ADP and the Gold price

Wall Street saw losses yet again last night as the S&P posted its third consecutive down day as markets continued to try and decipher the goings on in the senate around the Tax and travel ban. Today’s session is set to be the real start to the week as the calendar gets particularly busy with the real headline acts of the week, including the ADP payrolls.

For today’ there is also the worry at the fallout of Donald Trump recognising Jerusalem as the Israeli capital, which he will do in a speech today. There have already been call of concern from Saudi Arabia and the UK’s Boris Johnson, with the former warning of consequences of such a move. So again the White House and the President could well give us some market moving comments later this afternoon.

With so much Brexit chat over the last couple of weeks we must keep an eye on headlines from the DUP and UK government as those talks are clearly still ongoing despite the fact that both parties keep saying how aligned they are. Any sort of Brexit headline is likely to get Sterling moving as it has been all week, and continues to be this morning. This morning however there does tend to be US dollar bull focus as the greenback is pretty strong against most of its counter parts, and with the ADP payrolls beginning the lead up the Jobs report on Friday there could of course be more US dollar moves. With next weeks Fed rate decision there is always an added edge to the jobs report despite the fact that a weaker number would not deter the Fed from raising on Dec 13.

Yesterday’s moves in the Gold price saw some key levels broken on the downside as the 12 month trendline and 200 day SMA both fell, however a late rally meant that the daily candle closed back above the 1265 level. This morning’s moves have also seen an expected recovery, again back above the 200 daily SMA.

Gold continues to hold up at the key downside trendline level that has been dominating the precious metal for a number of weeks, and has in fact been in place for the last 12 months. Today we have seen a break below this key level after an session of heavy selling prompted by US dollar strength as President Trumps finds some success with his travel plan and tax reform bills.

With Gold initially breaking its formation on the hourly chart yesterday it set us up for a view at the daily trendline, now this has broken we are now targeting the lower level at 1260 which are the lows from the start of October and after the initial break yesterday this is now the key downside level after ticking the level and rebounding. Below there we look to both 1251 and 1243 as the longer term stop gaps if the price keeps moving lower. What is more likely however is a rebound to retest the trendline on the daily, and it was of course pivotal whether the daily candle closed below the trendline and the 200 day standard moving average, which it didn’t.