GOLD BULLION held firm above $1200 per ounce in London lunchtime Wednesday, trading at the highs of last month despite a new two-year high in the US Dollar against the Euro.
The Dollar pushed the single currency near $1.23 – almost two cents down inside 48 hours – after a raft of weak PMI services sector data from the Eurozone.
As a whole, Germany's private-sector economy grew last month at the slowest pace in nearly 1.5 years, said the Markit consultancy.
US jobs growth last month was
below analyst forecasts in November, private payrolls service ADP said Wednesday, growing just 208,000 against the 221,000 consensus prediction.
"With the Dollar strengthening and the stock market remaining firm," says broker Marex Spectron's David Govett in London, "precious metals took a back seat [Tuesday]."
Looking ahead to Thursday's central-bank decisions in the UK and the Eurozone, followed by Friday's official US non-farm payroll stats, "I suspect, with the occasional silly move, [precious] will stay that way until the figures later this week," he says.
Priced in Euros, gold bullion touched a 6-week high at €979 per ounce. New all-time highs were meantime hit by
gold priced in Russian Rubles, with the currency reportedly
seeing active support from the central bank in Moscow despite crude oil rallying to reach $71 per barrel of Brent.
"[There's] near term congestion just below $1200" per ounce, says technical analysis from Canadian bank and London bullion market maker Scotia Moccatta.
"Momentum indicators are neutral, and we focus on downside risk levels at $1180 and $1175."
But for traders at Swiss finance and refining group MKS, Monday's huge rally from new 5-year lows "was a solid downside rejection for both gold and silver and will place the metals in good stead to consolidate above $1200-05 and $15.80-16.00."
Silver prices today tracked gold bullion, holding firm above $16.40 per ounce.
"Anyone still holding onto shorts [ie, bearish derivatives bets]," says MKS, "will have been rattled after [Monday's] moves and it may not take much to shake them out should we move higher."
Further ahead in 2015, says a new forecast from Germany's Commerzbank, "Gold is likely to find itself under pressure in the first half of the year as the interest-rate turnaround draws ever closer in the US.
"[But] growing volatility on the US equity markets in the wake of the Fed's interest rate hikes and stronger physical demand in Asia should give rise to recovering prices in the second six months."
