This was coupled with a very positive 3.5% unemployment rate, vs expectations of 3.6%. Despite the recent stock market jolt the economy of the U.S. is still quite healthy, and the data supports this. Gold is down over $16 this morning coming back toward its recent lows in November of $1460. I would not be a buyer of gold in any way at least in the short-term.
Technically, gold is still stair stepping its way down and following a very gradual downtrend it’s been in since highs posted back in early September. The way Feb gold is trading right now, it wants to settle back in the low to mid 1400’s and what I think is going to be a trade down to $1450. There are plenty of reasons to be bearish with all of the positive economic data, and technicals to support. There are only a few reasons to be bullish.
The most obvious is a trade war escalation on December 15th, with tariffs increasing on an additional $156B in Chinese goods. This could absolutely trigger a stock market selloff similar to what we had in December of last year. If this is the case, look for gold to bounce back toward $1500, but beware this level as follow through is needed above $1500 to warrant a long position in gold.
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This article was originally posted on FX Empire
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