The precious metals were each modestly higher at Thursday’s opening bell. The metals seemed to be in the holiday mood, as low volumes make it easier for the bulls to assert themselves in the trading markets.
By 9:30 am ET, spot gold was about $5 higher to $1,076/oz while silver added 5¢ to $14.46/oz. Platinum and palladium were both about 1% higher, trading at $880/oz and $560/oz, respectively.
The latest technical levels for the gold price at resistance at $1,077/oz and $1,081/oz. Support is seen at $1,067/oz and $1,064/oz.
Thursday will also be a short trading day, with COMEX gold trading closing early at 12:30 pm ET.
Wall St Ghost Town
Although there have been thin volumes in the financial markets for about the last week as the holiday season has approached, at this point Wall Street is essentially empty, with the vast majority of participants home with their families or on vacation. Christmas Eve is traditionally a slow and uneventful day not only due to the lack of participants, but also because there is usually no big news or momentum to speak of. Many of the leading outlets for market analysis are also home for the holidays, reflecting the dearth of action to report on.
When the markets come back to life after the weekend, the main objective for traders becomes getting everything in order in preparation for the calendar the switch over to 2016. According to Matthew Turner, a precious metals analyst for Macquarie, “gold could see sharp price moves next week as investors take stock of their positions and make changes.”
It makes sense that bigger movement could be possible when markets remain thin for last few the trading days between now and Monday, January 4th.
Market News Affecting Gold
Stocks have managed gains for three straight days and have looked to close out the year strong. They will likely get another boost on Thursday as first-time jobless claims fell by 5,000 to 267,000 last week, a four-week low. This beat expectations of 270,000 new claims. This also marks the 42nd consecutive week that the measure has held below 300,000, its best such run since the 1970s.
Other developing trends on the markets have been kinder to gold. Crude oil followed up its rally on Wednesday by opening higher on Thursday, as well. Both major benchmarks were better than 1.3% higher in morning trading, pushing WTI crude above $38/bbl and Brent crude near $37.85/bbl. This shows that the spread between the two price benchmarks has evaporated to almost nothing, when WTI used to maintain a considerable premium over its European counterpart.
Also helping gold is the fact that the dollar has posted 5 straight days of losses, its worst losing streak in over 7 months. It seems that the modest quarter-point interest rate hikes are small enough that no strengthening effect has been seen yet in the USD.
Looking ahead to the gold market for next year, the focus will mainly be on monetary policy and demand for gold in Asia. The Wall Street Journal reports that investors will be “monitoring the resilience of Indian demand for gold and whether the high volumes of gold entering China will balance with the country’s sluggish jewelry sales. The two countries account for roughly 50% of global gold demand.”
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.