Gold & Silver News – 10th Nov 2014

Gold prices dropped to a four and a half year low this week, around the USD$1,130 mark, but almost entirely recovered the week’s losses on Friday after lower than expected US nonfarm jobs data, ending down 0.09% for the week.

Gold and silver prices snapshot:

Gold and Silver Bullion Weekly charts:

Source: NASDAQ

On Wednesday, Gold prices ended on a sharp drop slumping to a four and a half year low around USD$1,130. Thursday was mixed and didn’t see much change while the market anticipated Friday’s economic data reports. On Friday, the US Labor Department reported 214,000 new jobs in October, under the 230,000 jobs expected. Gold prices rallied from a combination of short covering, a weaker US dollar and military action in Ukraine, pushing gold above technical-chart resistance of USD$1,160.

December gold futures settled at USD$1,169.80 (AUD$1,354.91) per ounce on the New York Comex on Friday, almost recovering from the week’s losses and ending down just 0.09% for the week. December silver also rose, settling at USD$15.714 (AUD$18.20) an ounce, down 2.28% for the week.

Despite the end of week rise, Kitco News Gold survey participants remained bearish. 23 respondents had six seeing higher prices next week but 14 seeing lower prices, and three sideways or neutral prices.

Kevin Grady of Phoenix Futures said that Friday’s movement was merely a result of short covering, however Colin Cieszynski, senior market strategist at CMC Markets, saw a possible window for price rises saying: “with USD-related news slowing next week, I think it will correct, enabling gold to continue clawing back recent losses”.

Rob Haworth, senior investment strategist at US Bank Wealth Management, said “the dollar trend is still stronger, the US economic trend is positive, the Fed ended quantitative easing and may raise rates, and geopolitical risk is not a major factor going into the year end. We’re not looking for any support until gold gets under USD$1,100 (AUD$1,274.06)”.

In technical chart price terms for next week, Forbes reports a first resistance line at USD$1160.00 (AUD$1,343.56) and then at USD$1,170.00 (AUD$1,355.14). Meanwhile the first support was set at USD$1,137.00 (AUD$1,316.92) and then next at Friday’s low of USD$1,130.40 (AUD$1,309.27). For silver, first resistance was at USD$15.635 (AUD$18.11) and then at USD$16.00 (AUD$18.53), with support seen at the contract low of USD$15.12 (AUD$17.51) and then at USD$15.00 (AUD$17.37).

Data out of Europe and Asia will be the focus next week due to the light US economic calendar. Several European countries will release third-quarter GDP data while China will release industrial production growth, producer price index and export data.