December Gold: Open= 623.3 High= 637.0Low=623.0 Close= 636.8 Change: +18.5
Two days after the election and the gold market has moved on.After a bout of profit taking in the hours after the election and the uncertainty that followed, solid support was found under the market waiting to buy weakness.Support at $619, the 200 day moving average, provided enough technical support as well.However, a flurry of stories dominated the press today.
Dollar weakness lent its weight to pushing the dollar higher as the markets reacting to Democrats gaining full control of Congress.At least that is one way to view it.Also, gold production in the world’s largest producer of gold, South Africa, fell over 5% on the year in September, countering previous talk of higher gold production for the year globally.While long term gold production does look to increase through large reserves in Russia (in hard to mine regions) the short term forecasts of central bank gold buying is likely to remain a dominant bullish force for the coming years.
Though gold largely has broken the relationship with crude oil, nothing was said that higher oil prices would not support the market.It’s just that gold was not weakening when crude did. So, a small correction came first but the race through $630 was just as fast, leaving many traders grasping at air.$650 is the next objective, though the recovery zone could be as high as $670. Support moves up to $630, $627, $625, $620. Resistance is seen at $637, $640, and $647.
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