December gold futures have seen more volatility recently as the market continues to try and etch gains and find a reason to be bullish. Over the past week, we have seen $30-40 moves from the lows to highs and there seems to be a sentiment that with the stock market volatility, gold is becoming more of a safe haven than 3 months ago. With today’s recent blowout, non-farm payrolls number of 250,000 vs the estimate of 118,000, the gold market will continue to struggle with the generally positive and upbeat economic data that continues to come from the Fed. All signs still point toward a rate hike in December, and the U.S. dollar would be more attractive as an investment than gold as it yields higher returns than a non-interest-bearing asset such as gold. I believe that a big reason we are still sitting above the $1225 level is more technical than fundamental.
If you look at how gold has traded in recent months, once we traded above the 1220 level and broke to the upside on October 11th, this was a turning point to where now 1220 becomes support as that was congestion for months with failure to take out 1220. The next key level to watch before a strong buy could be warranted is a move above 1246. This is the October 26th high, and traders are sure to watch this level as something to buy if we are to see a close above that level.
Gold Dec ’18 Daily Chart