Gold Price Surges on Technical Buying, Weak US Dollar
New York (Aug 31) Gold prices were ending the U.S. day session Thursday with good gains and were poised to close at a bullish monthly high close and a 10-month high close. Many traders saw early price weakness as a value-buying opportunity and jumped on board the long side. An eroding U.S. dollar index as the session progressed also worked in favor of the precious metals market bulls. December Comex gold was last up $8.90 an ounce at $1,323.00. December Comex silver was last up $0.102 at $17.605 an ounce.
The gold market Thursday shrugged off an uptick in investor/trader risk appetite the past couple days. Some upbeat economic data from the U.S. on Wednesday, and from the Euro zone and China on Thursday, has worked to boost world stock markets.
The U.S. dollar index was higher in overnight trading and early Thursday, but then backed off when some uninspiring U.S. economic data was released this morning. The greenback bears have the firm overall near-term technical advantage.
The other key outside market on Thursday saw Nymex crude oil futures solidly higher on a corrective bounce after hitting five-week low early on today. Oil prices are still in a four-week-old downtrend on the daily bar chart and the bears have the overall near-term technical advantage.
The major U.S. data point of the week is Friday’s employment situation report for August from the Labor Department. The key non-farm jobs number was forecast to come in at up around 180,000. However, Wednesday’s higher-than-expected ADP jobs number has many thinking Friday’s employment report will also be a surprise to the upside.
Technically, December gold futures prices closed near the session high, scored a bullish “outside day” up on the daily bar chart and closed at a bullish monthly high close and a 10-month high close today. The gold bulls have the solid overall near-term technical advantage. Prices are in a steep seven-week-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,350.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,290.00.
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