Gold price recovery interrupted by US economic data

According to Kitco - the world gold recovery was interrupted after the latest US economic data showed improved consumer optimism.

The University of Michigan said Friday that its preliminary survey of consumer sentiment rose to 73 in November. That was a seven-month high and up from October's final reading of 70.5. The data was better than expected, as economists had predicted a smaller increase of just 71.

Gold is under some selling pressure after economic data was released.

The index's components improved significantly: "Personal financial expectations rose 6%, partly due to improved income prospects, and short-term business conditions jumped 9% in November. Long-term business conditions rose to their most favorable level in nearly four years," said Joanne Hsu, director of consumer surveys.

“The forecast for inflation next year has eased slightly from 2.7 percent last month to 2.6 percent this month,” she added.

Kitco senior analyst Jim Wyckoff said gold prices were weaker but buyers have stabilized the market after a sharp decline in mid-week.

He said the gold market had little reaction to the Federal Open Market Committee (FOMC) of the US Federal Reserve (FED) cutting its key interest rate by 0.25% on Thursday afternoon. The Fed Chairman did not make any statement that affected the market.

The key outside markets saw the USD index near steady today. Nymex crude oil futures were lower, trading around $71.50 a barrel. The benchmark 10-year US Treasury yield is currently at 4.308%.

Asian and European stock indexes were mixed overnight. US stocks are expected to open slightly lower when the New York session begins. US stocks are taking a breather on Friday after surging following Donald Trump’s decisive victory in the US presidential race.

Technically, December gold futures bulls have the overall near-term technical advantage but it has weakened. The bulls’ next upside price objective is to produce a close above $2,801.80 an ounce.

The next near-term downside price objective for the bears is to push futures prices below $2,618.80/ounce.