December gold futures daily chart

December gold futures – daily chart

The price of gold has paused for breath over the last few days following the sharp rise of last week, and with a holiday shortened week, the market has drifted sideways, as the December gold futures flirt with the $1700 per ounce level. Friday of course sees the monthly release of the Non Farm Payroll data, and with yesterday’s ADP suggesting a positive release, we could see a better than expected figure. However, over the last few months, the ADP figures have been some way off the mark, in forecasting the more significant NFP numbers, so no doubt the markets will be cautious ahead of the release. Of far more significance to the price of gold, will be the likely weakening of the US dollar, once a further round of quantitative easing is unveiled, and even one good set of numbers in the NFP release tomorrow, are unlikely to divert the Federal Reserve from it’s chosen path. If QE3 is released, as now seems certain, then we can expect to see gold prices climb further in due course, and re-test the $1800 per ounce level of late February earlier this year.

From a technical perspective, the outlook remains firmly bullish, with strong buying volume on the daily chart. However on the three day chart we can see that over the last three days have see white volume, or no demand volume in this timeframe, reflecting the temporary pause point in the price action, as we test the $1700 per ounce level. The daily trend remains firmly green, and with a bright green Heatmap, sentiment for gold remains positive in the short to medium term, and we can expect to see the current trend develop further before testing the underside of strong resistance in the $1740 per ounce area. A break and hold here should see gold move firmly higher and on towards the $1800 per ounce region towards the end of the year.

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