Gold continues to dance around the 100-day moving average unable to commit fully to a charge higher, while equity traders continue to worry over market uncertainties. On a number of occasions gold has given the impression that it is ready to finally throw off the shackles of pessimism and head higher. Only yesterday, David Madden hypothesised that the $1262 level the precious metal was trading at confirmed that the ‘flight to quality’ was once more the driving force.
We have seen a couple of weeks’ worth of sideways momentum and the comments I made almost two weeks ago still stand. Now that we have seen a close above $1268 the bias is to the upside, but I would want to see the price rise above last week’s highs to increase the chances of testing the $1300 levels. Friday’s non-farm payroll figures would be the obvious short-term risk, as a particularly good figure could be the catalyst equity markets are in need of.