Gold News

Gold whipped as traders eye data

Gold has whipped in a $5 range since New York opened for business. Both the Dollar and Sterling have also made violent moves.

"We're very data-dependent," as one Chicago gold dealer noted to Bloomberg earlier.

UK investors today got news that house-price inflation has soared yet again. But it couldn't help Sterling recover the 3 cents it's lost vs. the Dollar since in the last two days, not with another report showing that consumer confidence has slipped again.

US investors meantime learnt that US factories grew their order books by 0.9% in November after a decline of 4.5% in October. But another report showed fewer sales of existing US homes the same month.

So which direction will US interest rates and the Dollar take when the Fed meets at the end of this month?

"Rate cuts could weaken the Dollar and support gold," the Chicago gold dealer noted. Tomorrow's key payroll data from Washington could signal a big move in gold if traders use it to second-guess Fed policy.

"I'm not looking for this market to roll over," says Stephen Platt, a commodity analyst at Archer Financial Services in New York. "I'm still looking for weakness in the Dollar. On the breaks, you're going to see the support come back in. Gold can find buyers at this point."

Copper continued to drop hard today, and crude oil prices also fell further on warmer weather in the north-eastern United States. WTI Nymex hit $57.32 per barrel earlier today in New York.

"Falls in energy prices and other commodities, such as copper and other base metals, are worrying," according to one market analyst, "but gold will continue to draw a lot of safe-haven demand with the situation in Iran unresolved and continuing tension in the Middle East."

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Adrian Ash

Adrian Ash, BullionVault Gold News

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

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