Which US presidential candidate does gold prefer?
Gold loves chaos and should be hitting new highs, especially with inflation coming down and with it, two rate cuts likely before year’s end.
December Gold traded up to fresh seven month highs this morning at 1794.4 to begin the month and 4th quarter.
Early morning comments from Chicago Fed President Charles Evans suggested that monetary policy could remain very accommodative for longer than expected. This could be just one reason Gold surged higher after the comments.
News overnight on the global economy came in slightly better than expected but suggested that an economic turnaround was imminent for both Europe and China. China’s official PMI rose to 49.8 in September from 49.2 in August, but it was the seventh straight quarter of slower growth.
The euro zone PMI was revised higher to 46.1, from a 45.1 reading in August. Readings below 50 indicate contraction rather than expansion. In a speech in Indiana today, Fed Chairman Bernanke defended the Fed’s QE3 policies saying the action was necessary.
It is my belief that the support precious metals saw today was also possibly due to fund buying as it is the start of the quarter and month. Dips continue to be buying opportunities for investors as the trend in gold from the chart stems from the bottom left to the upper right.
Technical swing numbers for December Gold for this week come in as follows. Support is down at 1746.1, and with a close below 1718.4 the next level to the downside. Resistance is up first 1793.7, and with a close above 1813.6 the next level to the upside.
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Daily Swing #s GCZ2 (10/2)
Resistance#2 – 1809.8
Resistance#1 – 1796.5
Pivot – 1781.1
Support#1 – 1767.8
Support#2 – 1752.8
Sean Lusk
Gold & Precious Metals Analyst
Direct: 312-765-7213
