With short-term interest rates overnight plunging in China and hope for yet another stimulus action from the Chinese government, the gold market firmed and forged the highest price since November 7th. It is also likely that the gold and silver markets drafted indirect lift from renewed fear of a no-deal UK exit from the EU.
However, gold and silver regained and took out key technical points on the charts in the form of long-held consolidation resistance and given thin trading conditions that could result in some noted upside follow-through.
In looking back one should note that gold began to firm late last week following United Nations/US suggestions that the attack on Saudi Arabian oil facilities was likely carried out from the "North" which in turn implicates Iran. Obviously clear proof of Iranian involvement in the attacks would be a flashpoint for Middle East relations with retaliation likely, instability and flight to quality interest stirred globally.
In looking forward the US trading session will bring 3rd tier economic manufacturing report which is expected to be slightly better than a negative reading seen in the prior month.
Low volume, thin, pre-holiday trade leaves the market vulnerable to sudden moves that might not hold.
Silver appears to be leading gold, as it was first broke out of its recent consolidation on Friday and gold waited until Sunday night. Therefore gold and silver might draft a small amount of lift in the event of soft US data with near term upside targeting in February gold seen at $1500 and at an early November consolidation zone of $17.79 silver.
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