Waiting For Labor

In spite of an assist from a strong euro/weaker dollar, which would push gold prices higher, the yellow precious metal Is down today in regular trading.

It’s not much of a drop, but it is a sign of further uncertainty in gold, as it seeks true direction.

The euro was stronger because the European Central Bank decided to leave interest rates alone, whereas for a few weeks analysts had been expecting a lowering of the basic rate. The ECB, though, is still pondering how and when to buy back toxic or weak paper the way the U.S. Federal Reserve did during its QE3 program.

Again, gold moved in tandem with U.S. equities, a strange coincidence, although the stock markets in New York are only down marginally. Asia was the equities winner today.

We await the employment report Friday for the November jobs picture. The U.S. Labor department will issue the numbers, which seem to be shaping up as “maintaining to positive.” This will help market participants gauge where they believe interest rates from the Fed are headed.

We expect the report to throw some credence into the mix that leans toward the prediction of an uptick in the interest rate.

CNBC put it this way: “A rise in U.S. interest rates would lift the opportunity cost of holding non-yielding gold and further boost the dollar.”

The dollar’s potential rise on the news would, in and of itself, signal lower prices for precious metals since they are dollar-denominated.

Finally, another “outside market” was at work on gold today. Energy commodities prices were down. WTI crude was down almost 1%, Brent down not quite half a point, and natural gas was down a whopping 4+%.

We’re walking on eggshells trying to figure out when volatility in the fundamentals will ease. Until them, we bide our time and look to technical analysis.