The yellow metal dropped ahead of US employment data, which is expected to show employers created more jobs last month, reinforcing the view the Fed may soon start raising borrowing costs, while the US Dollar was poised for a seventh weekly gain. Strengthening of the US economy is spurring speculation that the US central bank will begin hiking interest rates next year, boosting the Greenback and cutting demand for the precious metal, a non-interest-bearing asset. Meanwhile, holdings in the SPDR Gold Trust, the world's biggest gold-backed exchange-traded fund, remained unchanged yesterday for a second day at 720.02 tons on Thursday. Gold was heading for 3% gain for the week on Friday, its biggest weekly advance in nine months.
Among other important news, the number of people seeking unemployment benefits in the US fell last week, reinforcing the view the labour market continued to improve. Initial claims for jobless benefits slid 17,000 to a seasonally adjusted 297,000 in the week ended November 29, according to the Labour Department, after claims rose above the 300,000 level in the preceding week for the first time since September. The four-week moving average, a less volatile measure, increased 4,750 to 299,000, albeit remaining below 300,000 for 12 consecutive weeks.
Statistics from Asia to drive markets next Monday
As usually, the next Monday will not be rich in terms of fundamental data; however, there are several indicators, which are likely to have impact on the price of Gold. Japanese statistical authorities will release the final data on gross domestic product's performance in the third quarter. Any negative change will have a bullish impact on the yellow metal. Besides that, China's statistical office will publish data on trade balance in November.XAU/USD to decrease trading range by the end of 2014
The long-term outlook for the XAU/USD cross remains bearish, taking into account the recent US dollar's bullish tendency across the market. The Gold entered a descending triangle pattern against the Buck, meaning that trading range o the pair will decrease soon. From above the long-term downtrend line is located around $1,220, while a support in face of 2014 low is placed at $1,131. By the end of the year we would suggest the Gold to hover around $1,150 per ounce, while in January it is likely to depreciate slightly to trade at 2014 low.Daily chart
Taking into account the short-term time-frame of the metal's development, the Gold experienced almost no changes during Thursday, as it continued to hover above the important $1,200 mark in course of the day, around 55-day SMA and monthly R1. From above it is limited by long-term downtrend line, while the support at $1,192 is represented by weekly R1 and 20-day SMA. However, we consider that the movement to the south is more likely at the moment.
Hourly chart