Gold declined after it’s large pullback yesterday after the data out of the United States was much better than expected. Unemployment claims dropped below the stubborn 300K mark to 298K. Growth expansion also increased 3.6 percent in the third quarter, largely due to higher inventories.
The Federal Reserve will be keeping an eye on the positive data, which shows strength, but the key unemployment target has yet to be hit. Tomorrow, the US will report the unemployment rate and non-farms payroll data. The unemployment rate forecasts have a general consensus of 7.2 percent, but I believe the seasonality will allow a seven percent print.
“The economic data and jobless claims are another indication that the U.S. is on the right track,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates. But, a taper is still unlikely in December.
Gold seen a nice sized pullback, but the key $1,255 ounce resistance level remains intact. Price is still consolidating within well established yearly ranges.
Support still lies around $1,210 per ounce. Silver seen a similar price consolidation prior to a breakout to the downside, and gold could be setting up for the same.
Gold is down 1.27 percent, currently trading at $1,231.40 per ounce.