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Gold Moves Lower on Technical Selling

Release Date: 
Tuesday, December 4, 2012

The gold prices fell after the metal crossed key technical levels at $1,710 and $1,705 per ounce, but several analysts anticipate a move higher. Gold was $24.00 lower at 7:09 a.m. Pacific Time on the New York Spot Market, trading at $1,693.00 per ounce. Spot silver was $0.76 lower at $33.00 per ounce. (Click here for the most current spot prices.)

Phil Streible, senior commodities broker at RJO Futures, said gold prices will rally into the end and through the first two weeks of January after last week's tax selling. Noting gold’s current attractive price level, he said he expected the metal to rise back to $1737 per ounce this week.

He noted resistance near $1,750 to 1,755 per ounce, but said, “if we can break though there, I think in the first week of January we can be north of $1,800.”

ANZ bank also noted that a shift to the upside in gold could test $1,800 per ounce.

In the latest monetary easing by central banks, Australia's central bank cut interest rates a quarter point to match a record low on Tuesday, stepping up efforts to guard against recession.

Markets will focus on the outlook for U.S. non-farm payrolls data on Friday. "There will probably be less job creation in areas hit by Hurricane Sandy, and that could have a significant impact on gold," said Peter Fertig, consultant with Quantitative Commodity Research.

(Sources: “PRECIOUS-Gold dips 1 pct on stop-loss sales; may flush out buying,” Reuters, December 4, 2012;; “PRECIOUS-Gold drops to one-month low below $1,700/oz,” Reuters, December 4, 2012; “PRECIOUS METALS: Gold Slips in Asia; Near-Term Outlook Unclear,” Wall Street Journal, December 3, 2012; “Tax Selling Done, Gold Set for S tretch Run,” The Street, December 3, 2012)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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