Capitulation It’s the word of the day as investors look to the USD instead of gold or the forex majors. With only a few hours before the closing bell, the DJIA DOW (+190), S&P 500 SPX (+45) and NASDAQ (+197) are trying to cut yesterday’s massive losses.
December gold futures are down on the day, losing more than $ 11.00 an ounce (-60%). Strong GDP figures aside, improving weekly jobless claims is boosting sentiment. Here are the highlights:
Previous projected actual event
Continuous job applications (October 16) 7.756 M 7.700 M 8.465 M
Initial jobless claims (October 23) 751K 775K 791K
Overall, it looks like the US job market is heading in the right direction. Ongoing and initial jobless claims continue to decline, suggesting that employment is on the mend. As the fourth quarter approaches, the Fed’s projection of 7.0% unemployment by the end of the year certainly seems achievable.
Let’s take a look at the technical outlook for December gold futures and see where this market might head.
Double Bottom In Play for December Gold Futures
Right now, gold is in a bearish position on the daily period. The key Double-Bottom support level of 1851.00-1851.1 can kick in very quickly.
Overview: Everyone’s guessing where commodities and stocks will close before the weekend. However, given this uncertainty, it will be surprising to see the December gold trade flat before Friday’s closing bell. If we see price action knocking out the daily Double-Bottom, be prepared for a quick jump to the 1825.0 and 1800.0 levels.