Gold for February delivery bounced off session lows but still shed $2 to $1,371.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,380 and as low as $1,364.30 during Thursday's session. Despite the price drama, gold was able to hold to its $1,370 support area.
The U.S. dollar index was adding 0.63% to $80.79 while the euro was losing 0.96% to $1.30 vs. the dollar. The spot gold price was down $7.30, according to Kitco's gold index.
Three times gold prices have tried to break to and sustain new highs but to no avail, with 2011's 3.4% correction continuing."The high volume distribution and failed breakouts into new highs is indicating institutional selling," says Jeb Handwerger, editor of GoldStockTrades.com. Handwerger says a break below the 50-day moving average could trigger more sell orders, where traders are forced to sell to lock in profits, and prices could trend down to $1,275-$1,250. Like other traders, Handwerger is holding long-term positions but selling the rest and will only buy gold again once the correction shakes out. Without this new money in the market, gold prices will have a tough time stabilizing. Gold's downward trend started as profit-taking turned into technical selling and has now morphed into a return to risk appetite as better than expected data leaves safe have metals on the sidelines. November manufacturing orders in Germany climbed 5.2% vs. a prior 1.9%. The jump blew past expectations. The news trumped weak retail sales in the eurozone for the same month as well as the U.K.'s weaker purchasing managers index for December, which slipped below the growth level of 50. An improving jobs picture in the U.S. has also not helped gold. Initial jobless claims for the week ending Jan. 1 rose slightly to 409,000, but expectations are still high headed into Friday's jobs number. The unemployment rate is expected to slip slightly to 9.7% and where the private sector is expected to add anywhere from 225,000 to 162,000 jobs, according to Briefing.com.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV