Gold Scores Fractional Gains Amid Falling Stock Prices

December 6, 2018 - 5:00pm

 by Gary Wagner

U.S. equities once again traded under tremendous pressure, down almost 800 points at the intraday low today. The Dow Jones Industrial Average has traded to a low which amounted to a 1,500 point drop this week before recovering in the afternoon session. With 45 minutes remaining in trading, as of 4:15 PM Eastern Standard Time, the Dow was trading off by 344 points at 24,681, and by the close was only down 76 points.

The precious metals complex, with the exception of gold, is trading lower on the day. Palladium, which has been running to all-time new record high prices, is down over 3% today with palladium futures currently fixed at $1,147 for a net decline of $37.40. Platinum actually broke below $800 as it sold off today, resulting in losses of 1.67%. Platinum futures are currently fixed at $788.60.

The only precious metal to gain value in trading today was gold. Currently, gold futures basis the most active February contract is trading up $0.40 at $1,243 per ounce. All of the precious metals were supported by a weaker U.S. dollar which is down 25 points and currently fixed at 96.755.

Although traders have not witnessed gold prices selling off, as often is the case when we have a significant downturn in U.S. equities, safe haven buying has been limited, to say the least.

In an interview with MarketWatch, Mark O’Byrne, research director at GoldCore said, “As is frequently the case, gold can suffer in the initial market sell-off and be correlated with risk assets. However, it tends to bottom quicker and bounce and display an inverse correlation to risk assets. This is especially the case over the long term—meaning a quarterly or annual basis.”

Traders and market participants are intensely focused on tomorrow’s Labor Department’s non-farm payroll jobs report. The economic forecast for tomorrow’s reports is that there were 198,000 jobs added last month. Today ADP reported that 179,000 jobs were added by private employers in November, very close to the expected forecast by economists of 190,000 new jobs.

Jerome Powell Chairman of the Federal Reserve will be speaking today, and market participants will listen carefully for any insight as to whether or not the Fed is on track to raise rates one more time at the FOMC meeting this month.

Wishing as always, good trading,

Gary S. Wagner - Executive Producer

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Gold Forecast: Proper Action
Maintain long February gold @ 1231 Maintain stop @ $1235.13
 
Yesterday we sent out a Trade Alert: Trade Alert: Time to take profits and raise stop
 
We bought gold @ $ 1228.30 on Wednesday November 28. We Rolled over the December gold on December 2 to Feb gold @ $ 1231
 
Move your stop on the other gold position to $1235.13
 
In @ $1228.30 out @ $1243.90 for a profit of $1460 per contract.
Gold Market Forecast

With gold trading right at its current resistance area of $1246 per ounce, it will be the fundamental events which move pricing above resistance. All eyes will be fixed upon tomorrow’s jobs report by the Labor Department.

Of course, the main event this month will be the final FOMC meeting of the year, and the question remains as to whether or not the Federal Reserve will raise interest rates yet one more time this year. The probability of a rate hike has been diminishing but is still high as the Fed has changed their tone to a much more dovish demeanor recently.

Sentiment Indicator:
Gold -> Bullish
Silver -> Neutral
S&P 500 -> Bearish
Bitcoin -> Neutral