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James Hyerczyk
Comex Gold
Comex Gold

Gold is trading lower shortly before the regular session opening. Earlier in the session, the market rallied on safe-haven buying related to a plunge in U.S. stock indexes and another steep drop in U.S. Treasury yields. A weaker dollar also helped make gold a more desirable asset. However, this move ended, falling short of this week’s high at $1247.50 after the dollar recovered.

At 1125 GMT, February Comex gold is trading $1241.10, down $1.50 or +0.12%.

The choppy, two-sided trade is likely to continue as long as the U.S. Dollar keeps posting similar moves. Gold will not be able to sustain a rally until the dollar starts to trend decisively lower. Furthermore, the dollar doesn’t seem able to mount a sizable break due to safe-haven buying.

Since November 28, the dollar has been under pressure because of dovish comments from Fed Chair Jerome Powell, but the selling hasn’t been able to amount to much because the steep break in the stock market continues to drive investors back into the dollar.

In the U.S., traders will also get the opportunity early Thursday to react to reports including Challenger Job Cuts, ADP Non-Farm Employment Change, Revised Nonfarm Productivity, Revised Unit Labor Costs, Trade Balance and Weekly Unemployment Claims.

At 1445 GMT, traders will get the opportunity to react to Final Services PMI. At 1500, the major report will be released. ISM Non-Manufacturing PMI is expected to come in at 59.1, down slightly from 60.3. Factor Order are also due to be released to this time.

Also on tap are speeches by FOMC Members Bostic and Williams. The day ends with a speech by Fed Chair Jerome Powell at 2345 GMT.


Just a short while ago, crude oil plunged, taking the stock market with it. This also drove the dollar higher and gold lower. This confirms our assessment that gold is once again getting its direction from the U.S. Dollar. And safe-haven buyers of the dollar are getting their cues from the stock market.

If stocks continue to sell-off then don’t look for gold to rally because of safe-haven buying. Look for it to break if investors seek shelter in the dollar.

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