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Gold Market Update: October 23, 2013

ByGoldTradingExperts.com
Published 10/23/2013, 07:26 AM
Updated 07/09/2023, 06:31 AM
GC
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We noted yesterday that the lack of follow through buying after gold broke out of the down trend channel was a concern for the bulls, however we saw a further surge higher following a weak September Non Farms Payroll (NFP) number yesterday afternoon.

The NFP came in at $148,000 vs expectations of $180,000 new jobs, with the unemployment rate continuing to fall rapidly to 7.2%. However, it appears this fall is more to do with fewer people actively seking work than a stronger economy creating new high quality full time jobs.

Gold found resistance at the 50 DMA around $1345 and this morning has fallen back to currently trade at $1332. It would take a break of major resistance at $1353 for us to begin to consider the merits of the bull case, for now we still consider the down side to be the more likely path for gold.

The dollar collapsed yesterday on the back of the NFP release as the prospect of tapering fades away, with many commentators now expecting tapering to begin not in December this year but March 2014 at the earliest.

The flow of information from the US is slowly getting back to normal, though we have lost a lot of the data that provides a picture of the US economy due to the government shutdown this month.

Oil continues to plummet lower, suggesting slower economic activity, lower inflation or both. Gold has not responded to the falling oil price as we would expect, though the usual gold:oil correlation has not been evident in recent months - oil has been moving in tandem with stocks and inversely to gold.

Equities remain bouyant and are still the "flavour of the month" - until this changes, gold will struggle to perform as we have stated many times.

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