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    JM Bullion Weekly Market Preview (10/21/13)

    Gold prices are holding last week’s gains as of this post. Gold is currently trading up a  dollar and change as of this post as gold investors and global markets await the beginning of late data releases now that the U.S. Government partial shutdown is over ( At least for now anyway.)

    Gold investors and global markets will be paying very close attention to the data being released as the case for tapering has been damaged a bit in recent weeks. The biggest economic report for the week will be released tomorrow morning when the U.S. Department of Labor releases its September non-farm payrolls report. Consensus estimates for the report are for 185,000 jobs created and an unemployment rate of 7.3%.

    Due to the magnitude of this report, any disappointment in the data or prior revisions could not only cause an increase in market volatility but could also have an effect on the Fed;’s decision making process with regards to tapering. The issue of tapering has once again become the talk of the town as a new Fed Chief will be stepping in.

    In addition to this, it will likely be a lot more difficult for the Fed to gauge economic activity given the shutdown. Many now feel that markets will not see tapering until sometime in the first quarter of 2014. Should markets get additional clues that this may prove to be the case, it could drive risk assets higher and could also benefit precious metals.

    The dollar could be a key driver for gold here in the near future and should be monitored. Although U.S.  lawmakers have reopened the government, there are still numerous obstacles that must be overcome in order to come up with a viable long-term solution to the budget crises.

    Although markets have somewhat quickly swept the debt issue under the rug for now, it is an issue that  will back in the headlines before long. This could keep the dollar index under pressure for the foreseeable future. A weaker dollar could benefit gold prices and perhaps be the catalyst for a sustainable rally.

    From a technical perspective, the gold bulls are in near term control. Gold prices are trading currently above their 9 and 20 day EMA’s and are consolidating just below the key 50 day EMA at the $1325 area.

    Today’s price action has the look of a market taking a breather before another push to the upside. The 9 and 20 day EMA’s along with the $1300 level are near term support. A break below these levels sets the stage for a possible re-test of $1250 while an upside breakout above the 50 day EMA sets the stage for a run to the $1354 area.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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