Gold remains defensive within the recent range, weighed by last week's U.S. nonfarm payrolls beat, which stoked risk appetite. The yellow metal is little changed so far today with the recent range lows at 1450.05/1445.62 protected.

As I noted in Friday's post, gold is actually displaying some resiliency in the face of a pretty strong jobs number. Persistent trade uncertainty may be providing some support, or the market may just be waiting for the Fed's take on that NFP print.

The Fed's 2-day FOMC meeting begins tomorrow and policy will be announced on Wednesday, along with the central bank's economic projections. While the Fed was not expected to move on rates this month, it seems the jobs data may warrant at least a tweak to guidance.

While the dollar popped on Friday as hopes for further Fed rate cuts in 2020 dimmed, it has been unable to sustain those gains thus far. Continued softness in the greenback within the range, provides some underpinning for gold.

The ECB will also announce policy this week. While they are likely to hold steady on rates, look for Lagarde to reaffirm the easing bias evident since the restart of asset purchases in November.

There's also a lot of focus in the market on a December 15 deadline, when President Trump may institute additional tariffs on $156 bln in Chinese exports. There is some sense that last week's jobs data gives Mr. Trump some additional leverage, given that the positive U.S. economic news preceded today's report that Chinese exports declined for a fourth consecutive month in November.

Palladium extended to the upside today to satisfy our long-standing measuring objective at 1895.15, notching a record high just shy of 1900.00. While the market is overbought, the fundamentals remain broadly supportive with the psychologically important $2000 level looking increasingly attractive.


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