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    JM Bullion Weekly Market Preview (12/8/14)

    Gold prices are trading slightly higher this morning to begin the new trading week. As of this post, gold is moving higher by over $4.00 per ounce and is hovering just below the $1200 level.

    This week is lighter on economic data than last week. Investors will get the latest readings on wholesale trade, retail sales, consumer sentiment, weekly jobless claims, PPI and more. Retail sales may be of particular interest to investors as we get into the thick of the holiday shopping season. In addition, weekly jobless claims may attract some additional attention following Friday’s stronger than expected non-farm payrolls report.

    Friday’s non-farm payrolls data may be cause for some to rethink their position on rates. This report showed underlying strength in the labor market which has been an area that the Fed has seemed frustrated with at times. It appears that companies are getting more and more comfortable adding jobs and positions and putting more capital to work. While there is clearly still much room for improvement, the jobs data points to continuing healing in the labor market. This could potentially encourage the Fed to raise rates a bit sooner rather than later.

    The U.S. dollar index appears poised for further upside. The greenback gained additional strength following the jobs report, and opened the trading week higher. The index remains at multi-year highs and further gains may be in store. The Euro and the Yen continue to struggle as deflationary pressures remain in play. The dollar has hit a seven year high against the Japanese currency.

    Oil prices are continuing their losing ways and have moved below the $64 per barrel mark. It appears that new, fresh lows are in store for crude oil prices. Should oil continue to slump, energy shares may be dragged down and the stock market may begin to rethink the current rally. While lower oil is a bearish outside factor for gold, should stocks begin to move lower as well it could work in gold’s favor. Many analysts believe that oil is likely near a bottom at current levels, and that the market will begin to stabilize. A break below the $60 per barrel mark could potentially trigger more of a panic and cause selling in equities and risk assets.

    The technical picture in gold continues to improve. The market has been trending higher since the November lows and dips are being bought. The market has, however, struggled to put together a strong rally and $1200 remains slippery. Next upside resistance may be seen in the $1220 area. It is possible that gold may be in a holding pattern at this point until the first of the year and that any directional moves may be somewhat limited.

    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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