NEW YORK (Kitco News) — The marketplace was still buzzing about last Friday’s surprisingly strong U.S. employment report from the Labor Department, which showed non-farm payrolls rose by 271,000 in October. Gold was no exception and was trying to recover after hitting a 3-month low on Friday.
The metal ended the U.S. day session near steady in the cash market and slightly up in the futures market Monday. December Comex gold was last up $1.30 at $1,089.00 an ounce.
‘The surprising strong number generated heavy selling in the metals complex taking $25 off the value of gold within minutes. Gold finally found buying interest at the $1,087 support band and on [Monday] is seeing some bargain hunting buying,’ says Peter Hug, the global trading director for Kitco Metals in an interview on Monday.
‘The employment number was seen as a guarantee that the Fed would move in December, but we remain outside of that camp,’ he stressed.
Hug said the primary issue remains deflation and until growth prospects begin to improve in Europe and the Far East, he suspects the U.S. Federal Reserve will remain on hold.
‘Gold will need to hold the $1,087 level and consolidate in the near term. The technical damage is severe and a break above the $1,105 level is required to re-establish an upward bias,’ he said.
Technically, December gold futures prices closed nearer the session low today after hitting a three-month low and closing at a bearish weekly low close last Friday.
The gold bears have the solid overall near-term technical advantage. Prices are in a four-week-old downtrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,120.00.
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