Bullion on Bullion
Gold settled slightly lower Thursday reversing the positive return from yesterday with the February contracts closing at 1269.2. Demonstrating further economic growth, the November Leading Economic Indicators came out this morning matching expectations after beating expectations in October. High consumer sentiment and manufacturing new orders were both sighted as main contributors by The Conference Board, the publisher of the index. The Philly Fed’s Manufacturing Business Outlook Survey was released this morning as well and showed a major jump from 22.7 to 26.2, the goal of many a marathon runner, showing strong manufacturing growth. Both of these indicators being positive normally puts downward pressure on gold prices however these appear to be largely priced into the market. Globally we saw the Catalonia election today, while exit polls suggest a pro independence stance, these types of polls are typically not very accurate. While this could have short term impacts in the equity markets, it is not likely to have a large effect on the metals market.
Tomorrow we will see the release of November durable goods orders and October personal income and consumption. While a deviation from expectations could result in near term volatility, consensus is that these will both be positive and we believe is unlikely to be far from projections and so should not have much impact on the gold market either.
For February gold, an open tomorrow above the pivot of 1269.2 would show near term resistance at 1272.5 while a breakout above this level would see longer term resistance at 1275.7. An open below the pivot would have near term support down at 1266.0, and a sell off below this would show longer term support at 1262.7.
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Michael Bullion, CAIA
Senior Technical Analyst
Walsh Trading, Inc.
Direct: 312.985.0156
888.391.7894
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www.walshtrading.com
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.