16th Oct 19
10 Best Trading Schools and Courses for Students - 16th Oct 19
Dow Stock Market Short-term Trend Analysis - 15th Oct 19
The Many Aligning Signals in Gold - 15th Oct 19
Market Action Suggests Downside in Precious Metals - 15th Oct 19
US Major Stock Market Indexes Retest Critical Price Channel Resistance - 15th Oct 19
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools - 15th Oct 19
British Pound GBP Trend Analysis - 14th Oct 19
A Guide to Financing Your Next Car - 14th Oct 19
America's Ruling Class - Underestimating Them & Overestimating Us - 14th Oct 19
Stock Market Range Bound - 14th Oct 19
Gold, Silver Bonds - Inflation in the Offing? - 14th Oct 19
East-West Trade War: Never Take a Knife to a Gunfight - 14th Oct 19
Consider Precious Metals for Insurance First, Profit Second... - 14th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - 13th Oct 19
The Most Successful IPOs Have This One Thing in Common - 13th Oct 19
Precious Metals & Stock Market VIX Are Set To Launch Dramatically Higher - 13th Oct 19
Discovery Sport EGR Valve Gasket Problems - Land Rover Dealer Fix - 13th Oct 19
Stock Market US Presidential Cycle - Video - 12th Oct 19
Social Security Is Screwing Millennials - 12th Oct 19
Gold Gifts Traders With Another Rotation Below $1500 - 12th Oct 19
US Dollar Index Trend Analysis - 11th Oct 19
China Golden Week Sales Exceed Expectations - 11th Oct 19
Stock Market Short-term Consolidation Does Not change Secular Bullish Trend - 11th Oct 19
The Allure of Upswings in Silver Mining Stocks - 11th Oct 19
US Housing Market 2018-2019 and 2006-2007: Similarities & Differences - 11th Oct 19
Now Is the Time to Load Up on 5G Stocks - 11th Oct 19
Why the Law Can’t Protect Your Money - 11th Oct 19
Will Miami be the First U.S. Real Estate Bubble to Burst? - 11th Oct 19
How Online Casinos Maximise Profits - 11th Oct 19
3 Tips for Picking Junior Gold Stocks - 10th Oct 19
How Does Inflation Affect Exchange Rates? - 10th Oct 19
This Is the Best Time to Load Up on These 3 Value Stocks - 10th Oct 19
What Makes this Gold Market Rally Different From All Others - 10th Oct 19
Stock Market US Presidential Cycle - 9th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Gold Jumps After Strong ADP Jobs Data, "Short-Covering" Likely

Commodities / Gold and Silver 2013 Dec 04, 2013 - 05:05 PM GMT

By: Adrian_Ash

Commodities

JUMPING to $1229 per ounce in London trade Wednesday, gold defied analyst expectations and reversed earlier 1% losses after stronger-than-expected US jobs data.

Today's private-sector ADP Payrolls Report said 215,000 jobs were added in the US last month, against consensus forecasts of 173,000.


Rising ahead of that number, used by some as an advance guide to Friday's official US non-farm payrolls figures, gold had then fallen $5 per ounce before jumping 0.9% in volatile trade.

Gold "[had] hit a fresh 5-month low in every session this week," says the Reuters newswire.

"Recent short-term stabilisation was much weaker and shorter than expected," says the latest technical analysis from Axel Rudolph at Commerzbank in Frankfurt.

Repeating the same view on silver, "Remains bearish," Rudolph concludes.

"Gold has a decent chance of retesting its 2013 lows sometime in December given all that is going on," reckons Edward Meir at brokerage INTL FCStone, citing this coming Friday's US jobs data and then the Federal Reserve meeting ending Weds 18 Dec.

"Support is at the major low of $1180 from June 2013," says chart analysis from London market-maker ScotiaMocatta, warning that technical indicators suggest "gold has room to fall further before being hindered by 'oversold' signals."

But "The main risk for gold is a short squeeze," counters ANZ Bank, pointing to the large short position now built up by speculative traders in US gold futures.

Previously peaking in early July, the gross short position in US gold futures and options was quickly unwound as the gold price began a 20% rally from June's 3-year low.

"Comex gold shorts are at a 4-month high ahead of Friday’s US employment data," agrees Walter de Wet at Standard Bank in London, noting the latest US futures positioning figures.

Either that means "disappointing data could very likely trigger large-scale short covering and push gold higher, quickly," says de Wet. Or Friday's non-farm payrolls report "is irrelevant to participants as the majority looks through the noise towards the end goal, i.e. tapering and a slow normalisation of US monetary policy which is coming closer by the day."

Opting for the latter explanation, "Our tactical view remains unchanged for now," Standard Bank's analyst concludes, also citing weak Asian demand for physical gold:

"Sell gold into rallies."

Meantime in India, where gold smuggling has reportedly risen 7-fold on the government's anti-import rules in 2013, "No one is giving us stocks, all of it is going to exporters," complained one Kolkata dealer to Reuters earlier.

Under rules introduced in the summer, 20% of new gold imports must be set aside for re-export.

Indian premiums to the world's benchmark London price today held around $130 per ounce, according to dealers.

By Adrian Ash
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Adrian Ash Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules