London Bullion Report

Gold steady around $800 as traders await Payrolls

Thursday proved quite a volatile day for the precious metal as the dollar strengthened initially before reversing course as the ECB kept it lending rates unchanged following calls from some member to raise rates. EUR/USD closed at 1.4632 having dipped to 1.4626, while traders today will be focusing on the US jobs market with the release of November’s Non-Farm Payrolls, which is expected to show the addition of 85,000-jobs. Other data will show October Consumer Credit and December Consumer Sentiment, forecast at 75.0 from 76.1 in November. Oil prices bounced back above $90/barrel yesterday following positive economic forecasts from OECD. NYMEX crude settled at $90.23 and is little changed this morning.
Gold posted a low of $785 before recovering back to $801.80 by the close as the dollar turned negative. The yellow metal has been straddling the $800 level so far this morning and is likely to spend more time trading between chart support at $785/780/776 and further scaled up long selling above $805. Focus today is centred on US payrolls with a strong reading potentially pressuring the metal lower, however a disappointing reading will again raise concerns about the health of the US economy, increasing the likelihood of a rate cut by the Fed next week, as well as reinforcing gold’s importance as a safe-haven asset.
Silver again found good support around $14 Thursday, recovering from a low of $13.95 to close at $14.49. The return of some investment demand has led to an improvement in sentiment in recent days and could enable a challenge of chart resistance at $14.74 and $15.05.
Renewed investment demand has lifted platinum to $1470 this morning and the metal will continue to remain underpinned by tight market fundamentals in the coming sessions following this years missed production targets. Chart support should continue to be found at $1450/1440 and more substantially around $1435 with resistance expected at $1482 and all-time high of $1490.
Palladium dipped to $340 yesterday before trading back to close unchanged. Again the metals negative fundamentals are capping its upside potential and a test back to $330 could be triggered should fund players unwind their long exposure.