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The U.S. economy added 211,000 new jobs in November, giving the Federal Reserve confirmation that a December rate hike is in order. The unemployment rate remains at 5 percent.
February gold reached $1,070.70 overnight as the dollar weakened against the Euro. Because of the soft dollar, a short covering rally was in order, breaking gold out of its most recent trading range. The Euro is trading this morning above the 1.09 level, up from the 1.05 area earlier in the week.
The question remains, although it might not matter too much after today’s job number, what effect a rate hike will have on the gold market. The Wall Street traders I’ve polled still believe that remaining bearish is the right philosophy. In my opinion, the weakness in the dollar will cause a strong rally in gold, forcing them to rethink their positions.
A knee jerk reaction to the softer dollar and higher prices this morning, created some customers to sell product, some dealers have reported. For my friends who love charting the prices, next level of resistance is $1,079.80 and $1,087.90 in the February contract and back to the $1,050 area for support.
Silver, our shining star for 2015, continues to show that it’s hard to keep her below $14.00. Earlier in the week, we broke thru that magical number again and, with continued strong physical buying below that threshold, she just keeps bouncing back. Most dealers report silver coin sales still on top of the heap.
Platinum and Palladium as well as base metals all in the green colors this morning. It’s been quite a while since that’s been the case.
Oil prices fell below $40 per barrel this morning as OPEC members seem not to be upfront and honest on daily oil production. Even with the talk of output reductions, OPEC is unlikely to leave this meeting with any agreement on production cuts.
Author Name: Walter Pehowich
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