Gold Prices at 4-Month Low

October 6, 2016 9:10AM CDT

Gold futures fell to a new four-month low today, as stronger U.S. economic data helped the case for the Federal Reserve to raise interest rates when they next meet in early November.

December gold was down 1% at 1251.6 a troy ounce in the New York Comex contract, its lowest level since early June.

Tomorrow’s job’s report could show positive growth in which the Federal Reserve is looking for in order to raise the rates.  First-time unemployment benefits fell back toward a four-decade low last week, a sign of economic strength ahead of Friday’s report.  Depending how you look at the number, it could be a good or bad sign for the overall economy.  Strong employment numbers for September would help support the argument for a rate increase when the Federal Reserve meets next.  Lower gold prices, which struggles to compete against yield-bearing investments when borrowing costs rise.

Signs of a better economy and hawkish comments for Federal Reserve officials have had a negative effect on precious metals, bringing the price down nearly 5% since last Friday. I think the recent route in gold futures will stimulate physical buying demand. Watching the delivery numbers should be a good indicator to see how much physical is bought by investors.

There’s a few key price points you should be watching over the next 24 hours in December gold.  I think 1248.00 and 1235.00 are pivotal price points that will give us insight into next week’s trade setups.

Gold Daily

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.